Report makes case for reducing state’s oil production

By Debra Kahn | 02/27/2018 07:22 AM EST

This article was updated.

California could cut a chunk of greenhouse gas emissions by curbing its own oil production, according to a report released today.

Economic modeling suggests that California could achieve reductions on the scale of many of its other climate policies, the Stockholm Environment Institute finds. Overall, cutting oil production by half — 100 million barrels per year — could reduce global emissions by 8 million to 24 million tons of carbon dioxide annually.


California is the third-largest producer of crude oil in the country, although its volumes have been declining about 2 percent per year as fields become depleted. Each lost barrel of oil in California would increase production elsewhere by 0.4 to 0.8 barrel, the study finds, for a net reduction of 0.2 to 0.6 barrel for every barrel left in the ground in California.

The report points out that California’s climate policies include measures to reduce "leakage" of emissions outside the state as a result of in-state reductions. Yet regulators have not accounted for the increased oil consumption outside the state that would be expected from a reduction of in-state demand.

"Limiting oil production provides a means to address leakage associated with reduced oil consumption, and could therefore help fill a hole in California’s existing emission-reduction policies," wrote co-authors Peter Erickson and Michael Lazarus, senior scientists with SEI’s U.S. center.

The report lays out a variety of policies to reduce oil production, including stopping the issuance of new drilling permits, limiting drilling in polluted areas and phasing out the extraction of high-carbon or high-cost oil.

The report estimates the cost of the emissions reductions to be on the order of $110 to $330 per ton of CO2 equivalent — comparable to some reductions achieved through the state’s low-carbon fuel standard.

The study was funded by the Schmidt Family Foundation’s 11th Hour Project.