Long Beach Deficit Shows Why California Must #ProduceItHere

For decades, the City of Long Beach has relied on revenue from oil production from its tidelands to fund lifeguards, storm protection, beach management, convention facilities, and even homeless services. Those revenues are now collapsing.

For the first time in many years, Long Beach will face a budget deficit due to the collapse of oil revenues as early as next month when the 2026 fiscal year begins. City leaders are staring down a $300 million hole over the next decade, while more than $1 billion in critical coastal needs remain unfunded.

Why? Because California has chosen to regulate and restrict local oil out of existence.

State Rules Driving the Crisis

• SB 1137 setbacks: Passed in 2022, SB 1137 alone will cost Long Beach an additional $22.7 million in lost revenue by 2035, further draining resources needed for local services.

• Moving the goalposts: Long Beach leaders set a plan to transition away from oil slowly by 2035, years ahead of the state’s original 2045 target. But Sacramento moved the goalposts again with SB 1137, forcing the city into financial crisis.
  

Even Long Beach's own mayor, Rex Richardson, acknowledged, “Had it not been for state action, we wouldn’t be in the position we’re in today. It’s going to require state action to get out of this.”

Councilmember Kristina Duggan warned bluntly: “It will pull resources away from police, fire, parks, libraries and basic infrastructure… The urgency is clear.”

As CIPA CEO Rock Zierman has often pointed out, California’s oil producers are not just energy suppliers; they are a lifeline for local budgets: “When California strangles local production, it doesn’t just kill jobs in the oil patch. It robs communities of the revenue they rely on to fund lifeguards, parks, police and fire services.”

And the alternative is worse. As Zierman has said: “If we don’t produce it here under California’s strict standards, we’ll import more oil from regimes with zero environmental protections. That means higher emissions, higher costs, and fewer local benefits.”

The Bigger Picture

This is the real-world consequence of California’s war on in-state oil: local governments lose reliable revenue, taxpayers pick up the tab, and neighborhoods see service cuts.

Independent producers stand ready to continue safely providing the oil that funds these vital services, but unless the Legislature fixes broken laws like SB 1137, AB 1167, and permit timelines, communities across California will face the same painful reality as Long Beach: higher costs, fewer services, and deeper dependence on foreign oil.

California doesn’t need to import instability. It needs CIPA to #ProduceItHere.