Gov. Newsom Takes Action to Phase Out Oil Extraction in California

SACRAMENTO – Gov. Gavin Newsom April 23, directed the Department of Conservation’s Geologic Energy Management or CalGEM Division to initiate regulatory action to end the issuance of new permits for hydraulic fracturing or fracking, by January 2024. Additionally, Governor Newsom requested that the California Air Resources Board or CARB analyze pathways to phase out oil extraction across the state by no later than 2045.

Under this directive, CalGEM will immediately initiate the rulemaking to halt the issuance of new hydraulic fracturing permits by 2024. 

Under Governor Newsom’s direction, CARB will evaluate how to phase out oil extraction by 2045 through the Climate Change scoping plan, the state’s comprehensive, multi-year regulatory and programmatic plan to achieve required reductions in greenhouse gas emissions. Inclusion of the target in the Scoping Plan means that phasing out oil extraction becomes a part of California’s blueprint to achieve economy-wide carbon neutrality by 2045. CARB will evaluate economic, environmental and health benefits and effects of eliminating oil extraction. CARB’s scoping plan process will be informed by cross-sector collaboration and public input focusing on benefits in disadvantaged communities, opportunities for job creation and economic growth as we achieve carbon neutrality. 

In advance of the phase-out of fracking in 2024, CalGEM’s process for reviewing permits for this practice is the most stringent in the country, and includes input from experts at the Lawrence Livermore National Laboratory. More on the permit review process is available here.

Permit approvals and resulting hydraulic fracturing activity are at the lowest level since the Legislature enacted Senate Bill 4 in 2014 to strengthen regulation of hydraulic fracturing.

In addition to instituting more rigorous review of hydraulic fracturing permit applications, CalGEM continues to operationalize its updated mandate to protect public health and the environment. This includes:

• Developing a new health and safety regulation to protect workers and communities near oil fields.
• Implementing new regulations that prohibit surface expressions and placing a moratorium on high-pressure cyclic steam injection, which has been linked to surface expressions.
• Integrating independent experts from the Lawrence Livermore National Laboratory and the Department of Finance’s Office of State Audits and Evaluations to recommend further improvements to CalGEM’s permitting process.
• Increasing financial bonding requirements on oil companies to ensure adequate closure of defunct wells and clean-up of inactive oil fields.

Earlier this week, the California Environmental Protection Agency announced the release of two independent studies that identify strategies to support the state’s goal to dramatically reduce transportation fossil fuel demand and supply by 2045. The studies analyze the health and safety impacts associated with pollution originating from the extraction and processing of oil and will inform CARB’s scoping plan.

These actions build on the Governor’s September 2020 executive order, which called for an end to fracking and to accelerate California’s transition away from gasoline-powered cars and trucks and reduce demand for fossil fuels. The order also directed agencies to:

• Develop and implement a just transition roadmap.
• Propose strategies to reduce the carbon intensity of transportation fuels beyond 2030 with consideration of the full life cycle of carbon.
• Expedite regulatory processes to repurpose and transition upstream and downstream oil production facilities, while supporting community participation, labor standards and protection of public health, safety and the environment.