California Governor Gavin Newsom announced plans to end hydraulic fracturing by 2024 and phase out all oil and gas drilling in the state by 2045, perhaps currying favor with environmentalists as he faces a likely recall election.
The largest US state will stop issuing new fracking permits by January 2024, and the California Air Resources Board (CARB) will "analyze pathways" to end all oil extraction by no later than 2045, Newsom said on Friday. The governor signed an executive order that makes the oil phaseout part of California's plans for achieving carbon neutrality by 2045.
"The climate crisis is real, and we continue to see the signs every day," Newsom said. "As we move to swiftly decarbonize our transportation sector and create a healthier future for our children, I've made it clear I don't see a role for fracking in that future and similarly believe that California needs to move beyond oil."
If Newsom's plan comes to fruition, it will wipe out an industry that has been a major component of the state's economy for more than a century. It also could make California the first US state to exit oil and natural-gas production entirely.
Oil output in the state exceeded 1 million barrels in the 1980s, but dropped 11% last year to 394,000, according to US government data. But even with volumes down, industry interest in California's oil deposits was boosted by US advances in fracking techniques, which made fields that were thought to be largely played out more economically viable.
Then again, some observers are already questioning the credibility of Newsom's fracking ban. In September last year, the governor already signed an executive order calling to end fracking in California by 2024. Three weeks later, his administration approved permits for six new wells by Aera Energy, a well-connected joint venture between oil majors ExxonMobil and Shell.
Aera hired Axiom Advisors to lobby on its behalf. Jason Kinney, a former adviser to Newsom, is a senior adviser at Axiom. He's also the lobbyist whose birthday party Newsom attended at the posh French Laundry restaurant last November, leading to controversy over the governor's attending just the sort of gathering that he had been harping on California residents to avoid amid the Covid-19 pandemic.
Newsom had previously ended a California moratorium on fracking in April 2020, and his administration approved 24 new permits for Aera.
"Remember the last time Gavin Newsom said he was gonna ban fracking and then he didn't and quietly signed permits for fracking immediately after?" one Twitter user asked.
The earlier order called for "working to end the issuance of new hydraulic fracturing permits by 2024," but Newsom said the ban would require new legislation. State lawmakers voted down such a bill last week.
Environment group Food and Water Watch said Newsom was offering only a "half measure.""He needs to stop issuing all new oil and gas permits, ban fracking completely and phase out oil drilling now," the group said.
Newsom's latest fracking order came the same day that reality TV star Caitlyn Jenner announced plans to run against Newsom in an expected recall election later this year. A recall petition against Newsom has more than 2.1 million signatures, and if at least 1.5 million of those signatures are validated, a special election will be authorized. The governor has faced backlash over his handling of the pandemic, including the French Laundry fiasco, as well as high taxes and policies that allegedly favor illegal aliens over citizens.
Chevron, the second-largest US oil company, is headquartered in California. Another long-time California oil giant, Occidental Petroleum, moved its headquarters to Houston in 2014 and perhaps dodged a political bullet by spinning off its assets in the state as a separate company, California Resources. With Newsom's announcement today, California Resources lost 6.1% of its market value, dropping to $1.87 billion.
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