Ending California’s “War On Oil” (Part 2)

By Mike Stoker, esq. (ret.), Professor James W. Rector (UC Berkeley), Professor Michael Mische (USC), and Joseph Silvi (UC Berkeley)

To counteract the recent actions of the State of California and its “War on Oil,” which pose an economic, societal, environmental, and most importantly, a National Security threat to the United States of America, we suggest an Executive Order to bring all California oil and gas operations as well as refinery and pipeline operations under the jurisdiction of the U.S. Government. Based on numerous independent studies and extensive discussions with producers, refiners, and pipeline operators, we have concluded that this could result in:

· Incremental (new) crude oil production ranging from 532,000 to 935,000 barrels of oil per day from California over a five-year period.

· Total estimated 732,000 to 1,135,000 barrels of oil per day in California production over a five-year period, inclusive of incremental production.

· Reduction or substantial elimination of foreign oil dependency and imports over a five-year period, resulting in energy independence.

· Reduction or substantial elimination of the $80 million a day in payments to foreign suppliers for crude oil imports.

· A 4% to 7% increase in total U.S. crude oil production over a five-year period (at current rates), thereby strengthening U.S. energy independence.

· Reduction in import-related air pollution and greenhouse gas emissions due to an increase in in-state crude oil production and a proportional decrease in polluting imports and use of foreign-flagged maritime tankers over a five-year period.

· Reduction in naturally occurring and avoidable air pollution and greenhouse gas emissions. California has thousands of naturally occurring onshore and offshore oil leaks that seep from the ground every day. Since the leaking oil and gas (seepage) is not being diverted into producing wells, it causes extensive local pollution and contributes to global warming. The La Brea Tar Pit in Los Angeles is perhaps the most famous of these. Producing oil domestically is an environmental imperative as well as national security necessity.

· Increased employment and state and local tax revenues over a five-year period.

· Increased federal tax, fee, and royalty revenues.

The implementation of this Executive Order to bring all oil and gas operations, as well as refinery and pipeline operations, under the jurisdiction of the U.S. Government could dramatically increase California’s oil production. Tens of billions of barrels of recoverable oil remain in California, representing untapped strategic and economic resources for both the state and the U.S.

Over a five-year period, with federal management, oversight, support, accelerated permitting, and standard regulation, California could generate 532,000 to 935,000 barrels of oil per day (BOPD) in incremental (new) production by rapidly developing known fields in the following regions:

San Joaquin Basin

In total, the San Joaquin Basin (SJB) represents approximately 145,000-225,000 BOPD of incremental production potential. The SJB produces over 70% of California’s onshore oil, over 80% of which is heavy oil requiring steam flooding to enhance oil production. Developing the basin’s prolific Diatomite reservoirs, which are currently unproducible due to the state’s de facto hydraulic fracturing ban, could significantly increase the SJB’s production of medium and light oil, adding 65,000-100,000 BOPD. Under a DPA framework, 15,000 BOPD could come online within one year, and up to 100,000 BOPD could be achieved from the Lost Hills and Belridge diatomite reservoirs.

Thousands of formation water disposal permits are also currently being held up by the state and impeding additional oil production in the SJB and statewide. Additional light oil recovery from deeper Stevens and Monterey reservoirs via CO2-based enhanced recovery, combined with heavy oil projects currently suspended in state permit purgatory, could add a further 80,000-125,000 BOPD.

Offshore Santa Barbara County

Offshore development could triple to quintuple the current production from offshore California, adding significant incremental production to the 52,000 BOPD already coming from the Santa Ynez Unit, which could ultimately produce up to 100,000 BOPD as a result of the DPA order in March 2026.

The Santa Barbara Channel and adjacent Santa Maria Basin offshore trend represent one of the largest undeveloped domestic oil opportunities remaining in California. Significant hydrocarbon resources remain in both state and federal waters, much of which may be accessed from onshore drilling locations using modern extended-reach drilling technology. Broad, aggressive redevelopment across the Santa Barbara Channel and Santa Maria Basin offshore trends could potentially support incremental regional production of approximately 130,000-270,000 BOPD over a five-year period.

The South Ellwood Field

Offshore from the UC Santa Barbara campus is a particularly intriguing drilling target. Much of the South Ellwood field is relatively undeveloped, with over 600 million barrels of recoverable oil remaining. Furthermore, the seeps above the reservoir are among the largest contributors to air and marine pollution in the area. Historical production from the field demonstrably reduced seeps here, leading to meaningful reductions in the toxic gases and other hydrocarbons being naturally released into the ocean and air through seeps.

Extended-reach drilling from land can be used to tap the reservoir today without platforms or large footprint infrastructure, and incremental production of 50,000-100,000 BOPD could be realized in five years. A new land drilling island and a short pipeline extension would need to be constructed, and a permit to produce under state lands would need to be issued.

Los Angeles and Ventura Basins

Development of the Los Angeles and Ventura Basins could triple their current production. Over a five-year period, coordinated redevelopment of all Los Angeles and Ventura Basin fields could add 115,000-165,000 BOPD of incremental production. The Los Angeles and Ventura Basins remain one of the largest mature urban oil provinces in the United States and still contain substantial remaining recoverable hydrocarbons within existing giant fields.

Most opportunities are characterized by low geologic risk, low development costs, extensive existing infrastructure, nearby refining capacity, and well-understood conventional reservoirs. With political stability provided by the DPA and the removal of state setback rules, the basin would attract development capital. The United States Geological Survey (Gautier et. al, 2012) estimates between 1.4 and 5.6 billion barrels of remaining recoverable oil, principally medium and light, exists in the Los Angeles Basin spanning both Los Angeles and Orange Counties.

