California’s Energy Transition from Oil State to Fossil Free: Introduction, Part One

The introductory article in an ongoing series on the history and politics of California energy and climate policy.

California’s attempt to transition from a state dependent on oil to one that is “fossil free” requires a revolution in energy policy. This revolution is underway, and how it proceeds will matter not only to California but to the future of U.S. and global energy and climate policy. To understand the challenge of this transition requires an understanding of the impact of oil on California’s history. This five-part series introduces The California Energy Transition with an overview of the key issues in the history and politics of California energy and climate policy.

Not many people think of California as an oil state. Oil, nonetheless, has been a central factor in the state’s political history and economic development. The state has not only been a leading oil producer since the 19th century, but it has also contributed to the growth of oil consumption, most famously in the growing demand for gasoline with the development of U.S. “car culture.” The state has also been a leader in environmental issues, particularly around oil. It is where efforts to reduce air pollution from auto emissions began in the 1960s in response to Los Angeles smog and where the opposition to offshore oil drilling gained support after the 1969 Santa Barbara oil spill. More recently, California has led the efforts for more than a decade to restrict hydraulic fracturing, known as “fracking,” a controversial extraction method that increased U.S. oil and gas production and made it the world’s top oil producer.

The state’s opposition to oil production and its efforts to reduce auto emissions grew out of concerns about the local environment and have since widened into the state becoming a “global leader in combating the climate crisis.”  As part of this increasing policy ambition, California’s long-term efforts to ban offshore drilling, mitigate the impact of oil production, and regulate auto emissions have evolved into a policy to reduce and ultimately eliminate the use of oil altogether. The question remains, however, if it is possible, or even desirable, to phase out an industry that has been integral to California’s growth as a state and a resource that has more than any other—even gold—shaped its history.

Oil and Climate Change

Increasing concerns over global climate change in recent years have accelerated California’s efforts to reduce and ultimately eliminate the use of fossil fuels. Notably, California has initiated a climate change strategy that involves not only the phase-out of oil, but also includes spending billions of dollars on zero-emissions vehicles (ZEVs), climate resilience, carbon sequestration, and land conservation.  As part of these accelerating efforts, in May 2022, the California Air Resources Board (CARB) released its most “comprehensive, far reaching, and transformative” plan to fight climate change. Its draft 2022 Climate Change Scoping Plan, the third update to the initial 2008 Scoping Plan, outlines different scenarios to achieve “carbon neutrality” by 2045 or earlier with a proposed scenario that would reduce oil use by 91% from 2022 levels by 2045.  The plan envisions achieving this by “rapidly moving to zero-emission transportation,” phasing out the use of natural gas for heating, accelerating the move toward renewable energy for electricity generation, and increasing the use of hydrogen and renewable gas. 

A Renewed Urgency

California’s climate change policies gained new urgency in response to President Donald Trump’s decision to withdrawal the United States from the Paris Climate Accord, an international agreement to reduce carbon emissions.  With Trump pulling the United States back from its climate commitments, California became the nation’s climate policy leader.  Governor Jerry Brown represented the opposition to the Trump administration’s direction on climate change by helping to lead state-level and international efforts to uphold the Paris Accord commitments.  He also signed into law SB 100, which set a goal for the state to reach 100% clean electricity by 2045, and issued Executive Order B-55-18, which set a new target for the state to achieve carbon neutrality by 2045.

In addition to the reversal in U.S. climate change policy, the Trump administration also pursued an energy policy that aimed to increase both conventional drilling and fracking on federal lands, including on more than a million acres of California land and in the waters off the California coast.  The plan threatened the decades-long efforts to restrict oil production in California and to ban offshore drilling.  Additionally, Trump’s revocation of California’s waiver from the Clean Air Act in 2019 directly opposed the state’s climate goals.  The waiver allowed the state to set its own, stricter auto emissions standards.

California elected officials, meanwhile, pursued policies to accelerate the state’s transition to ZEVs, ban fracking, oppose oil drilling, and regulate auto emissions. The most direct of these actions came in September 2020, when, as the state was battling historical wildfires, Governor Gavin Newsom exclaimed that the state was experiencing “a climate damn emergency” that required accelerated efforts on climate change.  He then issued Executive Order N 79-20, which called for dramatic actions to respond to climate change and outlined the state’s goals to achieve a carbon-neutral economy.

Executive Order N 79-20 outlined a policy that aimed at shutting down the oil industry. For transportation, it ordered a full transition of passenger cars and trucks to ZEVs, including deployment of ZEV infrastructure, and ordered CARB to develop strategies for the continuation of the state’s plan to reduce the carbon intensity of fuels. For oil production, the executive order required CARB to expedite regulation “to repurpose and transition upstream and downstream oil production facilities.” It also required state agencies to develop strategies, recommendations, and actions to manage and expedite the closure and remediation of former oil extraction sites, and it required strict enforcement of bonding requirements and other regulations to hold oil producers responsible for site closures and remediation.  In a separate statement, Newsom asked the legislature to end the issuance of new hydraulic fracturing permits by 2024.

The recent history of California’s ongoing energy transition raises questions over how and if the state can achieve these policy goals. The issues around oil production, offshore oil development, and the regulation of auto emissions each have a long history that demonstrates the conflict between state and federal policy, the competition among regional and economic interests, and in the economic and political challenges that an energy transition will bring.

The next parts of this introduction will explore these challenges with the issues of fracking, offshore oil development, and the regulation of auto emissions.