California lawmakers pass bill to increase oil production

California lawmakers approved a bill this weekend to allow for the construction of thousands new oil wells in California each year. The goal is to keep fuel prices down for consumers and make oil more affordable for refineries. SB 237 would grant up to 2,000 oil permits per year in Kern County, which is rich in oil, starting January 2026. California oil producers are expected to supply up to 25% of crude oil to the state refinery complex, and reduce the cost of gasoline for consumers in the state.

According to the California Energy Commission, California produced 119,000 barrels of oil per day last year and its producers provided around 23% of the refineries within the state. In the next 12 months, two refineries which account for 17% of California's gasoline capacity will be shut down. California will be even more dependent on fuel imports as a result of these shutdowns. Gas prices are a politically sensitive issue, especially with the Governor (Gavin) Newsom expected to run for President in 2028.

"In response, the administration has implemented a significant policy change aimed at streamlining well approvals and increasing output locally." (Reporting and editing by Nia William in New York, Nicole Jao)

(source: Reuters)