California is becoming an oil island
Southern California may want to go green but we're still guzzling up a lot of oil. The problem is, we're producing only a fraction of the oil we used to.
Southern California is famous for always pushing to go green, green, green. But for all our environmental enthusiasm, we're still consuming a whole lot of oil.
While you may see plenty of those oil rigs bobbing up and down all over the place, we're simply not producing enough oil to match our current needs.
How much oil do we use?
California uses more gas than any other state in the country. "It's bigger than a country the size of Russia," said Laura Blewitt, oil reporter for Bloomberg. "So there's about a million barrels a day of gasoline consumption in California, alone."
derrick towering over Beverly Hills High School, right behind the bleachers. But it's coming down soon, a sign of waning interest in pumping crude in the Golden State.
— BBG Energy News (@BloombergNRG)
There's an #oil derrick towering over Beverly Hills High School, right behind the bleachers. But it's coming down soon, a sign of waning interest in pumping crude in the Golden State. https://t.co/t94x0fV2L2 By @roberttuttle @laurablewitt pic.twitter.com/6m4YxECX2r— Bloomberg Energy (@BloombergNRG) April 26, 2018
How much oil do we produce?
California is producing a lot less oil than in the early 1980's. "Back then, there was about one million barrels a day being produced," said Blewitt. "Now it's about half that."
The Golden State's pre-existing wells are simply running out of their reserves. For example, the famously flowered oil derrick atop Beverly Hills High School has already pumped about 90 percent out of its stock out of the ground. It will be plugged and dismantled over the next year.
And environmental concerns have halted the drilling of new wells, be they on land or offshore. "California is sitting on one of the largest reserves in the world," said Blewitt. "So, it's there. California producers just aren't able to get to it at this point."
Where does our oil come from?
On top of pumping out our own oil, California used to import a lot from Alaska. But with Alaska's oil production meets the same challenges as California, the state has turned to foreign sources. "More than half the oil that California is refining is coming from overseas. It's coming from as far away as Saudi Arabia."
Laws limiting how oil can be transported, combined with a lack of infrastructure to move oil from nearby states leaves California with few options to feed our hunger for oil.
Why is California oil so expensive?
California gas prices are higher than any other state in the U.S. Simply put, it costs more to bring oil to us, than it does to produce it ourselves.
Blewitt and her colleagues at Bloomberg assessed the price disparity between importing oil from within the U.S. versus from overseas. "The oil imports are about six dollars a barrel higher," said Blewitt. "So if you look at the price of Texas oil, it's nearing 70 dollar a barrel. So, instead of getting that 70 dollars a barrel, California is paying $76."
Until Southern California is able to truly curb its oil consumption, drivers will have to keep ponying up at the pump.