Growing up in the 1970s, energy independence was considered one of the most important aspirations for a nation (or state). The dual energy crises of 1973 and 1979 recall memories of miles-long car queues at gas stations and odd-even (license plate) rationing. During that period, it was not considered a political issue but rather a necessity for economic stability and security.
California is the world's fifth-largest economy and gets most (76 percent) of its energy from fossil fuels. (Kern County produces 71 percent and 78 percent of the state's oil and natural gas, respectively, and over 50 percent of the state's renewable energy.) Californians consume more than three times the oil than the state produces and accounts for 55 percent of net energy imports for the entire nation. In 2019, the state imported a record 58 percent — 360 million barrels — of its crude oil supply from foreign sources. In comparison, in 1989, the state imported less than 7 percent — or 47 million barrels — from foreign sources.
California’s demand for petroleum has actually increased during the second half of the last decade, even with over 600,000 electric vehicles registered in the state. California is an Energy Island. Currently, there are no existing pipelines that can bring oil to California from other parts of the United States. California must rely solely on imported oil to make up the difference. In the late 1980s, almost 95 percent of oil transported to California refineries was roughly split between California and Alaska sources. However, since then, Alaska’s oil production has decreased significantly and in 2019 reached its lowest level in more than 40 years.
This August, a federal judge blocked ConocoPhillips’ planned $6 billion Willow oil project on Alaska’s North Slope. The proposed development was intended to boost the state’s considerable production declines. California oil shipments from Alaska have dropped more than four-fold over the last 30 years while foreign imports have increased almost 800 percent over the same period.
According to geopolitical strategist Peter Zeihan, California is one of a handful of states that is structurally unable to adapt to changing global norms and supply disruptions. Reliance on foreign oil makes the state vulnerable to energy shortages and price spikes. (In addition, California forgoes critical funding for education and public services since imported petroleum is exempt from state and local taxes and significant wage income is lost to production-related employment based overseas.)
California is now considered the most “energy insecure” state in the nation and is the only one of the Lower 48 states without access to current shale oil resources. Zeihan believes it is entirely possible that Californians will be paying $10 per gallon for gasoline within a few years.
According to New Scientist, just 16 large container ships create as much pollution as all the world's (750 million) cars. A foreign oil tanker travels an estimated 8,865 miles to California ports and averages 0.004 miles per gallon during the trip. A vast majority (76 percent) of imports come from Saudi Arabia, Ecuador, Iraq, Colombia and Nigeria. According to a 2020 International Council of Clean Transportation study, 13 percent of the world’s maritime emissions were from oil tankers, which produce 114 million tons of CO2 per year.
All oil and gas produced in California is extracted under the most stringent environment regulations in the world. In contrast, countries such as Saudi Arabia and Iraq were ranked 90th and 106th in the world, respectively, in the 2020 Environmental Performance Index report published by the Yale Center for Environmental Law & Policy.
According to Freedom House, which rates people’s access to political rights and civil liberties in countries around the world, the U.S. was deemed a “free” nation, while all of California’s Top 5 foreign oil sources were rated as either “partly free” or “not free.” Prioritizing local production and lessening our dependence on foreign oil imports should be of the highest priority for our state’s citizens and policymakers.
Richard Chapman is the president & CEO of the Kern Economic Development Corp.