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** Trump vs. Newsom: California’s Tightrope on Energy and Environment
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Dear John,

With national election results that have delivered a surprisingly unequivocal result, California’s business interests now find themselves on a political tightrope. On one side, the incoming Trump administration will pursue deregulation that may help businesses remain in California, and on the other side, the Newsom administration is going to do everything in its power to stop them.

For Californians, the divide between Newsom and Trump couldn’t be more clear, and who wins the battle on environmental and energy policy will impact the cost and standard of living for Californians for years to come.

As CalMatters explains ([link removed]) , “California’s massive water projects, its authority to clean its air, federal support for offshore wind and disaster aid for wildfires all depend on cooperation with the new Trump administration.”

Let’s take a look at some straightforward facts that show how California’s current regulatory environment puts unrealistic expectations on industry, and sets unrealistic environmental goals that, in many cases, are unhelpful or even counterproductive — and where Trump vs. Newsom stand on each issue.

1. Natural Gas

Newsom:
Newsom has cast himself as a global leader in the fight against climate change. To help reach “net-zero” carbon emissions, the California Air Resources Board (CARB) released a new rule with the goal of generating 500,000 gigawatt-hours ([link removed]) of electricity per year by 2045 to reduce California’s reliance on fossil fuels. Newsom’s quixotic approach seeks to simultaneously increase electricity production while reducing the state’s use of natural gas.

Facts: California currently consumes ([link removed]) about 215,000 gigawatt-hours of electricity per year that is generated in-state plus another 65,000 gigawatt-hours of imported electricity. About 44% of this comes from natural gas. California’s campaign to shut down natural gas plants while doubling electricity production in just 20 years is almost impossible. It also prevents California from participating in spectacular innovations that may enable efficiency of natural gas combined cycle power plants to exceed 70 percent ([link removed]) —which would produce more energy while using less fuel and creating fewer emissions.

Trump: President Trump has been clear that he is focused on ending the Left’s war on American energy under the banner of fighting climate change. He has consistently championed increasing fossil fuel production, including natural gas, to lower energy prices for Americans and protect national security. Trump has appointed North Dakota Governor Doug Burgum as both Secretary of the Interior and the head of the newly established National Energy Council.

“This Council will oversee the path to U.S. ENERGY DOMINANCE by cutting red tape, enhancing private sector investments across all sectors of the Economy, and by focusing on INNOVATION over longstanding, but totally unnecessary, regulation,” Trump said in a statement.

2. Offshore Wind

Newsom:
The Governor supports the development of offshore wind energy as part of his renewable energy goals. California is proposing to build offshore wind turbines to produce an estimated 85,000 gigawatt-hours ([link removed]) of power annually to the electric grid.

Facts: To meet that goal would require 2,500 floating 10 megawatt wind turbines 20 miles offshore, each one about 1,000 feet tall ([link removed]) , anchored in water 4,000 feet deep, with high voltage undersea transmission lines connecting each of them to land-based substations. If these monstrosities are ever built, the total project cost will easily exceed $300 billion ([link removed]) , with catastrophic consequences to the marine environment ([link removed]) including migrating whales.

Trump: Trump’s first administration put a decade-long moratorium ([link removed]) on offshore wind that was set to begin in 2022. The Biden administration ended it as part of the Inflation Reduction Act of 2022. The President-elect has pledged to halt all offshore wind energy projects "on day one" of his second term. At a rally earlier this year, The Guardian reports ([link removed]) that Trump had this to say about wind turbines: “They destroy everything, they’re horrible, the most expensive energy there is...They ruin the environment, they kill the birds, they kill the whales.”

3. Banning Gas Cars

Newsom: In response to wildfires he blamed on climate change, Governor Newsom announced in 2020 that California will ban sales ([link removed]) of new gasoline powered vehicles by 2035. Newsom hopes this will encourage Californians to embrace electric vehicles (EVs) in an effort to reduce carbon emissions.

Facts: Californians don’t want to drive electric vehicles. EV sales growth is leveling out at only 5 percent ([link removed]) of all vehicles in California. Newsom’s policies also inexplicably freeze out advanced hybrid cars ([link removed]) from having any chance to compete for market share. Hybrid cars combine a traditional internal combustion engine with an electric motor and a battery to improve fuel efficiency and reduce emissions, and could be more attractive to California drivers.

Trump: While the Biden administration pushed tax credits to incentivize automakers to invest in EVs, a Trump administration may end those credits ([link removed]) , making room for companies to give customers what they actually want. The move may also encourage the auto industry to boost production of hybrid vehicles.

4. Expensive Gas and Biofuels

Newsom: In further pursuit of net-zero, California has just adopted a new lower-carbon fuel standard ([link removed]) that will raise California’s already nation-leading price per gallon ([link removed]) by “$0.65 in the near term and nearly $1.50 by 2035.”

Facts: Low carbon feedstock — raw materials needed to produce low carbon fuels — is mostly imported into California, and increasing production is not sustainable. For example, to replace California’s gasoline ([link removed]) with corn ethanol would require over 60,000 square miles of cornfields, consuming well over 100 million acre feet of irrigation water per crop. Other biofuel-oriented fuel solutions are equally unsustainable.

Trump: Trump has expressed skepticism about low carbon fuel standards and biofuel mandates, arguing that they increase fuel prices and burden consumers. He has suggested that he may end subsidies for renewable energy sources, including biofuels.

5. Declining Oil Production

Newsom:
California’s relentless tightening of regulations has brought the industry to a tipping point. California is losing its capacity to drill and extract oil — even though oil consumption ([link removed]) in the state is actually up over the past three years. In September 2024, Newsom signed a new law granting local governments more authority to restrict oil and gas operations in an attempt to preempt state law and the California Supreme Court.

