CIPA Responds to CEC: Local Oil Is Key to Solving California’s Energy Crisis

In a bold and fact-driven letter delivered to California Energy Commissioner Siva Gunda last week, CIPA CEO Rock Zierman outlined a clear and achievable path for stabilizing the state’s energy market: support in-state crude oil production.

Zierman’s response follows the CEC’s June 27 letter to Governor Gavin Newsom offering policy recommendations to ensure safe, affordable, and reliable transportation fuels for Californians. While commending the CEC for identifying the importance of local oil, Zierman pressed further, pointing out that California’s oil demand remains high and that only domestic production under the state’s strict environmental rules can offer long-term relief to strained refineries and price-weary consumers.

“California consumes 1.8 million barrels of oil daily,” the letter states. “Despite policies pushing electric vehicles and renewables, overall fossil fuel demand has increased by 7.5% since 2014.”

In short: California isn’t using less oil; it’s importing more of it.

Even under California’s net-zero 2045 goals, the California Air Resources Board (CARB) estimates the state will still need 400,000 barrels per day to manufacture over 6,000 everyday products, including the transformer oil required to run the electric grid. Current in-state production is barely 300,000 barrels per day. That means every lost California barrel must be replaced by imports, mostly from countries that do not comply with California’s environmental standards.

The economic and environmental contradiction is stark. As Zierman notes, “It is hypocritical for the state to shut down in-state oil production and cause other regions of the world to supply its energy… Let’s instead make it here in California, by California workers, paying California taxes, under California’s strict environmental rules.”

The letter identifies several policy interventions that could immediately unlock local production potential:

• Codify Kern County’s CEQA-compliant oil and gas ordinance to stabilize permitting in the region responsible for two-thirds of California’s oil production. This would help counter years of inaction by CalGEM, which approved only 48 new well permits statewide last year.

• Fix SB 1137, the arbitrary 3,200-foot setback law, which has already shuttered affordable housing projects and threatens 80% of production in the LA Basin. CIPA calls for common-sense updates that allow maintenance and operation of existing wells while respecting science-backed CEQA reviews.

• Reform AB 1167, the flawed bonding bill that has frozen all oil asset transactions in the state for over a year. CIPA proposes reasonable alternatives like sinking funds and performance-based bonding for operators with good standing.

• Start the clock on permit expiration only after CalGEM approval, not upon submission. This would prevent permits from lapsing due to bureaucratic delays.

• Clarify that California does not ban well stimulation, but regulates it under SB 4, some of the most rigorous standards in the world.

These approaches are practical, science-based solutions that allow the state to reduce its foreign oil dependence, protect refinery operations, and keep energy prices in check.

As Commissioner Gunda rightly noted, the energy transition must be carefully managed to preserve reliability and economic stability. That can’t happen without “sustained investments in both legacy and emerging infrastructures.” In-state oil is part of that legacy, and it’s indispensable to California’s near- and mid-term future.

Refineries cannot survive on foreign crude oil. Logistics, quality specs, and pipeline infrastructure are calibrated for local feedstocks. If those barrels of oil disappear, some refineries would be forced to shut down, triggering fuel shortages and price spikes that hit working families hardest.

CIPA will continue to work with the Energy Commission, Governor’s Office, and Legislature to implement critical reforms. The solutions are on the table. The state must choose whether to lead with innovation or double down on importing the environmental consequences of its own energy use.

CIPA’s message is unambiguous: California has the tools. What it needs now is political will.