California Oil Output Continues to Decline Due To Political Opposition and Environmental Regulations
Beverly Hills High School will soon begin to dismantle the iconic oil derrick next to its football field that has pumped crude oil for decades. Statewide, California oil production has been declining since 1986, when production peaked at 1.1 million barrels per day. In 2016, production was less than half that. Over the past 35 years, crude oil throughput at California refineries has remained steady at between 1.6 to 2.0 million barrels per day. Now, however, most of that crude oil is imported and in 2016, crude oil imports from places like Saudi Arabia, Ecuador, and Colombia to California reached nearly 1 million barrels per day.
The decline in in-state production has left California with more recoverable reserves than Alaska. Because crude oil pipelines do not connect California to the rest of the country, the downturn in in-state production must be made up with more expensive imports rather than cheaper oil shale being produced in the United States. This means that California refiners are paying as much as $6 more per barrel for imported oil than refiners in the Midwest and Gulf Coast that use American crude oil. Political opposition and environmental regulations have killed any efforts to revive California’s oil industry.