From the “everything is leaving California these days” department. The collapse of the oil industry in California, once our second-most-important producing state, is a very sad thing to see.
The U.S. shale oil revolution has completely passed the state by.
Although domestic crude oil production has reached heights not seen since the early-1970s, and will actually be setting new records this year, California’s oil output has plummeted nearly 60% since peaking in 1985 — with no sign of reversing. In stark contrast, mighty Texas has seen its crude production triple since 2010 alone to 3.6 million b/d.
The facts remain: While California positions itself a leader in “clean energy,” that hardly means that the state doesn’t use oil, still easily our most vital fuel. In fact, California uses a ton of oil. For every vehicle that California has that runs on electricity, it has 115 that run on oil. Here are the overwhelming oil demand numbers in California that the state’s politicians ignore:
- Every day, California consumes around 38 million gallons of gasoline…8 million gallons of diesel fuel…and accounts for 20% of all U.S. jet fuel consumption.
Yet, California continually enacts policies to not produce any more oil itself. Unfortunately, imports from undemocratic oil nations have been forced to compensate: California’s Imported Oil Problem. Simply put, oil policies that hurt Canada and favor Saudi Arabia are more “greenwashing” than they are “green.” And poor energy policies also help to explain Why are California’s Gasoline Prices Always Higher?
For shale oil, California could seek the Monterey formation, but that seems highly unlikely. The Monterey “contains vast reserves of oil” and should be key to California economic future. Offshore development? No chance.
And while championing itself as a leader in energy efficiency, Los Angeles Tops INRIX Global Congestion Ranking. “Angelenos spent an average of 102 hours last year in traffic jams during peak congestion hours, costing drivers $2,828 each and the city $19.2 billion from direct and indirect costs.” Although to be fair, this is a national problem: “As much as 15% of all the gasoline burned in America—up to 25% in places like Los Angeles—is burned by cars that aren’t moving.”
But overall, missing out on the shale revolution for California might be worse for the natural gas side of things. Even though California Is A Natural Gas State, it imports about 95% of its supply, a growing problem considering how pretty much every state is moving increasingly toward more gas-based electricity to lower greenhouse gas emissions.
A significant portion of California’s oil production is from heavy oil fields requiring steam injection, generally, not unlike the Canadian Oil Sands production not suitable for surface mining. More than a decade ago, when I was employed by Husky Energy in Calgary and had several heavy oil experimental projects on the go and was Husky’s corporate GHG compliance guy, I had occasion to read several reports (scholarly articles) stating that California’s per unit GHG emissions were in the same ballpark as those from the Canadian Oil Sands, surface mining and in-situ.
I would wager that the situation is more or less the same now. Here’s a recent article on the topic:
https://e360.yale.edu/features/why-does-green-california-pump-the-dirtiest-oil-in-the-u-s
Who cares about how much carbon is emitted we need more CO2 in the atmosphere not less.
California piggies on the consumption side….
https://www.eia.gov/state/seds/data.php?incfile=/state/seds/sep_fuel/html/fuel_mg.html&sid=US
As long as there are states that produce enough oil, California can continue on ignoring its own resources. Any costs are just passed on to the consumers, so yes its expensive to live there but the government doesn’t really care. The higher their welfare costs (which are affected by fuel costs), the more they just tax everyone – what could go wrong with that?
There are still plenty of high-tech industries in California to prop up (in tax revenue) its bad government for a while yet.
The real elephant in the room is fresh water. They do not have a lot of options for fresh water other than producing it from ocean water, and that requires a lot of power. At some point California runs smack into a Fresh Water deficit that has no easy answers. Their agriculture output will collapse once surface water is not available (needed for cities), and aquifers go dry or produce saline.
Yes, water…
Famous movie quote:
Zaius: The Forbiddon Zone was once a paradise. Your kind made a wasteland of it, ages ago.
Or the next tech bubble.
There are huge rivers north of the dry parts of California, both the northern part of the state and Oregon and Washington.
If not for the climate change bogeyman distracting the conversation away from the fact that there are dry years and wet years in So.Cal., then the easy solution would be right now on the table. Negotiations, dams and pipelines, etc.
But no.
Apparently it has not ever gotten bad enough for people there to snap out of their stupor and start using some common sense.
Typical of liberal mentality, they want all the benefits of society without the responsibility required to have those benefits. As with manufacturing and resource recovery, there are major benefits from these activities but there are costs as well. But the liberal mindset doesn’t want the compromise necessary to have the benefits.
The same goes for renewable energy. But right now the greens are willing to have the detriments of green energy, wind farms that are noisy and eyesores or renewable crops that hurt the land and waterways, for the thought that they are saving the environment. This will change too. I can see a day when the greens feed on each other over these issues. That will be an interesting time. Popcorn sales will increase markedly.
