California’s Energy Problem Is Now a National Security Problem

They broke the gas pumps. That’s how you know something has gone seriously wrong.

If you’ve traveled to another state in the last couple years, you’ve probably seen gas for as little as $2 a gallon. Now, diesel at some Bay Area gas stations is over $10 a gallon and the gas pumps can’t even accommodate that because when they were created, people didn’t anticipate the price could ever go that high.

For years, oil and gas royalty owners and industry advocates have warned that California’s misguided political policies would one day create a serious crisis, and that day is now here. War is again raging in the Middle East, but that in itself is not new. In fact, it is entirely predictable. California could have protected itself from such instability, but Sacramento chose not to.

Now, researchers are sounding the alarm that California’s energy policies have created a national security vulnerability that could threaten U.S. military readiness in the Pacific.

The new study, Addressing U.S. National Security Vulnerabilities Created by California Oil and Refinery Policies: The Need for a Rapid Response Fuel Reserve, was authored by Michael Mische of USC, James Rector of UC Berkeley and Joseph Silvi, a Berkeley graduate and graduate research assistant.

According to the study, more than 61 percent of the crude oil processed by California refineries is imported. California also increasingly depends on foreign refineries for gasoline, diesel and jet fuel. Much of that supply must travel through vulnerable waterways including the Strait of Hormuz, Strait of Malacca, Bab al-Mandeb Strait and Panama Canal.

Meanwhile, California has no inbound crude oil pipeline connecting it to the rest of the country and no direct access to the Strategic Petroleum Reserve on the Gulf Coast. The researchers describe California and much of the surrounding region as essentially a “petroleum island.”

That is especially concerning because California is a major staging area for U.S. military operations in the Pacific. The researchers estimate that a high-intensity Pacific conflict could require about 20 million barrels of fuel in the first month alone.

Their proposed solution is a federally controlled California Rapid Response Fuel Reserve established through presidential use of the Defense Production Act.

A reserve is a good start. The same way a family needs extra money in the bank, a fuel reserve could provide an emergency supply when a war, major earthquake or other crisis disrupts normal supply chains.

But the researchers recognize that a reserve alone is not enough.

Their recommendations also include increasing California oil production, expanding storage, increasing refinery capacity, restoring and expanding pipelines, and distributing fuel reserves near strategically important military installations. They also discuss restarting idled California refineries or developing a new refinery near Las Vegas connected by pipelines to California crude production.

One recommendation is especially important to California’s mineral and royalty owners: the study makes clear that increased production should not be limited to federal lands.

Mineral and royalty owners are ordinary Californians who own the oil and gas rights beneath private property. They include farmers, ranchers, retirees and families who inherited mineral rights from parents and grandparents. When that oil or gas is produced, they receive royalty income from their property.

I work with these families through the National Association of Royalty Owners – California, or NARO-CA, which advocates for California mineral and royalty owners.

The authors write: “Developing all of California’s crude oil reserves, including those located outside of federal lands, could enable California’s oil production to exceed 1.1 million barrels per day within several years.”

NARO-CA has raised the same concern with federal policymakers. In an August letter to members of Congress and national energy officials, we warned against opening federal lands for production while private mineral owners remain blocked by state and local restrictions. Federal energy policy should not leave private property owners behind.

That is a remarkable contrast with the direction California has been heading.

California was once one of America’s top three oil producers. Our pipelines are aging, our refineries are leaving and modernization, expansion and construction of new facilities are blocked by anti-oil regulation.

The study also discusses increased production from the Central Coast, restoration and expansion of pipeline infrastructure and bringing the Santa Maria refining system back into use.

Meanwhile, Santa Barbara County leaders are proposing the exact opposite with an oil ban that royalty owners are fighting as a violation of constitutionally protected property rights. Santa Barbara is not alone. The City of Los Angeles is also considering an Oil and Gas Phaseout Ordinance that would further restrict existing production.

When we import fuel from out of state or across the world, we make ourselves vulnerable to supply disruptions caused by wars and natural disasters. We also send money overseas to countries that may not share our values and do not produce energy under California’s strict environmental standards.

We’re often told to “shop local.” The same should apply to energy.

For mineral and royalty owners, the issue is also deeply personal. Mineral rights cannot simply be moved somewhere else. A farmer whose mineral rights are located in Santa Barbara County cannot pack them into a truck and move them to Texas because California government decides it no longer wants oil production.

The oil is where the oil is.

The new study should serve as a wake-up call. The President should seriously consider its recommendations, Congress should examine what additional action is needed, and California policymakers should reconsider policies that continue weakening our own energy infrastructure.

Nobody knows where the next international crisis will begin. But we know there will be another one.

Energy security means making sure the next crisis somewhere else does not become an energy crisis here at home.