California Joins the “We Love OPEC” Alliance
The state of California – once an energy giant, now beset by supply shortages and high costs – has joined the Beyond Oil and Gas Alliance (BOGA), a group of countries and regional governments that have pledged to end oil and natural gas production.
Yet, as Energy in Depth has repeatedly shown, California’s move to restrict the development of their own resources does nothing to shrink its demand for oil, it just shifts the production to other jurisdictions.
This recent move to join BOGA is only a doubling down on this flawed strategy that makes the state even more dependent on foreign oil imports, essentially giving more economic and political power to OPEC countries.
BOGA Countries Aren’t Major Producers
When Denmark and Costa Rica announced BOGA in August, the two nations earned plenty of headlines, but lost in much of that publicity is their lack of actual production. Costa Rica has never produced oil, and while Denmark is the European Union’s largest producer – that’s not saying much, as the BBC notes it only pumped 103,000 barrels in 2019 and “produces much less than non-EU members Norway or the UK.”
In fact, the United Kingdom declined to join the alliance during recent meetings at COP26, and did other major producing countries that dwarf Denmark’s output. For perspective, Texas’ and New Mexico’s Permian Basin alone produced 4.3 million barrels per day in 2019.
Since the launch, more governments have joined BOGA, including France, Greenland, Ireland, Sweden, Wales, and the Canadian province Quebec that recently imposed a fracking ban that could expropriate foreign assets, but as Reuters reported:
“None of the members, which pledge to stop handing out drilling permits and eventually to ban oil and gas production in their territories, has substantial production.”
Moreover, noticeably absent from the BOGA announcements was that none of the countries pledged to phase out the use of oil and natural gas.
It’s one thing to commit to stopping production – when there is none in the first place – but it’s quite another to stop using these fuels when people rely on them to fill up their cars with gasoline and generate electricity to power their homes and businesses.
California Moves Ahead With Undermining Domestic Production
In sharp contrast to its fellow BOGA members, California actually has major production, but has chosen to undermine its own ability to stay energy independent. The Wall Street Journal editorial board reviewed the stats:
“In 1982 California produced 61.4 percent of its oil consumption and imported 5.6 percent. In 2019 29.7 percent of the oil Californians consumed was produced in the state while 58.4 percent was imported—mostly from the Middle East and South America.”
Then in April, Gov. Gavin Newsom announced plans to ban fracking by 2024 and “analyze pathways” to end all oil production by 2045. This will only further increase the state’s reliance on foreign imports:
Even Gov. Newsom understands his own policies make little sense. During a U.S. Climate webinar last year, he said:
“As it relates to managing decline, we’ve got to address the issue of demand. California since 1985, has declined its (oil) production by 60 percent, but only seen a modest decrease in demand, 4.4 percent. And that means we’re making up for a lack of domestic production from Saudi Arabia, Ecuador, and Colombia, and that’s hardly an environmental solution when you look globally.”
The outcomes have been predictable. Californians are paying the highest gasoline prices in the nation, averaging $4.62 per gallon.
The end result has been clearly shown by the Biden administration, which after banning production on federal lands and conveying a negative approach to the industry, resorted to literally begging OPEC to increase production.
That’s the path California is going down by joining BOGA and blocking production within its borders which only gives more power to OPEC and put its energy security future in their hands.
And it’s clear it’s not a winning strategy, as a Forbes headline recently summed up:
“OPEC Says To Biden: If You Want More Oil, Pump It Yourself”