Gas prices will continue to explode in California unless Governor Gavin Newsom can “incentivize” producers to ramp up in-state production, warns oil executive Pat McDonald warned
“You could see $10 diesels and $8.50 gasoline,” McDonald, CEO of Carbon Energy Corporation, which operates some of the oldest oil wells in the state, told The California Post.
With the state’s dependency on foreign oil and no clear timeline on when the Strait of Hormuz will reopen, McDonald said the “clock is ticking” to take action and called on Newsom to sign an executive order to ease regulations that have stifled industry growth.
“The Governor can make executive orders to do as much as he can in the near term, crisis management, but then the state legislature needs to recognize that these policies that they’ve enacted are hurting the citizens of California,” he told The Post.
The average price at the pump in the Golden State is $6.16, while the national average is $4.50 according to data from AAA.
While Newsom has repeatedly blamed President Donald Trump and the war in Iran for the surging cost to fill up the tank, California hasn’t had gas prices lower than $4 for the past five years, according to Gas Buddy.
The last ship to pass through the Strait of Hormuz carrying foreign oil arrived over the weekend in California, a state that sources roughly 30% of its foreign crude oil from the Persian Gulf.
Hundreds of ships remain stranded, as Trump paused “Project Freedom” and guiding vessels safely though the region as he looks to strike a deal with Iran.
California’s dependency on foreign oil and the significant decline from refineries and in-state production over tax and regulatory policies has resulted in “pretty significant and dire news for policymakers,” said McDonald.
The oil executive said he isn’t asking for the regulations — like SB 1137, which banned new oil and gas wells within 3,200 feet of sensitive receptors like homes, schools and hospitals — to be thrown out, rather loosened to help build back the industry and significantly raise production.
“Just making them easier to abide by and not be so destructive and restrictive, then I think the longer term response from the industry — nine months out to a year — you will see a significant increase in state oil and gas production from the California based producers,” McDonald said, adding that just relaxing SB 1137 would increase his production by 30 to 40%.
McDonald told The Post he is aware of other oil and gas companies that are in a similar position, and could go “instantly on” for a number of projects if regulations permitted.
“Capital flows toward certainty and that’s how we need to approach this, give us all confidence that we can invest our capital and not be subject to random regulations that frankly are not always in touch with reality,” he said.
