Drill, Gavin, drill?

Politico

03-07-2025

With help from Alex Nieves
We'll be off Friday but will be back in your inboxes Monday.
FLARE UP: Gov. Gavin Newsom, the erstwhile fighter of Big Oil, has cracked the door open to more in-state oil extraction — and California oil drillers are hoping to ride the political momentum.
Newsom told reporters this week he was actively reviewing California Energy Commission Vice Chair Siva Gunda's recommendations to keep California's refineries operating profitably after two of them announced plans to close within the past year and triggered a cascade of concerns about fuel supply and prices.
'There's an imperative to move on this,' Newsom said Tuesday, adding he was weighing both legislative and administrative options. 'We're looking to move very quickly on some of those recommendations.'
Among Gunda's recommendations is a call for lawmakers to statutorily approve new wells in Kern County's oilfields, effectively sidestepping litigation from environmental groups that has snarled the county's years-long effort to streamline permitting. Gunda, echoing longstanding industry complaints, pointed to the legal gridlock as slowing the in-state production that some refineries depend on because they're not built to process foreign crude.
The recommendation has energized in-state oil producers, who've seen state permits for new wells plummeting in recent years as part of the Newsom administration's goal to phase out oil production by 2045.
'It's certainly a welcome development,' said Rock Zierman, the CEO of the California Independent Petroleum Association. 'We're now hoping to translate that into action.'
They're also riding high on the Trump administration's agenda: The Bureau of Land Management is currently taking comments on updates to oil and gas leasing programs in south-central California. And the Interior Department killed a 2012 agreement with California's oil regulator over permitting, a largely symbolic move that was still celebrated by California Republicans this week.
Catherine Reheis-Boyd, the president and CEO of the Western States Petroleum Association, said she's heartened by the prospect of more Kern County drilling. 'My hope is that that happens in the short term, not the midterm and not the long term,' she said. 'Otherwise we're going to find ourselves in another very difficult conversation.'
The more than $15 million mailer and ad campaign by in-state oil producers to tie California's climate policies to high gas prices is bearing fruit. Reheis-Boyd said she's had more talks with lawmakers, administration officials and environmental groups in recent months.
One of the 'ground rules' of the talks, Reheis-Boyd said, was that there would be no new drilling near homes or in environmentally sensitive areas. But the environmental and community groups fighting Kern County drilling are unconvinced.
'That is very alarming rhetoric about an in-state turnaround,' said Kassie Siegel, senior counsel and director of the Center for Biological Diversity's Climate Law Institute.
She's kept Kern County's drilling effort in the courts, where it remains even after the Kern County Board of Supervisors approved a revised drilling ordinance last week in an attempt to meet a judge's demands for more mitigation measures.
'I don't believe we're going to have any big increase in production in California,' Siegel said. 'But the question is, how much damage is the industry going to do on its way out the door?'
A spokesperson for Speaker Robert Rivas declined to comment on the record. Senate President Pro Tem Mike McGuire said in an email that state energy officials would brief Democratic senators on the oil recommendations 'soon.'
'The Senate is committed to energy affordability while continuing our nation-leading role combatting the climate crisis,' he said, citing legislative proposals to limit utility costs to ratepayers and overhaul the makeup of transportation fuels. 'We look forward to our continued work with the Assembly and Administration on this critical matter that impacts millions of Californians.'
Meanwhile, Reheis-Boyd is hoping to snag her first meeting with Newsom himself. She's pitched herself for his podcast, she said: 'I'm in line.' — CvK
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MEGA PROBLEM: Trump's 'megabill' has finally cleared Congress, and that means clean energy advocates can start waving goodbye to federal incentives for electric vehicles, solar panels, wind projects and more.
Republicans' budget package — which Trump plans to sign Friday — rolls back large swathes of former President Joe Biden's Inflation Reduction Act, the 2022 law aimed at stimulating domestic clean energy markets.
The new law will eliminate a $7,500 tax credit for EV buyers that automakers had lobbied to protect. (The notable exception being Toyota, which has focused on its hybrid technology.) It will also phase out tax incentives for residential solar and battery storage projects, meaning home energy efficiency upgrades will get more expensive.
Large wind and solar projects are also in a bind. Utility-scale projects can still qualify for tax credits under language negotiated by Senate Republicans, but they'd have to be operational by the end of 2027, a timeline that would leave many projects out in the cold. But hard-line House conservatives said Thursday they'd received assurances from Trump that he would further constrict the incentives.
It's now up to California to pick up the slack. Newsom said last year that he wants to fund EV tax credits with cap-and-trade revenues if federal incentives disappear, but hasn't committed to that proposal as negotiations over extending the emissions trading program heat up. — AN
GLIMMER OF HOPE: California officials got some good news on the EV front Thursday as Trump's Department of Justice declined to immediately appeal an injunction that will restart the flow of federal charging infrastructure to states, David Ferris reports for POLITICO's E&E News.
The fight over the $2.7 billion that states are expecting through the National Electric Vehicle Infrastructure program isn't over. The Federal Highway Administration, which administers the program, said in a statement that it 'still can appeal the preliminary injunction and is currently coordinating its legal strategy with the Department of Justice.'
But the fact it hasn't already means it missed a seven-day appeal window to stop the program from restarting.
Judge Tana Lin ordered the administration last week to restore funding to 14 states that had sued. FHWA froze the program in February, saying that funding would be withheld until it created new rules to replace Biden's. Those rules have still not been published.
California is still earmarked to receive $352 million in NEVI funds. While that figure is small compared to in-state and private resources, the program incentivizes building in less profitable rural areas that charger operators say are more difficult to finance. — AN
CLEAN IT UP: Trump's EPA will have to issue a decision by next July on a plan to clean up Central Valley smog under a tentative legal settlement.
The proposed deal comes after local community groups sued EPA in November, alleging that the agency had missed its statutory deadline to act on a plan developed by San Joaquin Valley air regulators that aims to bring the region into compliance with federal ozone standards, Sean Reilly reports for POLITICO's E&E News.
The Central Valley consistently has among the worst air quality in the nation, linked to factors like the region's topography, agriculture and heavy shipping industries.
Federal and state officials have faced numerous lawsuits over California's air quality plans since the Clean Air Act was enacted in 1971, and could be in store for more after Republicans killed the state's vehicle emissions standards — essentially guaranteeing that it won't meet ozone standards. — AN
LEAVING THE RANCH: John Harris, founder of the Harris Ranch Beef Company and a major Republican donor, died at the age of 81, the Western Growers Association announced Thursday. Harris was one of the most influential figures in the California agriculture community and played a prominent role in backing conservative candidates, including his recent fundraisers for Trump and Vice President J.D. Vance at his Harris Ranch resort in Coalinga.
— The Trump administration's hollowing out of National Park staff could lead to more lost hikers, reservation delays and weather monitoring programs falling by the wayside.
— Voters aren't paying attention to climate, and that's letting Republicans dismantle clean energy projects they support, Sammy Roth writes for the Los Angeles Times.
— Check out the state's harmful algal bloom map as you're planning your lakeside holiday.