Soaring gas prices in California prompt new calls to boost state oil production

Soaring gas prices in California has prompted new calls to boost oil production in the state, with Taft Mayor Dave Noerr telling FOX Business that "permits and policy change" is needed to accomplish that goal amid tight global supply as the war between Russia and Ukraine rages on. 

The national average for a gallon of gas was $4.24 on Thursday, slightly lower than the week before and $1.36 higher than the same time last year, according to AAA. 

In California, the average hit a new state record Wednesday at $5.88 per gallon, which lingered into Thursday, according to the association, which noted that the state average is $1.65 higher than the national average.  The average in the state on Thursday was $1.11 less than the month before and $2 lower compared to the same time last year. 

In a live interview with FOX Business’ Kelly O’Grady on "Varney & Co." on Thursday from an oil field in Kern County, which reportedly provides two-thirds of California’s oil supply, Noerr said that the county has updated equipment. 

"Nobody does it better than we do," the oil industry veteran continued as he described the county, which he called "a treasure trove of capabilities and experience when it comes to producing our oil."

Noerr told O’Grady that the county is "ready to do what we do best" and stressed that all that is needed is "support and an opportunity."

AIRLINES SLASH FLIGHTS AMID RISING FUEL, OIL PRICES

As California deals with the country’s highest gas prices, residents in the state could soon get a tax break, free rides on public transit and up to $800 on debit cards to help pay for fuel under a proposal revealed by Gov. Gavin Newsom on Wednesday. 

The average California driver spends about $300 per year on gas taxes, according to the governor’s office. Newsom’s idea, which must be approved by the Legislature, is to give car owners $400 debit cards for up to two vehicles, for a total of $800. The money would go to everyone who has a car registered with the state, including drivers who own vehicles that don’t operate on gas.

Additionally, Newsom wants the state to pay for three months worth of bus and train fare for those who don’t own cars.

"This package is also focused on protecting people from volatile gas prices, and advancing clean transportation," the governor, who is trying to wean the state off fossil fuels, said.

Newsom had previously signed executive orders aimed at prohibiting the sale of new gas-powered cars in the state by 2035 and halting all oil extraction by 2045. 

Sen. Shannon Grove, R-Bakersfield, told the Northern California Record that "since Newsom has been in office, we've actually reduced production by 130,000 barrels a day and imported more from other countries." 

She also reportedly noted that there are more than 1,000 permits gathering dust on the desk of the California Geologic Energy Management Division. 

The Northern California Record reported that division data shows no well stimulation treatment permits have been approved since the first quarter of 2021.

The media outlet noted that Grove asked for the resumption of oil production in the state after President Biden announced the U.S. would ban oil imports from Russia.

Before the ban, California was importing nearly 50,000 barrels of oil a day from Russia in 2021, the San Diego Union-Tribune reported, citing the most recent data available from the U.S. Energy Information Administration.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

When asked by FOX Business if Newsom is heeding the calls to allow for more oil production in his state, a spokesperson for the governor said, "Based on the records, nearly 300 already-issued new drilling permits have not yet been drilled." 

"The state issued 632 total new drill permits in 2021 and 2022 YTD, so that’s 46% of total drilling permits issued that oil companies already have but haven’t yet utilized," the spokesperson, Erin Mellon, continued.  

But Noerr argued that "immediate relief" will be seen at the pump if more oil is allowed to be produced in California. 

"If there is news that we’re going to be able to drill and we’re going to be able to produce more oil and bring it to market, then you will see an immediate relief somewhat, but you can’t turn on oil production like a light switch. It takes a little time," he said. 

According to Aera Energy, one of California's largest oil and gas producers, the state consumes 1.8 million barrels of oil a day, however, only produces 463,000 barrels of oil each day. 

Ticker	Security	Last	Change	Change %
BNO	UNITED STATES BRENT OIL FUND - USD ACC	29.82	+0.25	+0.85%
USO	UNITED STATES OIL FUND - USD ACC	74.25	+1.05	+1.43%

Oil futures on Thursday bounced between gains and losses. 

U.S. West Texas Intermediate futures were down 2% to $112 a barrel on Thursday afternoon. The price rose $5.66 to settle at $114.93 per barrel on Wednesday.

Brent futures were off $2.16, or 1.9%, to $119.40 a barrel.

Both contracts have posted steep gains this week, with WTI climbing over $10 a barrel, or 10%. Brent futures were up more than $14 a barrel, or 13%, since Monday.

CLICK HERE TO READ MORE ON FOX BUSINESS

FOX Business’ Ken Martin and The Associated Press contributed to this report.