After Sacramento’s Shift, Independent Producers Must Press Ahead

California policymakers are finally showing signs of acknowledging what CIPA members have been saying for years: the state cannot maintain its energy security while driving local producers out of business. After decades of climate-first policy making that sent production into steep decline, Sacramento is now scrambling to stop an exodus of oil producers and refiners.

The Wall Street Journal reported that the state has halved its crude oil output over the past twenty years and now imports more than three-quarters of its supply from overseas. That dependency has fueled record-high gasoline prices, strained refining capacity, and heightened political pressure. The result: a pivot. Legislators passed a bill allowing Kern County and the state to issue up to 2,000 drilling permits annually for new wells for the next decade. The Administration has also delayed its controversial refinery profit-cap program and has begun searching for ways to stave off additional refinery closures, such as Valero’s Benicia facility. The legislature also passed SB 767 to initiate a process to prevent pipelines from closing due to the inability to get in-state crude supplies.

These are important steps, ones that CIPA and its members have helped make possible. Independent producers, working in coalition, built the momentum that made these policy reversals credible. It is their persistence in pointing out the risks of supply shocks, price volatility, and permitting backlogs that has shaped the debate and created space for change.

Why the Wins Matter

For independent producers, the immediate gains are tangible. Expanded permitting in Kern opens the possibility of new investment. A pause on punitive refinery policies buys breathing room for refiners and their suppliers. And a growing recognition that California cannot afford more refinery shutdowns brings urgency to preserving existing infrastructure.

But these changes are not enough. They are a down payment on the deeper reforms needed to keep California’s energy sector viable in the years ahead. Without further action, the two-year wait for drilling permits will continue to choke off projects. Setback laws, as codified in AB 1137, still threaten to sterilize huge portions of Kern’s resource base. And AB 1167’s onerous bonding requirements remain a looming burden, especially for small and mid-sized producers.

The Road Ahead

The task for 2026 is clear: build on the recent course correction and push for reforms that make it possible for independent producers to survive and thrive.

• Amend AB 1137 (Setbacks): Current setback mandates make much of Kern’s acreage unworkable and completely shuts down the LA basin. A science-based reform is essential to unlock production while maintaining safety.

• Revise AB 1167 (Bonding): The bonding law imposes obligations that disproportionately fall on independent operators. It must be reformed to avoid shutting down viable wells.

• Streamline Permitting: Kern’s 2,000 permits per year are only as good as the timelines that govern them. The state’s two-year process is too slow. Independent producers need real-time approvals that match market conditions.

• Protect Refining Capacity: With fewer than a dozen major refineries left, any closure will reverberate across the state. California needs policies that keep existing facilities open and competitive, ensuring that local crude has a place to be processed.
  

A Turning Point, Not the Finish Line

California’s policy reset is a recognition of reality: a state of 30 million drivers, tens of thousands of businesses, and the fifth-largest economy in the world cannot rely on imported barrels. Independent producers have played a quiet but decisive role in making this point stick.

Now the challenge is to seize this moment. Short-term victories show the state is willing to listen. Next year, which begins now, must be about converting that willingness into durable, structural reforms on setbacks, bonding, permitting, and refinery stability.

If Sacramento genuinely wants to halt the industry’s exodus, the blueprint is clear. And CIPA’s independent producers, as they always have, will be at the center of making it happen.