Starving The Grid In Spite Of The Citizens
As I write this my area of Southern California is under an extreme heat warning. We are told by the well meaning public officials and newscasters to draw the drapes, turn off the air conditioning, and do not run large appliances like a clothes washer or to charge the EV in the garage. All this to protect the power grid from failing. Failing? California is rich in natural resources, so how could this be? A big reason is that California is working hard to get rid of power generation and energy development in the state.
A recent article from Doomberg, “Bay Watch”, https://newsletter.doomberg.com/p/bay-watch, highlights the looming crisis in California’s energy sector, a crisis illustrated by Chevron’s relocation to Texas and growing regulatory hostility toward oil and gas. As California is pushed to adopt renewable energy, the electricity grid faces significant risks from an over reliance on a few aging refineries and specialized fuel blends. The California Energy Commission (CEC) warns that any disruption in refinery operations could lead to severe fuel shortages and price spikes, threatening the stability of the state’s electricity supply and broader economic health.
Chevron’s exit marks a symbolic shift in California’s energy landscape, reflecting broader concerns about the state’s reliance on foreign imports and inadequate local production. Chevron began as the California Star Oil Works in 1876, eventually becoming Standard Oil Company of California (Socal). San Francisco was chosen as the headquarters for Socal because of its proximity to trade and shipping routes and its financial connections. Today Chevron is the second largest oil company based in the US, and it has taken roughly 2,000 jobs away from California.
The article points out the unique challenges California faces due to its isolated fuel market, including the lack of interstate pipelines and the dependence on CARBOB, a specialized gasoline blend that few refineries produce. The state’s aging refineries, especially Chevron’s Richmond facility, are vital to maintaining fuel supplies, yet they are under constant threat from both seismic activity and unfavorable political pressures. The lack of investment in upgrading and expanding in-state power generation is surprising in the extreme in light of the exploding population. Given the business climate, it is no surprise at all.
Governor Newsom’s policies seem to exacerbate the situation by increasing regulations and taxes, rather than addressing the vulnerabilities in the energy infrastructure and the needs of his constituents, the citizens of California. The article paints a grim picture of the future, where California’s refusal to support its existing energy infrastructure could leave residents facing high costs, unreliable electricity, and possible fuel shortages.
This raises the question of whether private operation of refineries in California can continue. The State has entertained proposals, such as a potential government takeover of refineries, that may only deepen the crisis. It seems likely that California, like Mongolia, will become utterly dependent on foreign sources for the largest part of its energy needs.
California’s push toward renewable energy, while noble in intent, could result in serious economic and energy consequences if not carefully managed.
The article is quite informative and worth your time to read.
References
Doomberg, Bay Watch https://newsletter.doomberg.com/p/bay-watch/
