Inside Aera
Energy Matters Jan 21, 2020

Oil and gas industry plays a key role in innovation to meet California’s climate goals

Producers like Aera are not only investing today in lowering emissions but looking ahead to make production carbon neutral

By Rock Zierman, CEO of the California Independent Petroleum Association

CIPA’s Rock Zierman

CIPA is a non-profit, non-partisan trade association whose members represent approximately 70% of California’s total oil production.

No industry is better positioned to develop the technologies to meet California’s aggressive climate goals than oil and natural gas producers.

While our member companies, such as Aera, are making investments today in lowering emissions, we are also looking ahead to tomorrow and what we can do to make production carbon neutral or even negative through carbon/methane sequestration and enhancing how renewable natural gas could be incorporated into existing production and pipeline infrastructure.

We are proactively changing our operations to be a part of the solution, but too often policies single us out as though we are the only problem. The continued push to stop California oil production – under the strictest regulations on the planet – undermines the state’s climate goals, will increase our dependence on foreign oil and will drive up costs for consumers.

California is an energy island

In the last two decades, California’s dependence on foreign oil has quintupled. (Graph: California Energy Commission)

In the last two decades, California’s dependence on foreign oil has quintupled. (Graph: California Energy Commission)

Local production plays a key role in the state’s energy security. The more oil we produce here under the toughest regulations on the planet, the less we have to rely upon imported oil.

California is an energy island. All of the oil produced here is used here, but it’s still not enough to meet our state’s vast energy needs.

The Golden State does not benefit from the increased production in other parts of the country like Colorado or North Dakota because there are no interstate pipelines to transport the crude to California. Therefore, the remainder of the state’s supply either comes from Alaska or from foreign imports.

In just two decades, our state’s dependence on foreign oil has quintupled, even though overall demand for fossil fuels has grown. In contrast, 30 years ago California produced about half of what the state consumes.

Saudi Arabia is the state’s largest source of foreign oil supplied to refineries so it makes more sense to have oil produced here under the world’s strictest standards rather than depend on geopolitical forces in countries who do not follow our environmental protections or share our humanitarian values.

Imported oil must be sent to California by tanker ship, which hurts the state’s environmental progress because ports are on track to become Southern California’s largest smog-causing polluter.

Imported oil arrives in California by tanker ships. Ports are on track to become Southern California’s largest smog-causing polluter. (Graph: California Energy Commission)

Regulatory uncertainty impacts the environment

California producers are in 100-percent compliance in meeting the targets of the state’s greenhouse gas-reducing Cap and Trade program. We are adapting to the ever-changing policy landscape, but a bigger problem is regulatory uncertainty. No projects have been approved in several months. As a result, companies sadly had to lay off California workers during the holiday season because the state isn’t reviewing permits.

The demand for energy hasn’t changed – only the source. Instead of creating jobs and revenue here at home, we are exporting wealth overseas with imported oil which ultimately may be more costly for consumers.

Powering California affordably and reliably

Energy reliability and affordability are also essential at a time when California has the nation’s highest poverty rate and Californians faced forced power outages this past fall. Californians currently pay 52% more than the U.S. average for residential electricity rates. According to the California Center on Jobs and the Economy, as of December 2019, California’s residential electricity prices are the seventh highest in the nation.

California motorists also pay more at the pump. In December 2019, California had the highest gasoline price among all continental U.S. states. Californians paid $1.13 per gallon more than the U.S. average for gasoline.

To meet the vast needs of our nation-state, we need a diverse, all-of-the-above energy portfolio that has new and traditional sources working side by side to deliver the affordable and reliable energy all Californians rely upon.

DID YOU KNOW? Aera Energy is a three-time recipient of the Forbes America’s Midsize Employer List, placing ninth in the 2022 ranking and securing its spot in the top ten midsize companies to work for in the United States.

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