It may be more like, people start dying and the people responsible start getting lynched.
Folks get mighty unhappy when their kinfolk die because of someone else’s greed, lies, stupidity, criminal behavior…
They could get lucky and muddle through with nothing like that.
In my experience, things do not get interesting, they get disgusting, when painful changes come.
How about the oil companies and POTUS Trump order say a one month stand down on gas refining, natural gas importation and ICE operations in Cali? That might get their attention.
I am glad I do not live in a place where the President can “order’ a “stand-down” on people’s jobs and livelihoods nor corporations collude to interfere with the economy, or attempt to get what they want by economic blackmail.
So you’re okay with California not enforcing the law? I live in a place where my state govt choose’s to pick and choose which laws they will enforce. The fact is people are dying because of these actions. And private companies have the right to increase or decrease production. California has boxed itself in with psuedo science gas blends. Only a handful of refineries are capable of producing “legal” gas blends. Some “un-scheduled” maintenance on two refineries could send gas prices through the roof. The central planners shouldn’t have left themselves so vulnerable. Turn about’s fair play.
Imports into California are kind of irrelevant. For the last six months the total net imports into the US has been less than our imports from Canada. The reason I bring this up is that we typically consider imports of oil bad because they come from places like Saudi Arabia and Venezuela. If we stopped importing oil from any country not named Canada we would have the exact same amount of oil in the country. The only difference is that we would stop making money by importing foreign oil refining it and then exporting it at a profit. The fracking revolution has no more passed by California than it has passed by Nevada. Both states import their fuel from exotic locations like “Texas” and “Alberta.” Both states have fuel prices that are substantially lower than they would be in the absence of fracking. Both states are members of a nation that has full energy security (if we assume that Canada will not impose an oil embargo).
Would I like to see sensible energy policies in California? Yes. However, it is the duty of the citizens of California to elect sensible politicians that will enact such policy. I do not think the rest of the country should touch California’s energy policy any more than they should touch Texas’ policy.
As an aside, maybe we should allow tankers to dock in Houston, load oil, and then ship it to Long Beach. The legislation behind that particular piece of idiocy is national.
“As an aside, maybe we should allow tankers to dock in Houston, load oil, and then ship it to Long Beach.”
Not sure the Panama Canal handles supertankers, but quite sure that pipeline is far cheaper.
Been waiting for California to pass a law making fossil fuels illegal. Why should California be satisfied with just a moderate amount of hypocrisy.
So, the legislators are going to drive to work one fine day and make the means by which everyone in the state gets around, and gets to and out of the state, illegal?
Even the places that are making such laws (EU countries) are not doing it in a time frame which will take effect while those voting on the law are still around.
Yes, they are jackasses, but even jackasses have limitations. If they ever made such a law, they would walk out to their cars afterwards, stop, look around at each other, and go back inside and vote to reverse their earlier vote.
Here’s a long article by Michael Shellenberger that includes details of how Jerry Brown’s family benefits from oil:
http://environmentalprogress.org/big-news/2018/1/11/jerry-browns-secret-war-on-clean-energy
Excerpt:
Staggering the number of people in positions of power and influence want the rest of us to use energy less and pay more for it who’s family wealth was derived from the very stuff they want us to stop using. Hypocrites the lot of them!
Trump has opened the door to offshore California drilling. Californians who vote for this reckless government must be benefiting somehow.
Er that is reckless California gov.
When I saw the title I read it with an extra character. I thought it read:
“The Prince of Eco-Madness: California’s Oil Production Collapse”
I thought it would be about Jerry Brown. Although apparently it was as much George Deukmejian, Gray Davis, and Arnold Schwarzenegger as Good Ole Jerry. In fact, Jerry oversaw California at its absolute height of oil production.
A couple of years ago, a California refinery had an unscheduled shutdown when inventories of gasoline were low. Importing (from neighboring states) refined product wasn’t allowed, as California has its own product specifications (for its clean air rules) that no other jurisdiction processes and thus created a manufactured crisis. The resulting chaos was fun to watch. Not so entertaining if you were a California resident having to commute via freeway.
This article would be easier to follow if Americans distinguished between “gas” meaning a fuel in a gaseous state ( ie not solid or liquid) and “gas” a liquid fuel. Just sayin’. I don’t normally have a problem with US English and British English, but this is one where the British have got it right. (Petrol! Diesel!)
The NY Times always puts liquid “gas” (for gasoline) in quotation marks.
Well, at least there will be more left in the ground for a future, saner, generation to make use of 🙂
I am not a geologist just a modest once mechanical engineer. I am not looking forward to the beaches along the Santa Barbara Channel once again befouled by heavy oil seepage that declined significantly with the onset of offshore extraction.
