On September 23rd, California Governor Gavin Newsom released new initiatives to eliminate oil fracking permits by 2024. Oil fracking is the process by which oil is extracted from the ground through the use of high pressure liquids that fracture small pieces of shale. This technique has long been controversial due to its potential effects on the environment: fracking uses a substantial amount of water and may release toxic chemicals into the atmosphere. Due to California’s water shortage, environmentalists have pushed to eliminate the practice from California. 

Governor Newsome stated “California’s policies have contributed to an ongoing reduction in in-state oil extraction, which has declined by over 60 percent since 1985, but demand for oil has not correspondingly declined over the same period of time…clean renewable fuels play a role as California transitions to a decarbonized transportation sector.”

This comes months after Chevron, a leader in the production of oil, spilled over 265,000 gallons of oil into a creek at a well site in Kern County, California. State legislators had to issue an order to Chevron to stop the spill. Chevron reportedly did not follow the state’s ban on steam injections that produce surface expressions. 

Chevron is just one of many companies pursuing fracking techniques in California. In July, the state noticed a sizable increase in approved permits. According to Ann O’Leary, these permits were not approved by Governor Newsom. This prompted Newsom to fire the head of the Division of Oil, Gas, and Geothermal Resources. An investigation into the division employees’ stock holdings revealed that seven employees held equity in major oil producers. The Governor’s chief of staff, Ann O’Leary, told the Secretary of Natural Resources to pursue “the maximum disciplinary action appropriate by Law.” Watch groups had been keen to see the results of the investigations as many suspected conflicts of interest. 

Governor Newsom’s new initiatives would look to ban new fracking permits altogether, a move that many experts deem economically irresponsible. CIPA  California’s Independent Petroleum Association stated that the ban on fracking would slow the economic recovery from Covid, even if the ban is still three years out. The CEO of CIPA, Rock Zierman, noted that thousands of jobs will be lost and energy costs will rise as oil becomes more scarce. As imports of oil continue to surpass 1 million barrels per day, Zierman believes domestic production should not be decreased further. “We should be supporting American workers, not the Saudi royal family,” Zierman said. 

Lawmakers were divided over the Governor’s executive order, Blanca Rubio (D-Baldwin Park) said, “They’re not just jobs, they’re good paying, middle-class, union jobs that will be lost.” Rubio questioned where these workers will find jobs if the ban on fracking were permitted. Cristina Garcia (D-Bell Gardens), found the executive order to be more words than action, “I’ve seen bills that do way less related to oil die in the legislature.” 

Some of the state’s largest oil producers saw a sharp fall in stock prices following the news. California Resource Corporation, the largest oil producer, dropped 32%. Berry Petroleum lost as much as 25% on the news; the company released a statement informing stakeholders this will not affect their performance year to date but may have potential effects in the future. Berry Petroleum echoed the sentiments of CIPA: “This moratorium is not the most effective way to manage the industry,” the benefit will be seen in “countries that export oil to California such as OPEC countries, which have poor social justice and environmental records, pay no California taxes and don’t employ our citizens.”