California Legislature Acknowledges Oil Supply Crisis, Calls for California Crude Oil Production Stabilization to Avoid $10/gallon Gasoline

In a pivotal oversight hearing held on May 28, the California State Assembly's Utilities and Energy Committee convened to address escalating concerns over gasoline prices and the state's energy infrastructure. The bipartisan consensus emerging from the hearing underscored a critical realization: California faces a looming oil supply crisis, and stabilizing the in-state oil production sector is essential to maintaining affordable gasoline prices for consumers.

Assemblymember Jacqui Irwin (D-Thousand Oaks) highlighted the potential volatility in gas prices, stating, "I'm extremely concerned with the closure of the refinery; we are potentially looking at an incredible amount of volatility because we are down to so few refineries. I could picture $10 gasoline, and that would obviously be terrible for consumers."

Assemblymember Cottie Petrie-Norris (D-Irvine), Chair of the Utilities and Energy Committee, questioned the rationale behind recent refinery closures amid high profit margins, asking, "If California companies were raking it in, why did we just have two refineries announce their intent to close?"

Assemblymember David Alvarez (D-San Diego) expressed concerns about the state's role in the crisis, noting, "We have a crisis on our hands that may have been self-created by the actions that have been taken, perhaps by the state, by regulators."

These acknowledgments mark a significant shift in the state's approach to energy policy. For the California Independent Petroleum Association (CIPA), which has long advocated for a balanced energy strategy that includes responsible in-state oil production, this recognition is both a relief and a call to action.

CIPA Chairman Rock Zierman stated, "After years of policies that have constrained in-state oil production, it's encouraging to see the Legislature and the Newsom administration acknowledge the vital role our producers play in ensuring energy affordability and reliability for Californians."

The hearing also featured insights from key regulatory figures. Siva Gunda, Vice Chair of the California Energy Commission (CEC), emphasized the need for a holistic approach to stabilize the energy ecosystem.

Liane Randolph, chair of the California Air Resources Board (CARB), discussed the importance of maintaining in-state production to meet environmental standards, stating, "We want to ensure that the fuel we are using is produced with high standards."The Division of Petroleum Market Oversight (DPMO) also provided testimony on the state's gasoline market dynamics. Director Tai Milder highlighted the complexities of the market and the challenges posed by refinery closures.

CIPA remains committed to collaborating with state leaders to develop policies that support a stable and affordable energy supply while advancing California's climate goals. The association views this hearing as a positive step toward a more inclusive and pragmatic energy policy framework and is rapidly engaging all parties to ensure follow-through to avoid the crisis CIPA has been warning about for years. The full hearing can be viewed here: Assembly Utilities and Energy Committee – May 28, 2025.