California Moves Forward with Fracking Ban, Despite Record High Energy Costs

May 25, 2021

When it comes to bad energy policies, odds are that California has either tried it, proposed it, or is it otherwise championing it. So, we can’t say it comes as a huge surprise that state regulators are now seeking to ban fracking and other practices that help make energy cheaper for workers and families. As The Bakersfield Californian reports this week:

California oil regulators have issued a draft rule that would ban fracking and certain other well-stimulation techniques in line with Gov. Gavin Newsom’s declaration one month ago that the controversial practice will halt statewide within three years.

The “discussion draft” released for public review Friday proposes to, by Jan. 1, 2024, phase out permitting of the procedure also known as hydraulic fracturing, as well as related technologies such as acid fracturing and acid-matrix stimulation.

This is yet another short-sighted proposal designed to curry favor with radical environmentalists, but it doesn’t change the basic facts. According to EIA, California is still the second largest consumer of petroleum products in the nation, accounting for 10 percent of all U.S. consumption.

It doesn’t take an economist to know that decreasing the supply of something while it remains in high demand inevitably raises prices. This is exactly what is happening in California, which has some of the highest electricity rates and gas prices in the country.

Power The Future in a recent study on California’s missed energy opportunity found, “If this opportunity is seized, energy reforms that reverse the myriad of costly regulations and tax programs could generate between $14.8 billion and $26.8 billion in annual energy savings, or between $1,147 and $2,077 per household.”

While California’s policymakers don’t seem to understand the importance of affordable energy, their citizens do and $1,147-$2,077 in annual savings is a lot to the average American. Earlier this month, state officials announced that California’s population decreased by 182,000 people in 2020, the first year-over-year population loss ever recorded for the state. This is what happens when government policies make a state too expensive for the working class, and this fracking ban is just more of the same.