California’s Energy Policy Risks Are Leaving It Behind in the AI Boom
- Randle Communications
- Apr 9
- 2 min read
In a sharp and timely op-ed, Josiah Neeley, resident senior fellow in energy at the R Street Institute, lays out a clear-eyed warning for California that if the Golden State wants to remain a global tech leader, especially in the age of AI, it must get serious about fixing its energy policies.
His piece, “To catch AI boom, California must boost energy production,” hits on a critical truth: the future of tech innovation depends on energy. And not just any energy: cheap, reliable, scalable power. Right now, California is making it too hard to build that kind of infrastructure.
AI is booming. Training models and running massive data centers takes an enormous amount of power. Companies like Microsoft and Google know this, and they’re looking for states where energy is both plentiful and affordable.
Neeley points out that California is falling behind instead of leading the charge. More data centers are being built in Texas and Virginia, not San Jose or San Francisco. One reason? California’s energy grid is strained, prices are high, and the permitting process to build new generation is a bureaucratic nightmare.
Neeley dives into how California’s policies have boxed in every kind of energy development:
Nuclear: Data center operators love nuclear for its clean, reliable baseload power available around the clock. However, California still has a moratorium on new nuclear plants, even as other states consider reactivating retired ones.
Natural Gas: Although it plays a key role in maintaining grid stability, constructing new pipelines in California is nearly impossible. The state's grid operators have acknowledged the need for more capacity, but approvals continue to be purposely stalled.
Geothermal: California has one of the highest geothermal potentials in the country; however, permitting can involve up to 11 different agencies. While large projects may qualify for streamlined processes, small and mid-sized developers often get bogged down.
Wind and Solar: Despite substantial subsidies and mandates, California still lags behind Texas in both wind and large-scale solar deployment. The reason? Texas simplifies the process of building and connecting energy projects, regardless of their source.
As Neeley puts it, “Tech companies want to build great things.” But that’s only possible if they have the energy to power those ambitions.
Currently, California is sending mixed signals. It wants to lead in AI and clean technology yet continues to restrict the very companies and innovators essential for building the foundation. When every energy source becomes politically contentious, nothing gets built. That’s the real risk.
For our oil and gas producers, this piece highlights a crucial point: permitting and infrastructure are more important than ever. California has the demand, the talent, and the capital. However, unless it simplifies the process of building and delivering energy from gas pipelines to next-generation renewables, technology will develop in other regions.