Beverly Hills and Downtown Los Angeles

The Beverly Hills and Downtown Los Angeles area is a particularly strong drilling target because, after 100 years of production, the reservoirs are still more than 80% full of oil on average. A study (Gautier, 2018) found that over 1.5 billion barrels of recoverable oil are present in the area and its immediate vicinity. There are five drilling/production ‘islands’ in the region, some of which are inside buildings. With modern drilling, seismic, and steering technology, the deep reservoirs can be tapped several miles from these existing islands without massive infrastructure buildout or greenfield development. An active program in the heart of Los Angeles could add approximately 25,000-50,000 BOPD within five years. The drilling would also reduce pollution and methane emissions from toxic seeps in the area, like the La Brea Tar Pits.

Central Coast

Development in the Central Coast region, comprised of the onshore Salinas and Santa Maria Basins in Monterey, San Luis Obispo, and Santa Barbara Counties, could apply modern, Canadian-style, low-footprint advanced development techniques (including multilateral wells, high-density pad drilling, and improved reservoir imaging) to increase recovery factors and well productivity, potentially allowing the region’s current oil production to increase by 4-8x, adding 40,000-75,000 BOPD of incremental oil production.

Achieving this production potential within a five-year period requires federal authority to cut through the permitting delays, setback restrictions, and regulatory bottlenecks that have stalled development across all these regions. The resources and infrastructure are well understood. What has been missing is the regulatory certainty that only federal jurisdiction can provide.

Figure 1 below illustrates the potential for 532,000 to 935,000 barrels of oil per day in new, incremental production, by region, that could be achieved if the federal government were to implement this suggested Executive Order and assert jurisdiction over California oil and gas operations.

The Santa Ynez Unit’s current production of approximately 52,000 BOPD, already underway following Presidential EO 14391 in March 2026, is reflected in the low estimate for that region. Figure 2 contrasts California’s projected baseline production of 200,000 BOPD in five years under continued state management and current decline rates with total projected production under federal intervention, illustrating that the proposed Executive Order could increase California’s total daily oil output to between 732,000 and 1,135,000 BOPD over five years, approximately 3.5x to 5.7x the projected baseline.

Figure 1. Incremental California Oil Production Enabled by Federal Intervention (BOPD)

Figure 2. California Oil Production: Without vs. With Federal Intervention (BOPD)

California’s Reliance on Foreign Oil is Dangerous and Dirty

Implementing the suggested Executive Order to bring all oil and gas operations, as well as refinery and pipeline operations, under the jurisdiction of the U.S. Government is in the best interests of the nation and those of California. As demonstrated by recent events, California’s reliance on foreign oil producers is fraught with risk and exposes California and the nation to the actions of foreign players whose interests are adverse to the nation. Furthermore, California’s policies contribute to increased global pollution, greenhouse emissions, and financially support foreign regimes such as Russia.

To effectuate the delivery of new, incremental production to market (refineries) will necessitate two additional supporting and essential Executive Orders. The first supporting Executive Order would direct the restarting of the San Pablo Bay pipeline. This 200,000+ BOPD pipeline transports crude oil from Central and Southern California to the San Francisco Bay Area. The pipeline has functionally collapsed due to a lack of sufficient in-state production. The second supporting Executive Order would direct PBF Energy’s Martinez refinery, a 157,000 BOPD facility currently receiving substantial amounts of imported crude via maritime delivery, to prioritize California-produced crude oil delivered via the San Pablo Bay pipeline over imports, at a ratio to be determined. As the federal government would be directing PBF to shift away from imported crude oil toward California-produced crude oil, appropriate offsets for any crude cost and transportation differentials would be provided as needed to ensure the order does not impose undue financial burden on refinery operations.

Conclusion

California’s oil and gas industry accounts for around 8% of the state’s GDP, but critically, it is the first 8% upon which all other industries rely. Without oil, the other 92% would be impossible to attain. Without petroleum, asphalt cannot be made, roads cannot be paved, and steel cannot be produced. Without gasoline, natural gas, and diesel fuels, California agricultural production would be a fraction of what it is today. EVs may ultimately replace internal combustion engines, but in California today, fully electric vehicles account for less than 7% of the cars on the road. EV growth has also slowed dramatically since federal subsidies were removed. Moreover, there are no viable alternatives at scale for replacing jet fuel as well as many petroleum-based products and petrochemicals.

While the state may wish and try to mandate that oil demand would drop precipitously, the data show a modest overall annual decline in demand that is not accelerating, thus requiring in-state production, transportation, and refining, for decades to come. In fact, jet fuel consumption is increasing significantly.

Responsibly developing California’s crude oil resources and preserving its pipelines and refineries are essential to ensuring the economic viability of the state, reducing consumer prices and state debt, improving social outcomes, resolving environmental issues, and maintaining the national security of the U.S. By invoking the suggested DPA discussed herein, and issuing Executive Orders to the Department of Energy and Department of Interior, the President can ensure crude oil and fuel security for California and strengthen national security and the U.S. military force readiness for generations to come.

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About the Authors

Mike Stoker: Environment, Energy & Agriculture Attorney (ret.), former Southwest Administrator US EPA; Former member of Santa Barbara County Board of Supervisors, and currently President & CEO Santa Barbara County Taxpayer Advocacy Center.

Dr. James W. Rector: Professor of Geophysics and Energy, Department of Civil and Environmental Engineering, and Department of Earth and Planetary Science; Senior Faculty Scientist, Lawrence Berkeley National Laboratory

Michael Mische: Associate Professor of Professional Practice, Marshall School of Business, University of Southern California; Senior Faculty Researcher, Oil and Gas Zage Business of Energy Initiative

Joseph Silvi: B.S. Environmental Engineering, Department of Civil and Environmental Engineering, UC Berkeley; Energy Researcher and Environmental Advocate

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