Politicians are killing California's oil industry - what happens next?
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California is moving to ban fracking and restrict oil and gas development throughout the state. Some fear the oil industry in California will be killed by regulation. California is a major producer of oil and natural gas, being the fourth most productive state, accounting for about 10% of national production.
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Bellwether: what happens in California will eventually happen across the nation.
LOS ANGELES, CA (California Network) - A California plan to end the state's dependence on fossil fuels by 2045 is generating a lot of heat. California produces about 10 percent of the oil and gas in the United States. The state is also home to some of the toughest environmental regulations.
The plan to end fossil fuel development and use in California is being spearheaded by the state's governor, Gavin Newsom, a Democrat. The state is solidly blue, with only a few conservative districts, mostly relegated to the central valley and northern, mountain districts. This is why California is such a progressive state, with high taxes hand-in-hand with its policies.
Gov. Newsom placed a moratorium on new oil wells that use high-pressure steam. Future projects must now be reviewed by scientists at Lawrence Livermore National Laboratory. Updated regulations are coming this year.
These regulations are only a step towards and eventual end to oil and gas production in the state.
The upside of these changes includes cleaner air and water. California is home to the most polluted air in the nation. Cities such as Los Angeles are sprawling and lack sufficient mass transit options. Los Angeles has a small subway system and a light rail train system, but these do not suffice for the tens of millions of commuters who live across the city and its massive suburbs.
California also has the highest gas prices in the nation, since it requires a special blend of fuel in the summer to reduce pollution.
The elimination of fossil fuel dependency would make California a cleaner place to live. But it would also mean the end of millions of jobs. And there seems to be no plan to replace these jobs with new industries. At least, no coherent plan has been proposed.
Cities such as Bakersfield in the southern San Joaquin Valley will suffer greatly if the oil industry is stifled. In fact, thousands of workers are already feeling the effects of an uncertain future. Several firms are cutting back production and development which mean a loss of jobs and income for tens of thousands.
The fact is, change is coming. It will take place slowly, over decades, but it will come and it will leave millions of people behind. This is what happens when economic revolutions occur.
Revolutions are coming in energy, agriculture, and a host of other industries such as healthcare. Energy production is moving towards renewable sources, agriculture is moving towards vertical farming, while lab-grown meat is almost ready for public debut. Healthcare will be socialized at some point, even if not in the current political cycle.
These changes mean millions of Americans, including tens of millions in California, will lose their current jobs. And there is little that can be done. Between the political climate and the eventual shift in business, the handwriting is on the wall.
The problem is California is not investing in plans to help people transition. There appears to be no pre-positioning happening at all. Instead, it seems the current political apparatus in Sacramento plans to dump people off work and onto the unemployment rolls. What industry will replace oil?
There are plenty of options, but state action is lacking. And while it can be argued this isn't the state's job, the state is already making itself an actor in the market by killing off an industry. The least it can do is take steps to facilitate its replacement.
One last point. As goes California, so goes the nation. This is an early warning for the rest of the nation. California is a bellwether, and the problems emerging in the Golden State will eventually spread to others. Now is the time to make new plans.
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