The recently passed SB 237 streamlines the approval process for oil drilling in Kern County in an effort to increase oil production and help stabilize California’s gasoline and oil markets. The law originated as part of a series of California Energy Commission recommendations in response to plans to close two refineries and fears of a gasoline shortfall. The recommendation to increase oil drilling in Kern received almost immediate opposition from environmental groups concerned about preserving “California’s life-saving health, climate, and environmental protections.” They argued that the law’s exemptions from the California Environmental Quality Act (CEQA) “would gravely harm the air we breathe and water we drink around the state, but have no impact on refinery closures or gas prices.”
While the impact of increased in-state oil production on refinery closures or gas prices is uncertain, the environmental opposition is based on incomplete accounting. Any discussion over expanding oil drilling in California must consider the state’s dependence on imported oil that is produced under weak environmental protections, contributes to the destruction of the Amazon Rainforest, and is shipped thousands of miles across the ocean. Oil from California’s main suppliers is produced with environmental protections that are weaker than California’s standards and total greenhouse gas (GHG) emissions that are higher than those associated with oil produced in the state. Increasing in-state oil drilling would reduce this dependence and lessen California’s global environmental impact.
California’s Dependance on Imported Oil
California’s in-state oil production has declined steadily since the 1980s, from a high of 393 million barrels in 1985 to 104 million barrels in 2024. Oil demand, while falling from a high of 708 million barrels in 1988, has been steady at more than 500 million barrels per year since 2021. Imports of foreign oil have made up the difference and have provided an increasing share of California’s oil supply to refineries, growing from below 10% in the early 1980s and mid-1990s to 56% in 2021, 59% in 2022, 61% in 2023, and 64% in 2024.
California’s oil imports come from nine countries, according to the California Energy Commission. The top sources in 2024 were Iraq at 21%, Brazil at 20%, Guyana at 16%, and Ecuador at 14%. None of these countries is known as a steward of the environment. Iraq ranks third in the world—behind Russia and Iran—in flaring natural gas, a process in which excess gas is burned during oil extraction. California’s other leading oil suppliers produce oil in the Amazon region, where deforestation from the exploitation of natural resources is a significant contributor to climate change.
Ecuador has a long history of Amazon oil production and related environmental degradation. Guyana, meanwhile, looks to become a growing producer in offshore oil in the Atlantic Ocean, along the so-called “Amazon coast.” Brazil, which currently produces oil in the Amazon, recently approved exploratory drilling near the mouth of the Amazon River.
Oil production in the Amazon looks to increase, as almost 20% of global reserves discovered during 2022 and 2024 are in the region. California, for its part, is the top consumer of crude oil from the region, as approximately 50% of all oil exported from the Amazon goes to California refineries, according to a California State Senate resolution.
The production process is only a part of the environmental impact from California’s dependance on oil imports. After extraction, the oil is shipped to the state by tanker, traveling thousands of miles for more than two weeks. Oil tankers produce a significant amount of GHG emission through the burning of heavy fuel oil and marine diesel, but the emissions from the journey are not tracked. The California Air Resources Board (CARB) tracks and reports emissions from ocean-going vessels within 100 nautical miles of its coastline only. The total emissions from shipping are significantly underestimated.
The California legislature has resisted efforts to account for the emissions and environmental impact of imported oil. State Senator Shannon Grove has repeatedly introduced legislation to monitor crude oil imports into California and publicly identify countries that have documented human rights abuses or environmental standards for oil production that are lower than California standards. The bills would also require CARB to publish an annual assessment of the GHG emissions associated with the transportation of oil from the point of origin to its point of destination in California. This would include both imported oil and oil produced in the state. Grove has been unable to advance these bills.
A More Comprehensive Approach
A more serious energy policy would require an accounting of the emissions and environmental impact of imported oil. It would recognize that, while demand might be falling, California will need a substantial supply of oil for a long time to come. Oil not produced in the state will be produced in foreign countries under weaker environmental standards and with much greater GHG emissions.
A serious energy transition policy would also recognize the need for the state to reduce exposure to oil-related geopolitical shocks on its economy and the need to maintain political support for its energy transition policies by making energy more affordable. It would also recognize the potential for tax revenue from oil production to fund energy infrastructure and the benefit of keeping a highly skilled oil workforce in the state.
Beyond simply increasing oil production in Kern County, SB 237 provides state leaders with an opportunity to take a holistic approach to energy policy, recognizing the continued need for oil and honestly assessing the global environmental impact of its overall oil policy. This approach, rather than pursuing international climate partnerships, would do more to fulfill California’s claims to be a global climate leader.