BAKERSFIELD, Calif. (KERO) \u2014 California\u2019s oil industry is preparing for a potential rebound as new permitting changes give Kern County more control over local drilling. Industry leaders say the shift could help bring back hundreds of jobs and boost local production, but they warn that the state\u2019s shrinking number of oil refineries still poses major challenges.<\/p>\n
California Independent Petroleum Association CEO Rock Zierman said the state currently has eight operational refineries producing gasoline, diesel and jet fuel. But two are set to close \u2014 including Phillips 66\u2019s Los Angeles-area refinery, which is scheduled to begin shutting down this month, and Valero\u2019s Benicia refinery, which is also preparing to cease operations. Together, the two facilities account for roughly 20% of California\u2019s gasoline supply.<\/p>\n
\u201cWe used to have over 40 in the 1980s,\u201d Zierman said. \u201cSo as you become dependent on fewer and fewer refineries, that means importing refined fuel.\u201d<\/p>\n
The remarks came following a Bakersfield oil summit attended by more than 100 local oil producers, county officials and state regulators. Zierman said the meeting focused on how to restart production as Kern County prepares to take over permitting authority from the state \u2014 a transition he called \u201cyears in the making.\u201d<\/p>\n
\u201cWe really honed in on all of the issues that we face to get production online,\u201d he said. \u201cAnd I think they\u2019re a very willing partner right now to make that happen.\u201d<\/p>\n
Even with local control, Zierman said California\u2019s refineries remain a major bottleneck in the state\u2019s energy chain.<\/p>\n
\u201cWe have to get our product to market,\u201d he said. \u201cSo we need the permit, we got to produce the oil. But once it\u2019s produced, our only customers are California-based refineries \u2014 and they, unfortunately, have been closing.\u201d<\/p>\n
Zierman said increasing local production could help lower costs and keep more dollars in Kern County, where more than 80% of California\u2019s oil is already produced.<\/p>\n
\u201cForeign imports are typically $5 to $7 more per barrel than local production,\u201d he said. \u201cSo the refineries want to have local production \u2014 and that helps keep gasoline prices down.\u201d<\/p>\n
He also argued that California\u2019s oil producers follow some of the strictest environmental regulations in the world, making local drilling a cleaner alternative to importing fuel.<\/p>\n
\u201cWhen we produce crude locally, we abide by all the rules and regulations,\u201d Zierman said. \u201cAnd we do it much more environmentally friendly.\u201d<\/p>\n
Zierman emphasized that for the industry to stabilize, California\u2019s remaining refineries will need long-term certainty from the state to continue operating. Without it, he warned, the state could see more closures, increased reliance on foreign oil, and even higher gas prices for consumers.<\/p>\n
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