Incentives matter. When you place excessive taxes, regulations, and costs on an individual or a company, making it difficult, if not impossible, to do business in a state, those individuals or companies will leave.
That's what's been happening in California. The productive have been leaving California in droves, not the least among them energy providers. Now, California is changing its green energy tune, trying to keep oil and gas companies from leaving by fast-tracking drilling permits.
Following 25 years of what oil and gas executives categorize as hostility to the industry, the state is now making a play to keep those companies from leaving.
Concerned with the exodus of oil and gas companies, refinery closures, and the expensive price of gasoline in the state, California Gov. Gavin Newsom signed legislation last week that fast tracks the approval of 2,000 new wells per year over the next 10 years in Kern County, a significant oil-producing region.
If this isn't a sterling example of "too little, too late," then there's no such beast. This goes well beyond the energy sector, of course. California's home prices, which are approximately at geosynchronous orbit right now, are a major problem. So are their nation's highest gas prices, their punitive taxes, the rampant crime in the major cities, and the endemic homeless enclaves. What's really amazing is that anyone remains in California at all.
One oil company executive puts it in no uncertain terms.
Andy Walz, Chevron's president of Americas products, said during an appearance on FOX Business, "I think it's been a tyranny of about 25 years to get the refining business to leave California."
Walz told reporters last summer about Chevron's move from California to Texas, saying the company has "been doing that because California is a tough place to do business."
"It's a tough place to recruit people," he said. "It's a tough place to move employees – a lot of our employees move up through the company, they gain experience in different geographies, different locations, and we have a lot of people who will not move to California. That makes it difficult."
How are those solar panels and windmills working out for you now, Governor Newsom?
Read More: Drill, California — Drill!
Tank Full? CA Gas Prices May Hit A Devastating $10 - Thanks, Gavin Newsom!
Refining capacity is a major problem for California. In 1983, during President Reagan's first term, during the governorship of Democrat Jerry Brown and the Republican George Deukmejian, California had 40 refineries. Now there are 13, and after Valero and Phillips 66 go through the planned shutdowns, there will be 11. In 1983, there were 25.3 million people in California. Now there are over 39 million, as of 2022.
In other words, California's energy policy has been like a dumpster fire inside a larger dumpster fire on a train that is being wrecked by driving it into an anvil factory. It's small wonder that the productive people of California are fleeing for greener pastures.
As for the oil companies, if I could give them any advice, it would be "don't trust California." Even if we assume the impossible and Governor Gavin "A Little Dab'll Do Ya" Newsom is serious about enticing the oil companies to operate in California, the next lunatic governor that state elects will likely just return to business as usual.
Might I point out an alternative? Alaska is opening for business.
Editor’s Note: Help us continue to report the truth about corrupt politicians like Governor Gavin "A Little Dab'll Do Ya" Newsom.
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