California’s Energy Policies Linked to Rising Gas Prices and Declining Oil Production

SACRAMENTO, Calif. — November 24, 2025 — California is experiencing some of the highest gas and electricity prices in the United States amid energy policies implemented under Governor Gavin Newsom, officials and reports indicate. Since 2018, more than 360 energy companies have left the state, and new oil drilling permits have dropped by 95% since Newsom took office in 2019, according to state data.

These developments have contributed to a reduction in California’s oil production by nearly 128,000 barrels per day over the past five years, despite the state holding the fifth-largest petroleum reserves in the country. The decline in domestic production has increased California’s reliance on foreign oil, with imports now accounting for over 60% of the state’s crude supply, a significant rise from less than 6% in 1982. Brazil and Iraq are notable sources, providing 20% and 21% of imported crude oil, respectively.

California’s refining capacity is also under strain. Projections indicate that by early 2026, the state could lose nearly 20% of its remaining refining capacity. This reduction threatens to cause blackouts, fuel shortages, and price spikes not only within California but also across the West Coast, which depends on the state’s energy supply.

The viability of California’s pipeline infrastructure is at risk as well. Most pipelines require a minimum throughput of 90,000 barrels per day to remain operational, but current production levels hover around 50,000 barrels per day. This shortfall has resulted in monthly losses of approximately $2 million for pipeline operators. Crimson Midstream, which operates the state’s largest crude oil pipeline network, faces potential shutdown of the San Pablo Bay Pipeline in the coming year due to these operational challenges.

Officials warn that these conditions could further destabilize California’s energy supply chain and jeopardize refinery capacity already under pressure. The combination of regulatory measures and declining domestic production has created a shortage of fuel, leading to increased gasoline imports and higher prices at the pump for consumers.

Governor Newsom has promoted his energy agenda internationally, including during a recent trip to Brazil, but the state continues to grapple with the consequences of its energy policies. The situation has raised concerns about the broader implications for national security and the stability of energy supplies in the western United States.