California's Oil Industry: A Shift Towards In-State Production Amid Refinery Closures

California lawmakers signal willingness to relax oil industry stance, but analysts remain skeptical of change. Retail gasoline prices are high and expected to increase after refinery closures. Industry experts say the state must incentivize oil companies to stay, as they have no market incentive to remain. Increasing in-state crude oil production could stabilize gasoline prices.

Title: California Lawmakers Propose Easing Oil Drilling Permits, Amidst Skepticism and High Gas Prices

California Governor Gavin Newsom has proposed a bill to streamline the permitting process for new oil wells, a move that has sparked controversy and skepticism among environmental groups and analysts. The bill, if passed, would establish a "plug-to-drill" permitting system until 2036, requiring two wells to be plugged and abandoned before a new one is drilled. Additionally, drillers would no longer need well approval from the Geologic Energy Management Division (CalGem) under certain conditions [1].

Shares of in-state drillers like California Resources Corporation and Berry Corp. reacted positively to the news, with California Resources Corporation jumping 4.8% and Berry Corp. up 6.9% [1]. However, environmental groups argue that this bill would reduce the scrutiny of the oil industry and pose risks to public health and wildlife.

Meanwhile, the Bureau of Land Management (BLM) has announced plans to evaluate opening up over 122,500 acres of San Luis Obispo County land to oil and gas leasing. Environmentalists have long opposed such expansion, citing health and wildlife risks [2]. The BLM's plan revives a Trump-era policy and is set to undergo a public comment period, with a final environmental report due by February 2025.

The current high retail gasoline prices, exacerbated by refinery closures, have led industry experts to suggest that California must incentivize oil companies to stay. Increasing in-state crude oil production could help stabilize gasoline prices, but analysts remain skeptical of the proposed changes [3].

The proposed changes come at a time when California is grappling with high gasoline prices and the need to balance environmental concerns with energy security. While the bill aims to streamline the permitting process, environmental groups and analysts remain concerned about the potential impacts on public health and wildlife. The public comment period on the BLM's plan is scheduled to open on July 23, offering an opportunity for stakeholders to voice their concerns.

References
1. https://news.bgov.com/environment-and-energy/newsom-proposes-to-ease-permits-for-oil-drilling-in-california
2. https://www.sanluisobispo.com/news/local/environment/article310421755.html
3. https://www.eia.gov/dnav/pet/hist/leafhandler.ashx?f=m&n=pet&s=emm_epm0_pte_sca_dpg