California Spars with Federal Government Over Fossil Fuels

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Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

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Summary

The federal government is moving forward with several fossil-fuel related projects in California. The state's governor, however, said the Trump administration is looking for cover from the fallout from the war in the Middle East.

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Feds Propose Offshore Seismic Surveys

Amid state-level backlash against crude oil developments, the U.S. federal government said Tuesday it was in preliminary plans to conduct surveys of the potential off the coast of California.

The Bureau of Ocean Energy Management (BOEM), part of the U.S. Department of the Interior, on Tuesday issued a notice of intent to prepare an environmental impact statement for a proposed update to the offshore Santa Clara facility. The department said it was fast-tracking the process to comply with an emergency declaration made by U.S. President Donald Trump last year in relation to foreign-sourced crude oil.

Platform Gilda, off the coast of California, was installed in 1981. According to BOEM, Gilda had produced 42.6 million barrels of oil and 51.7 billion cubic feet of natural gas as of December 31, 2025.

By the Numbers

• 290,000 BBL/d in refinery output shuttered by closures
• 50,000 BBL/d offshore proposed by federal government

California Says 'No'

The state is pushing back against federal plans for a potential lease sale for drilling rights off the coast of California, however. Governor Gavin Newsom on Friday said he would fight back against the more recent federal efforts to drill offshore.

Last week, the federal government used executive action to justify an order to Sable Offshore Corporation to restart its Santa Ynez pipeline system. Energy Secretary Chris Wright said the restart was necessary to counter state policies that are viewed as obstacles to energy development by the federal government.

"The Trump administration remains committed to putting all Americans and their energy security first," Wright said Friday. "Unfortunately, some state leaders have not adhered to those same principles, with potentially disastrous consequences not just for their residents, but also our national security."

Subscribers can learn more about Santa Ynez from a detailed series of project reports.

Newsom, however, complained that Trump led the country into an unnecessary war in the Middle East, driving up consumer costs by way of a looming energy crisis, and now needs a bailout. In part because of higher state taxes, California typically has the highest retail price for gasoline. At $5.42 per gallon, California gasoline prices are up 20% from month-ago levels as conflict drives up the price of crude oil.

"Donald Trump started a war, admitted it would spike gas prices nationwide, and told Americans it was a small price to pay," the governor said. "Now he's using this crisis of his own making to attempt what he's wanted to do for years: open California's coast for his oil industry friends so they can poison our beaches."

The U.S. Energy Department claims Sable Offshore can produce about 50,000 barrels of oil per day from California's waters. That, the government said, would replace equivalent barrels in foreign imports.

The U.S. Department of Justice said last week that Trump can override California state regulations and law and allow Sable to restart operations off the coast of Santa Barbara. The government used the 1950s-era Defense Production Act, which can speed up U.S. industrial development, as justification.

The facilities were closed in 2015 following a spill of more than 100,000 gallons, including 21,000 gallons that seeped into the Pacific Ocean, affecting 1,500 acres of shoreline and 2,200 acres of marine habitat.

Meanwhile, refineries in California are closing. After receiving its last batch of waterborne crude oil for its Los Angeles Refinery last year, Phillips 66 said it was laying off all but a skeleton crew at the facility earlier this year. Combined with Valero's refineries in Benicia, the state will be down some 290,000 barrels per day (BBL/d) in refining capacity, forcing companies to look outside the state for refined petroleum products.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Project Database can learn more about California's refinery footprint--including capacities, investment values and necessary equipment--from a detailed list of project reports.

Key Takeaways

• California says Trump is pushing for offshore drilling in response to his own decision to attack Iran.
• The Trump administration is using the 1950s-era Defense Production Act as justification.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 250,000 current and future projects worth $30.2 trillion (USD).