With power grid and energy source reliability at the forefront of California concerns, questions persist about the state’s current efforts at sustaining supply to meet demand.
Even as California continues to have the highest gas prices in the country, a lawsuit filed Sept. 13 in Kern County Superior Court states the Newsom administration has arbitrarily blocked oil and gas development absent legislative authority to do so.
“The Newsom fracking ban threatens the economic vitality of Kern County without creating any substantial environmental benefits; it is a lose-lose policy,” Dr. Wayne Winegarden, PRI senior fellow in business and economics, told the Northern California Record by email.
“The Newsom administration is attempting to throttle, and eventually shut down, one of the most important contributors to the Kern County economy. According to an Economic Impact study, Kern County is the seventh largest oil-producing county in the nation. The sector generates thousands of local jobs and pays wages that are nearly double the region’s average.”
Halting new production will result in substantial job and income losses during economically uncertain times, Winegarden said.
“Making matters worse, as the EPA has noted, the declining trends in greenhouse gas (GHG) emissions is due, in part, to switching from coal to natural gas. Further, given the current state of technologies, a reliable and less-GHG intensive electricity sector requires affordable natural gas,” Winegarden said. “Preventing the safe production of natural gas will lead to higher natural gas prices and ultimately make it harder to establish a reliable less-GHG intensive electricity sector.”
After a bill to ban Well Stimulation Treatment [WST] and other extraction methods died in legislative committee earlier this year, Gov. Gavin Newsom announced a directive to phase out fracking by 2024. State and local lawmakers have criticized the decision.
“Neither the Governor nor CalGEM have authority to unilaterally rewrite the law,” the lawsuit states.
The governor’s office referred a request for comment to the California Department of Conservation (CDOC), where the Geologic Energy Management Division (CalGEM) regulates oil and gas permitting.
Jacob Roper, a CDOC spokesperson, declined to comment on the pending litigation.
“As always, the State is committed to protecting public health, safety and environmental quality and stands by the State Oil and Gas Supervisor’s discretion under statute,” Roper said in an email to the Record.
David Robinson, an attorney representing Kern County in the litigation, said in an email to the Record, “Governor Newsom has overstepped his authority, thus violated the California Constitution. His stated goal is to end all petroleum production in California as soon as possible, even though doing so will put tens of thousands of people out of work, deprive the citizens of Kern County critical funding for schools and fire departments, increase air pollution, increase road and rail congestion, further drive up fuel prices and, in the process, make California 100% dependent on imported oil.”
California’s gas prices are higher than the rest of the country due to a combination of higher state and local sales taxes, production costs for cleaner-burning gasoline blend, environmental program costs, and import costs.
The state’s response to the lawsuit is due to be filed with the court by Oct. 25, Robinson said.
In 2021, CalGEM has denied dozens of fracking permits, including 24 in Kern County in late September.
Meanwhile, the state has sought federal permission to run natural gas power plants without pollution restrictions in order to shore up the state’s tight electricity supplies.
“California has one of the strictest regulatory environments on electricity generation that includes dozens of mandates, taxes, subsidies, and restrictions,” said Winegarden, author of a new study that examines electricity costs and reliability.
“These mandates are often based on political desires rather than physical reality, which has caused state ratepayers to face some of the highest electricity prices in the country while still receiving unreliable service,” Winegarden said. “The need to ask the Biden administration for permission to operate natural gas power plants without pollution restrictions is the expected result of increasing the share of power generated by unreliable power sources. The irony is that, once again, Californians pay a high price while creating questionable (perhaps even negative) environmental consequences.”
Californians pay some of the highest electricity rates in the nation, but they could go higher, the Los Angeles Times reported.
“These impacts are warnings to California’s policy makers should the current policies continue,” Winegarden said. “The state’s electricity sector is on an unsustainable path that will ultimately impose even larger economic costs on families, particularly low-income families.”
More practical strategies are needed, Winegarden said.
“The better way forward requires expansion of nuclear power (the only reliable zero-emission energy source currently available) rather than shutting down Diablo Canyon Power Plant,” Winegarden said. “And increasing the production of natural gas will encourage the national transformation away from coal toward natural gas, which has one-half the emissions of coal; and continue research into alternative technologies (some known, others possibly unknown to us currently) to improve the current reliability/affordability trade-offs.”
A key consideration is the viability of other power sources.
“The current alternative technologies cannot power the California (or U.S.) electricity system,” Winegarden said. “Trying to force these technologies onto the grid will come with large economic and environmental costs. There are also costs associated with the mining of the rare-earth elements these technologies require, shortages of these commodities relative to the demand required to meet current alternative technology mandates, and questionable labor practices that include the use of slave and child labor.”