Every Drop Counts: Why California Can't Live Without Its Own Oil

The Renewable Mirage

Across state capitals and global summits, there is a tenuous hope that wind and solar are pathways to a fully decarbonized future. But that optimism often skips over a crucial truth: renewables are weather‑dependent, intermittent, and structurally ill‑suited to provide the reliable energy backbone a complex, industrial economy demands.

Without firm energy base loads like natural gas, crude oil and nuclear, however, our electric grid falters. Critical services like vaccine-freezers, surgical suites, telecom networks, and digital infrastructure cannot wait for the sun to shine or the wind to blow.

Oil Is More Than Fuels

Fossil fuels are not just energy; they are building blocks. Over 6,000 every day and high-tech products from medical devices and synthetic textiles to fertilizers and plastics depend on petroleum feedstocks. Transportation systems, global logistics, agriculture, and hospitals all rely on oil‑based inputs.

There are no known replacements for much of the 6,000+ consumer and industrial products derived from petroleum. There is no plan currently to “replace” these products with products made from other materials, and any equivalents, which do not currently exist, would demand materials and technologies that are unavailable at scale.

California’s Loss Is Foreign Gain

California imports roughly 75 percent of the crude refined in its own refineries, most of which were built precisely to process California’s heavy crude. In 2023‑24, only 23.3 percent of refinery feedstock came from in-state production; Alaska delivered another 13 percent, while 63–65 percent came from foreign sources like Ecuador, Iraq, Saudi Arabia, Brazil, and Colombia (California Energy Commission, Extracting Fact, LA County EDC). That translates to over 1.4 million barrels per day of imported crude while California produces less than 400,000 bpd locally.

The Price of Dependency

When in-state refining capacity shrinks, and it is set to drop by up to 20 percent as Phillips 66 and Valero close refineries, imports spike, supply tightens, and pump prices surge. In mid‑2025, imports rose to a four‑year high of 279,000 bpd, about 70 percent from Asia and even the Bahamas and India, driving monthly gasoline prices in California to an average of $4.68/gallon, well above the national average of $3.12 (Reuters, San Francisco Chronicle).

Independents: The Unsung Backbone

Much of California’s remaining production, especially in mature fields like Edison in Kern County, is run by small independent operators who coax oil from aging reservoirs. These producers are the boots-on-the-ground innovators, maintaining production under heavy regulation and environmental oversight; yet their output has declined nearly significantly in just the past four years due to restrictive policies and the state’s unwillingness to process permits.

Why We Must Protect and Grow In‑State Production

To keep refineries open, secure affordability for consumers, preserve high environmental and labor standards, and maintain economic resilience, California must:

• Reject restrictive laws like AB 1448, which further constrain oil recovery from existing formations.

• Support and streamline permitting and operation of independents.

• Invest in technologies like carbon capture, enhanced oil recovery, and hydrogen blending to make fossil fuel use cleaner.

  
  

Data Speaks Volumes

• In 2024, California produced 104 million barrels, only about 2 percent of U.S. total onshore/offshore production—though it holds roughly 3 percent of national reserves (~1.7 billion barrels proven) (eia.gov, instituteforenergyresearch.org).

• Despite being the 8th largest oil producer in the nation, most supplies still come from outside our borders, and California’s reserves remain largely untapped.

• Independents and regional producers contribute significantly—not just in production but in public revenue ($1.5 billion annually), jobs (over 50,000 Californians), and community investment (energyindependenceca.com, energyindependenceca.com).

  
  

A Call to Action

As author Ronald Stein has explained to CIPA members firsthand, California must embrace a realistic energy future, where every barrel recovered here is cleaner, more reliable, and far cheaper than imported oil. This is not anti-renewable; it is pro-reality. It’s about making sure that if renewables falter, we have a secure fallback.

We cannot have prosperity, resilience, and environmental responsibility on an ideological diet of sunshine and breeze alone. California’s independent oil producers are critical partners in our energy story and deserve policies that let them survive and thrive for decades. Support local production. Protect affordability. And above all, use the energy that California already possesses.

Original framework and analysis courtesy of Ronald Stein. Yoshihiro Muronaka co‑authored this revision to sharpen the case for independent producers and homegrown energy security.