There Will Be Layoffs

California destroys its oil-and-gas industry

A few days before Thanksgiving, United Furniture sent an untimely message to its staffers.

The company laid off “nearly its entire workforce,” The Daily Beast wailed, “via text and email … while many of them were sleeping,” and “in a heartless parting blow, discontinued the employees’ health-care benefits.”

Yes, 2,700 households in three states will have a rather blue Christmas in 2022. Times are tough in The Land of the Free, and they might get a lot tougher.

But what are the odds that The Daily Beast will cover the “punch to the gut” the tens of thousands of men and women who work for California’s oil-and-gas industry are absorbing?

Barring a dramatic cultural and policy turnaround, hydrocarbon production in the Golden State will soon die. The fatality’s been a long time coming, and fresh actions by local governments and pols in Sacramento will provide a coup de grâce.

First, a look at history. California was already a petroleum powerhouse when Spindletop made Texas a legitimate competitor. In the 1870s, the Pico Canyon Oilfield, which produced black gold until 1990, set off the boom. The Kern River Oil Field was tapped in 1899, and it remains active. (The Ellwood Oil Field was shelled by a Japanese submarine in 1942. Seriously!)

Among the states, in 1981, California ranked third for onshore petroleum production. (Texas and Alaska were first and second.) But the peak arrived in 1985. By 2021, the Golden State stood at No. 7 nationally, bumped downward by New Mexico, North Dakota, Colorado, and Oklahoma. California was once impressive, though not dominant, in natural-gas production. Unsurprisingly, by 2021, it had tumbled out of the top ten list.

California’s multi-decade lurch to the left — high taxes, runaway regulation — played a role in its hydrocarbon industry’s woes. But what’s happened more recently is different. Bigtime. Climate warriors in elective office aren’t trying to make production difficult. They want to kill it.

In mid-2019, “Gov. Gavin Newsom … imposed a de-facto moratorium on hydraulic fracturing,” and two years later, when legislators failed to prohibit the practice in statute, he “directed the Department of Conservation’s Geologic Energy Management … Division to initiate regulatory action to end the issuance of new permits for hydraulic fracturing … by January 2024.” (Kern County’s commissioners were, understandably, livid.)