John Moore via Unsplash
Sacramento’s War on Water and Energy

Edward Ring

Director, Water and Energy Policy

Edward Ring
April 3, 2024

Sacramento’s War on Water and Energy

After the deluges of 2022-23, and the rainfall season so far this year delivering an above normal snowpack and above normal rain, the drought in California is over. Even the situation on the dry Colorado is much improved, with Lake Powell and Lake Mead collectively at 42 percent of capacity, up from only 32 percent of capacity at this time last year.

The reservoirs are full, and there’s snow in the mountains, but California’s farmers are still getting squeezed. The federal allocation to farmers in California’s vast Central Valley is held to 35 percent of the contracted amount, and the state water project allocation is only at 30 percent. As a result, millions of acres of farmland are going to remain fallow this year.

California has historically delivered 50 percent of the total fruit and vegetables produced in the entire country. But consumers in California are increasingly finding imported food products in their grocery store aisles, including produce easily grown here: avocados from Mexico, apricots and grapes from Chile. In 2020, imports of agricultural products into California reached nearly $10 billion, against exports of $13.4 billion.

While California so far can at least claim to be a net food exporter, it lost self-sufficiency in energy decades ago. Despite impressive reserves of natural gas and crude oil, California imports 74 percent of its crude oil and over 90 percent of its natural gas. California’s annual in-state production of crude oil is less than one-third what it was in 1985.

It isn’t as if we don’t need this fuel. After decades of exhausting attempts to push renewables, in 2021 according to the US EIA the state still derives 45 percent of its energy from petroleum products and another 31 percent from natural gas. Those percentages would be even higher, but included in the denominator is another 9 percent of total energy consumption represented by electricity imported from other states.

With agriculture, Sacramento’s indifference to the plight of farmers can be explained economically. “Agriculture, Forestry, Fishing and Hunting” represents a paltry 1.5 percent of California’s $3.0 trillion GDP. Not a ton of clout there, and that explains a lot.

The same argument can made for oil and gas. According to an authoritative 2019 report from the Los Angeles County Economic Development Corporation, the oil and gas industry in California “generated $152.3 billion in total economic output, making up 2.1 percent of California’s overall gross state product in 2017.”

Numbers matter. Farming and logging, 1.5 percent of GDP. Oil and gas, 2.1 percent of GDP. Who cares?

This is the economic context in which to view the latest legislative and regulatory assaults on farming and fossil fuel. These industries are dwarfed in size by such heavyweights as information technology at 10.5 percent of state GDP, government at 11.6 percent, “professional services” at 14.2 percent, and the almighty financial sector at 19 percent. The attacks are unrelenting, because in California, “big ag” and “big oil” are actually not so big at all. They’re getting bullied into oblivion.

In February California’s oil and gas regulators released their plan to ban all fracking, after already having banned issuance of new fracking permits. And then in March environmental groups began pressing CalGEM (California’s state “Geologic Energy Management Division”) to also ban what is known as steam injection, another method of oil extraction that is widely used in California.

Now if wishes were megawatts, and dreams could fuel our vehicles, there would be no consequences as California’s remaining active oil wells are capped, and its natural gas power plants are decommissioned. We can continue importing solar cells and wind turbines from China, and to the extent we still require that filthy fossil fuel, we can continue to let nations in the Middle East and South America ship it to us in tankers that in 2023 spewed an estimated 1.7 million metric tons of CO2 into the atmosphere just getting it to our shores.

Ditto for those apricots and avocados. We can export cell phone apps, movies, and “services,” and let those less finicky foreigners get their fingernails dirty growing food, extracting energy, manufacturing actual things. But California’s legislators, regulators, and smug litigators may hope there is never again a global hiccough that disrupts the imports of those necessities we are too “developed” to produce ourselves. Because you can’t eat software apps, and you can’t drink movies.

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