Early SB 237 Results Show California Must Go Further to Stabilize Fuel Supply

When Governor Newsom signed SB 237 last year, the administration presented the bill as a major step toward stabilizing California’s gasoline supply and avoiding future price spikes. The bill’s central promise was simple: accelerate permitting for up to 2,000 new oil wells annually in Kern County, increase in-state production, and help protect California from refinery and pipeline closures.

A new analysis from Professor James Rector of UC Berkeley, Professor Michael Mische of USC, and Joseph Silvi of UC Berkeley, now published in the California Globe, concludes that the early results are falling short of that promise. The authors write that SB 237 has not yet produced the level of permitting or production response necessary to stabilize California’s fuel supply, and that the state’s broader regulatory barriers remain the real choke point.

The authors note that, as of late April 2026, only approximately 290 permits had been issued under SB 237. That figure is at the low end of their own prior forecast, even though oil prices have risen significantly, a condition that should ordinarily encourage additional production activity. Their analysis warns that the early data is “worse than we predicted in 2025,” and that the California Energy Commission’s more optimistic forecast appears increasingly disconnected from actual field conditions.

The problem is not that SB 237 was unimportant. CIPA strongly supported SB 237 because restoring Kern County’s proven local permitting framework was necessary after years of litigation, delay, and regulatory uncertainty. SB 237 remains a critical step toward restoring predictable permitting in California’s most important oil-producing county. Given that only 12 permits were issued in all of 2025, 290 is still a major improvement. 

The problem is that SB 237 alone was never going to be enough.

Rector, Mische, and Silvi explain that Kern County production is heavily weighted toward heavy oil reserves, which require substantial infrastructure investment and long-term confidence in commodity prices. Even with today’s higher prices, operators may not have confidence that those prices will remain high enough to justify the investment needed to reverse California’s long production decline.

More importantly, the authors argue that California has failed to address the broader policy barriers suppressing in-state production. Their California Globe article identifies three immediate reforms needed to stabilize fuel supplies: rescind SB 1137, clarify SB 4 to allow responsible well stimulation in Kern County, and end the obstructionist permitting bottlenecks at state agencies.

On SB 1137, the authors make a point that has become increasingly important in the broader energy debate. They argue that modern California oilfield operations are already subject to aggressive emissions controls, and that present-day proximity concerns may be driven in part by natural seeps and orphaned wells, not active production equipment. In some cases, they argue, responsible production may actually reduce subsurface pressure and lower the volume of oil and gas available to migrate to the surface. By contrast, shutting in production near health protection zones could increase emissions from natural pathways and orphaned infrastructure.

The production stakes are substantial. According to the analysis, rescinding SB 1137 could allow approximately 25,000 to 35,000 barrels per day of incremental production within 12 months through reactivation of shut-in wells, recompletions, sidetracks, and new wells. Over five years, redevelopment of stranded light oil reserves from existing sites could yield 125,000 to 200,000 barrels per day of additional production.

The paper also highlights SB 4 and the effective halt on well stimulation in Kern County. The authors estimate that restoring SB 4 (well stimulation regulations) to its original purpose, rather than allowing it to function as a roadblock, could bring back roughly 20,000 to 40,000 barrels per day within 12 months through recompletions, restimulation of existing wells, and completion of already drilled or readily drillable locations. Over five years, predictable permitting and systematic development could support 60,000 to 80,000 barrels per day of stable incremental production.

Finally, the authors point out long-delayed Underground Injection Control permits and aquifer exemptions trapped in CalGEM, State Water Resources Control Board, and EPA review processes. They estimate that clearing those bottlenecks could restore another 20,000 to 30,000 barrels per day within 12 months, and 75,000 to 100,000 barrels per day over five years.

The bottom line is blunt: California cannot stabilize gasoline supply by passing one permitting bill while leaving the rest of the anti-production machinery intact.

SB 237 was a necessary reform, but the early data confirms it is not a stand-alone solution. California still faces declining in-state crude production, growing dependence on imported crude and refined products, and increasing exposure to global supply disruptions. The result is not reduced demand. It is imported dependence, higher costs, lost jobs, reduced tax revenue, and greater reliance on energy produced in jurisdictions with weaker environmental and labor standards.

CIPA will continue urging state policymakers to confront the full problem, not just the politically convenient portion of it. Stabilizing California’s fuel supply requires more than symbolic production policy. It requires permitting certainty, access to known reserves, responsible redevelopment of existing fields, and a regulatory structure that allows California producers to produce California energy for California consumers.

California has the resources. The question is whether Sacramento has the will.