When Joe Biden assumed office in 2021, the progressive press hoped, as the LA Times crowed, that he would “turn America into California again”. To the great loss of America, the West and, of course, Californians, he is living up to this credo in spectacular fashion.
California’s last two large oil producers, ExxonMobil and Chevron, this week announced a combined $5 billion in write-offs of their assets in the state.
The Golden State once boasted a giant fossil fuel industry, but climate hysteria has been the state religion for almost two decades. Not long ago, California was home to a host of top 10 energy firms — in 1970 ARCO, Getty Oil, Union Oil, Oxy and Chevron constituted the five largest industrial companies in the state. Now only Chevron, which has been reducing its headcount in northern California and is clearly shifting its emphasis to Texas, remains.
This predicament can’t be blamed on California running out of oil and gas; some estimates of the state’s oil and gas reserves are considerably larger than those of Texas. Monterey shale, located under the state’s economically struggling midsection, holds almost two-thirds of the nation’s total supply of shale oil. Tapping this source, one USC study notes, could bring as many as 500,000 new jobs to the state in a matter of years.
But such palatable returns do not mean much to the state’s powerful environmental lobby. California regulations have managed to cut production by more than half in less than 30 years. In the Golden State, this ban threatens to eliminate an industry that, according to a 2019 report from the Los Angeles Economic Development Corporation, amounted to 152,000 direct jobs, as well as an additional 213,000 related jobs. Nearly half those jobs comprise black, Asian, or Latino workers.
California reflects the kind of mindset that has captured the Biden administration. Just two years ago the bond firm Pimco predicted that America was about to seize “energy dominance”. But White House officials are so soaked in green ideology that they have abandoned the basic logic of geopolitics, according to which energy is power. Take Biden’s decision to halt permitting new LNG ports as the latest example. The likely result won’t be so great for the planet, given that cutting off natural gas may accelerate the use of far dirtier coal, which is already happening in energy-starved Germany. The real long-term winners will not be Gaia but instead countries such as Russia, Iran and Qatar — the new natural gas hegemons.
Nor is this move a political winner. Most Americans favour, by a wide margin, the “drill baby drill” approach over Net Zero and the energy austerity being pushed by jet-setting oligarchs. One recent poll of swing state voters suggests that only 3% consider climate a key issue, far behind concerns such as the economy, crime, and immigration.
The assault on fossil fuels has left California almost totally dependent on its tech sector, particularly new IPOs. This has not proved to be a viable strategy. The Golden State now lags behind virtually every US state in terms of unemployment, while possessing the nation’s highest rates of unemployment, the highest percent living poverty, massive net outmigration and a gargantuan $68 billion budget deficit.
Also in trouble are America’s historic allies. When Russia invaded Ukraine, Europe was promised liquified natural gas by Biden; now those projects have since been cancelled. Instead, our “friends” like Germany have been left to face higher energy prices and accelerating deindustrialisation. At some point they will have to turn to regimes such as Qatar and Iran, or even start up again with Russia.
America’s European and East Asian allies long embraced Biden as a far superior choice to the odious Trump, but those allies who once welcomed his accession may now be growing to regret it. California is just the start.