Dan Walters

Observations on California and its politics

Dan Walters: Oil production presents a huge dilemma

05/01/2014 5:05 PM

05/01/2014 9:19 PM

California is an auto-dependent society, with 25 million licensed drivers – two-thirds of our population – and 30 million motor vehicles consuming 16 billion gallons of fuel each year to rack up 329 billion miles of travel on 172,000 miles of roads, streets and highways.

That evolution was fueled, as it were, by an abundance of cheap oil. California was one of the nation’s earliest oil producers and still is its third most productive state, but after peaking at nearly 400 million barrels a year in 1985, in-state production has slowly declined to half that level now.

Therefore as the state’s population expanded, as vehicular travel increased – doubling in the last 30 years – and as demand for petroleum increased, our supply has increasingly come from elsewhere.

As the California Energy Commission reminds us, “California is a net importer of oil. It produces only about 37.2 percent of the petroleum it uses.”

Therein lies one of our conflicts. While our petroleum consumption has moderated in recent years, thanks to big increases in auto mileage, our cars still have a huge thirst that’s unlikely to diminish anytime soon.

We could increase in-state oil production if we were willing to tap into immense reserves – perhaps the largest of any state – in shale deposits in and around the lower San Joaquin Valley.

Joining the shale oil boom would also be an economic boost, but it would require hydraulic fracturing (fracking) and other aggressive recovery techniques that many Californians consider noxious.

Environmental groups, citing potential health and environmental damages and angered that the Legislature and Gov. Jerry Brown have allowed fracking with tight regulation, want a moratorium. This week, a Senate committee passed a moratorium measure and one of those voting for it was the author of last year’s permissive bill, Sen. Fran Pavley.

Brown is very unlikely to sign a moratorium bill were it to reach him, so it’s mostly a symbolic gesture.

Ironically, however, the same liberal legislators who support a fracking moratorium also back another bill making its way through the Senate to impose a 9.5 percent tax on California oil production (and one on natural gas as well) with the proceeds, about $1.5 billion a year, going to higher education, parks and other purposes.

That bill also is probably doomed, because it would require a two-thirds vote, meaning a couple of Republican senators would have to back it, and that’s not going to happen.

However, were the Legislature to pass a levy on extraction and ban fracking, the much-vaunted oil tax – a holy grail goal of liberals for decades – would generate declining amounts of money as oil production declined.

Thus, our conflicts over being so utterly dependent on a commodity we fear, produced by companies we love to hate, translate into nonsensical politics as well.

About This Blog

Dan Walters' column appears in dozens of California newspapers. He joined the Sacramento Union’s Capitol bureau in 1975 and in 1981 began writing the state’s only daily newspaper column devoted to California political, economic and social events. He and the column moved to The Sacramento Bee in 1984. Contact him at dwalters@sacbee.com or 916-321-1195. Twitter: @WaltersBee

 

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