California’s fossil fuel phaseout has left it vulnerable to the Iran oil shock The Trump administration and major refiners are using the war to justify restarting oil production and weakening climate rules. This story is free to read because readers choose to support LAist. If you find value in independent local reporting, California has managed a remarkable feat over the past 20 years. Even as its economy has grown to overtake Germany’s as thehas fallen by around two-thirds. This has happened due to some of the world’s most aggressive climate policies, including a tax on carbon emissions and a strict requirement to adopt clean-burning fuels such as “ During the same period, California’s production of crude oil has also fallen by around half, and many oil wells have shut down. The state nowof its crude oil from tanker ships, which is cheaper and more practical because it is separated by steep mountains from oil-producing zones such as Texas. Some of the state’s largest gasoline and diesel refineries are also shutting down amid declining demand, which will make the state dependent on imports of refined gasoline, too. The state’s diminished fossil-fuel sector has made it especially vulnerable to the oil shock of the Israeli-U.S. war with Iran — and to interventions from the Trump administration that could delay or even reverse California’s trend toward renewable energy. Gas prices in the state havein recent weeks, the highest prices in the country. As other economies clamp down on fuel exports, it’s possible the state could face even higher crude prices or a shortage of gasoline.arguing that the federal government can use the Defense Production Act to preempt state law in the event of energy emergencies. The Department of Energy then moved to restart a long-defunct California offshore oil pipeline owned by the company Sable Offshore. The order from Energy Secretary Chris Wright cited “California’s reliance on foreign oil vulnerable to geopolitical disruption,” with “a significant share traveling through the Strait of Hormuz.” The pipelinesince a 2015 oil spill that killed hundreds of animals, and state officials had not given it clearance to reopen. On the very next day, the pipeline reopened. CaliforniaIf you're enjoying this article, you'll love our daily newsletter, The LA Report. Each weekday, catch up on the 5 most pressing stories to start your morning in 3 minutes or less.California has a paid leave program for self-employed workers. But few are using it The state has a program for self-employed workers and small business owners, but workers don’t always know to opt in.For now, the Sable pipeline is ramping up to process around 50,000 barrels a day, which would provide around 3 percent of the state’s daily oil needs. Chevron has already said it will buy and refinefrom the pipeline starting in April. The addition of new supply from Sable could lower costs for refineries, said Mike Umbro, an energy entrepreneur who runs Californians for Energy and Science, an educational nonprofit that advocates for increased oil production. Beyond Sable, though, there aren’t many good options for increasing crude supplies in the short term. “Sacramento’s saying, ‘You don’t have a long-term future here,’ so the companies aren’t going to dump a bunch of money in to increase production,” Umbro said.from another offshore oil company to frack undersea oil wells in order to increase production. The administration has also heldthat would limit drilling near homes and schools, both measures that would open up more onshore oil production in the state. But more upstream oil production won’t help resolve the current fuel crunch. Even as some oil producers consider pumping more crude, no one has suggested building more refineries. In fact, Chevron and other large refinery owners have warned that California’s “cap-and-invest” program — a carbon tax that gets more expensive as time goes on — could soon drive them out of the state. The California Air Resources Board, the state’s climate regulator, is supposed to debut new rules for the carbon tax later this year, which would reduce the amount of free emissions refineries would be allowed to emit and make refineries less likely to stay in California. The oil industry’s argument against these regulations follows the same logic as the Trump administration’s. “Continued erosion of California’s refining capacity risks increased reliance on imported fuels that are slower to arrive, more exposed to global supply disruptions, and less reliable during emergencies or periods of heightened geopolitical risk,” Andy Walz, a senior executive at Chevron, wrote in a letter to state leaders. At the CERAWeek energy conference this week in Texas, Walz said he believes the state could soon have a shortage of gasoline and jet fuel, and that Chevron might close its own refineries within a decade. Those refineries account for 30% of capacity, and losing them could cause huge supply shortages for Bay Area drivers, Central Valley farmers, and Democrats and environmental groups in the state, meanwhile, say that the refiners may be crying wolf about the state’s carbon tax. They see the Iran crisis as more evidence that the state should lean harder into its transition away from oil. Indeed, as Katelyn Roedner Sutter, the California state director for the Environmental Defense Fund, sees it, the current gas spike may only speed up the state’s energy transition by making electric vehicles even more attractive. Governor Gavin Newsom’s latest budget proposed a subsidy for first-time EV buyers, designed to replace the repealed Inflation Reduction Act tax credits, and she said the Iran crisis could strengthen the governor’s case. “I do think the war actually makes it even more important to move forward with this, because I think it just underscores how vulnerable we are, being so dependent on fossil fuels,” she said.Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more atYou come to LAist because you want independent reporting and trustworthy local information. Our newsroom doesn’t answer to shareholders looking to turn a profit. Instead, we answer to you and our connected community. We are free to tell the full truth, to hold power to account without fear or favor, and to follow facts wherever they lead . Our only loyalty is to our audiences and our mission: to inform, engage, and strengthen our community. 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