Tensions are running high after Iran shot down an unarmed U.S. drone in the Strait of Hormuz between the Persian Gulf and the Gulf of Oman. The Strait of Hormuz is critically important to the world as one of the most important choke points for oil transport. A country controlling the Strait of Hormuz could stop much of the flow of oil out of the Middle East, causing shock waves to the global economy.
Why, given the surge of oil production in the U.S., are we so concerned about the flow of oil through the Strait of Hormuz? It may surprise many that California is a big reason.
California’s War on Oil
California is well-known for its progressive policies. The state has waged an aggressive campaign to move away from fossil fuels. One of the consequences of this campaign has been a steady decline in California’s oil production.
As I pointed out in a recent article, 100 years ago California was the top oil producer in the U.S., responsible at one point for nearly 40% of U.S. oil production. But California’s oil production has been in decline for many years, with the state totally missing out on the shale oil boom that has boosted oil production across the U.S.
There are some geological reasons for this, but there is also staunch opposition to drilling for oil in California. The net result is that California’s oil production continues its long decline.
The Law of Unintended Consequences
But why do we care? After all, there’s nothing wrong with drilling less as long as California is cutting its consumption. Except it isn’t. Despite an aggressive campaign toward electrifying California’s infrastructure, petroleum use in the state has increased.