How California caused its own energy crisis |
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How California caused its own energy crisis
Blaming global forces for California’s high gas prices may be convenient — but it misses the point.
Prices have risen nationwide, yet Californians still pay significantly more than the rest of the country, just as we long have.
This didn’t happen to us. We built it.
Over the last 10 years, California has lost significant in-state oil production and refining capacity. In-state crude production has fallen by roughly 60% since the mid-1980s, and refinery capacity has steadily declined as facilities closed or converted operations.
Today, California imports the majority of its crude oil, much of it from foreign countries, despite still consuming millions of barrels per day.
Demand didn’t disappear.
Legislators layered increasingly complex regulations on in-state production, expanded low-carbon fuel standards, signaled long-term phaseouts, and repeatedly discussed punitive measures such as windfall penalties.
Investors do not ignore that kind of messaging. Capital moves where it is welcomed and stable.
California made it clear that traditional energy investment had no future here.
Markets responded rationally.
Refineries require billions of dollars in capital investment and operate on decades-long timelines. No company will commit that level of investment when policymakers openly say the sector is temporary.
The result has been predictable: tighter supply, thinner margins for disruption, and greater volatility at the pump.
At the same time, Sacramento expanded........