Rob Dawg
That is an interesting and apparently often forgotten point that extraction can stop reservoir surface seepage. The Louisiana spill came from a deep area known from surface observation to be leaking a century ago. It has a specialized oil dependent benthic fauna.
As of 1994, there were an estimated 5,000 natural oil seeps in the Gulf of Mexico or was it 50,000? I think it was 5,000 leaking 50,000 barrels per day. Texas A&M University research.
Note that just because a car is electric doesn’t mean it runs oil-free. That electricity comes from somewhere, most likely from oil.
In California more likely coal powered.
The chart looks about like Venezuelan oil production, another outcome by policy dysfunction.
If it weren’t for high-technology paying CA’s bills, CA *would* look like Venezuela in more ways than one.
” For every vehicle that California has that runs on electricity, it has 115 that run on oil. “
Don’t forget that the electric cars run on energy as well. Even in California this energy is likely to be oil or coal based.
Cheers
Roger
http://www.thedemiseofchristchurch.com
Where does California get its imported natural gas? Just curious.
Better results sometimes to enter such questions in a search engine.
It would be so fun to see their attitude if all imports domestic and international where cut off for a week.
If states like California and New York won’t allow drilling, they should be embargoed from importing fossil fuels.
Seems many share your longing for spite-based economic policies.
I am sure it would go splendidly and end well.
I’ll wager that it would end with drilling in CA and NY.
There is a way to increase California oil production AND make it less carbon-intensive. It’s called #solarEOR and very simply substitutes zero-carbon solar steam for use in EOR (enhanced ouil recovery) instead of the usual steam being produced burning huge amounts of natural gas. 17% of all the gas burned in California to be exact.
Best of all? Solar steam is actually cheaper than burning gas, even before any climate regulation like cap-n-trade or Low Carbon Fuel Standard. So oil companies can actually make money reducing their emissions, and cleaning up the local air quality in places like the SJV.
And for climate impact? Fully implementing solar EOR would equal taking 3 million cars off the road.
Considering the relative energy density of nat gas and solar power, it seems likely that to replace a gigantic amount of nat gas with solar, would take a gigantic amount of solar.
Which, by the way, is intermittent.
So would oil production shutting down at night be cheaper?
Would cloudy days interfering with production be cheaper?
Is it even possible to install massive solar collectors where they need the steam? How much is the land?
They cannot make it economically viable even out in the frickin useless desert, where presumably land costs are minimal.
We are talking about displacing one form of energy (natural gas burned to make steam) with another form (solar thermal to make steam) which produces no emissions. Both are equally large in energy content, but one is clean and cheaper.
Some solar thermal systems have thermal storage and can run 24/7, and cost-competitively. So the intermittancy issue has been solved, and it does not require expensive batteries like storing electricity. Storing heat is quite cheap and simple.
Obviously there will be days without sun. That’s why solar EOR is almost always focused on substituting steam at existing gas-fired steam facilities. So the existing equipment can always run if needed at night and on days with insufficient sun. Again, a simple drop-in hybrid solution.
Certain fields, especially in California, have a lot of equipment and flat free space is at a premium. So solar EOR won’t work everywhere. But the land requirements are reasonable and available in many/most fields.
Not sure if you’re aware of the economics of solar EOR, but good equipment is absolutely competitive with natural gas and produces no emissions. It can produce solar steam for EOR in California at $2.50/mmbtu gas equivalent price on site, today, unsubsidized. Which is fully competitive.
Factor in the 30% solar ITC, and the LCFS credits it earns, plus possible cap-n-trade and local air permits, and the “fuel” price can even go below zero. Yes, below zero. So until / if society weans itself off oil 100%, this is a pretty good deal: save money, cut emissions, clean up the local air quality, create new local solar jobs and economic activity, still keep all the oil jobs and economic activity, and still provide cost-competitive fuel that society requires for a few more decades but with a lower carbon footprint.
If you want to take a deeper dive, just Google “solar EOR myths” and read the first presentation. #solarEOR
https://www.thegwpf.com/cheap-energy-forever-permians-mammoth-cubes-herald-supersized-future-for-shale/
“cheap-energy-forever” – Don’t worry they’re still drilling in Texas.
“The collapse of the oil industry in California, once our second-most-important producing state, is a very sad thing to see.” You’d might think so. Even this Coloradan has had an engineering friend working the Bakersfield area not many years ago. But in truth, I WANT Northern Mexico to secede – the sooner the better!
Sooner or later, California with reach a tipping point where even it’s wonderful weather and geographic diversity won’t keep it from economic collapse. Then they’ll still have the reserves that can be tapped later
Looks like the California public pension system – a “financial time bomb” – could use some oil fueled revenue:
https://www.zerohedge.com/news/2018-02-24/former-calpers-board-members-shocking-admission-calpers-near-insolvency-it-needs