Facts: Despite decades of effort and billions in subsidies to bolster “green energy,” Californians still get 50 percent of their energy ([link removed]) from petroleum. Yet field production in California has dropped from 400 million ([link removed]) barrels per year in the 1980s to only 118 billion barrels in 2023. Today, despite reserves of crude oil estimated at more than 27 billion barrels ([link removed]) , California imports 75 percent of its oil ([link removed]) . Ironically, California policies that end oil production in the state drive up imports from nations that lack California’s environmental standards or labor protections.

Trump: As noted, President Trump aims to boost domestic oil production to make America “Energy Dominant.” He nominated Chris Wright, the CEO of Liberty Energy, as the Energy Secretary, who has rightly observed that fossil fuels are integral to human prosperity across the globe.

6. Refinery Closures

Newsom:
California’s gas formulation is unique ([link removed]) , which means only in-state refineries can produce it. Now, the legislature has passed a law ([link removed]) imposing expensive new inventory storage and reporting requirements on the state’s refineries that could drive refineries out of state or out of business. Just two days after the new law passed in October, Philips 66 announced — while insisting the timing was a coincidence — that they will close their refinery in Los Angeles.

Facts: California’s policies attacking oil refineries could cause an unprecedented crisis. California’s refinery capacity ([link removed]) is 1.62 million barrels per day, against consumption ([link removed]) of 1.45 million barrels per day. That’s a 10.7 percent surplus. When the Phillips 66 plant closes next year, refinery capacity will drop to 1.48 million barrels per day, dropping surplus capacity to only 2.3 percent. One blip, and we’ll have gas lines ([link removed]) that make 1979 look like a cakewalk.

Trump: The incoming Trump administration may oppose fuel formulations that are state-specific, arguing they complicate production and distribution. His administration may challenge California's unique standards for gasoline in favor of a more uniform national policy.

7. Water Rationing

Newsom:
California’s water policies for the last 20 years have rested on one inviolable premise: The more “unimpaired flow” we release to the rivers, the better our chances to save salmon and other threatened aquatic species.

Facts: The focus on flow has become an excuse to delay or diminish implementation of harder solutions: upgrading wastewater treatment, controlling introduced predators such as bass, restoring habitat, and expanding more innovative hatchery programs. Meanwhile, California’s households are about to have indoor water rationed down to 42 gallons per person ([link removed]) per day, and up to a million acres ([link removed]) of the best irrigated farmland on earth is about to be taken out of production. None of that is necessary.

Trump: During a visit to California in September, President Trump mocked California’s water rationing, and made it clear that he will be supporting California residents and farmers in their fight for more water.

“In order to protect a certain little tiny fish called a smelt, they send millions and millions of gallons of water out to the Pacific Ocean,” Trump said. “And you know, in Los Angeles and Beverly Hills, all these rich areas, they want to give you, like, 38 gallons of water to use."

Expect Trump to deliver more water to farmers through the federally-controlled Central Valley Project, which was “wound back ([link removed]) when President Joe Biden took office.”

8. Water Supply Projects

Newsom: The solution to water rationing and fallow farmland is to build more water supply infrastructure. The Governor has acknowledged the need for modernizing water infrastructure, but it’s all but impossible in California’s current political and regulatory climate.

Facts: Whether it’s new offstream reservoirs, desalination, or even the politically favored solutions of aquifer recharge, runoff harvesting, and wastewater recycling, nothing happens fast in California — if it happens at all. Since 1970, Californians have only constructed one major reservoir, and there is still only one large scale desalination plant in a state with over 800 miles of shore and 25 million people living in coastal counties. There are projects that could safely harvest millions of acre feet from the Sacramento-San Joaquin Delta during winter storms, solving water scarcity in California forever. But will they ever get built?

Trump: The President-elect has emphasized the need for infrastructure development, including projects that enhance water supply. His administration may streamline permitting processes and reduce regulatory barriers to facilitate the construction of reservoirs, desalination plants, and other water infrastructure projects in California.

9. Forest Fires

Newsom:
The governor has repeatedly blamed California’s devastating wildfires on climate change. While California summers may be hotter and dryer in recent years, that isn’t the primary reason our forests are stressed and burning.

Facts: Thanks to a century of increasingly effective wildfire suppression combined with a timber industry nearly regulated out of existence, California’s trees now have 5 to 10 times more than a historically normal density ([link removed]) . They’re now competing for an insufficient share of light, water and nutrients, leading to disease, infestations, dehydration and death. Up through the 1980s California harvested 6 billion board feet ([link removed]) per year of timber; the annual harvest is now 25 percent of that. We have turned our forests into tinderboxes, and that is the reason fires turn into superfires. Reviving the timber industry and reviving controlled burns is the solution. Done responsibly, there is even evidence this will actually help wildlife ([link removed]) , including endangered species.

Trump: Trump has for years criticized California’s forest management practices as the major contributor to the state’s wildfires. In 2020, Trump said ([link removed]) , “I’ve been telling them this now for three years, but they don’t want to listen… Maybe we’re just going to have to make them pay for it because they don’t listen to us.” During the recent campaign, Trump reiterated the possibility of withholding federal funding if California didn’t take realistic action on its fire and water problems.

10. Nuclear Power

Newsom: California only has one remaining nuclear power plant, and its days are numbered. In September 2022, desperate to avoid electricity shortages, Newsom signed legislation ([link removed]) to extend the operation of the Diablo Canyon nuclear power plant until 2030, but this source of cheap and clean electricity remains at risk of permanent shutdown well before the end of its useful life.

Facts: With reasonable regulatory reform, modern nuclear power is cheaper than most renewables and safer with modern technology, but California isn’t building any new plants.The state was once home to six nuclear power plants, generating over 50,000 gigawatt-hours per year. But San Onofre ([link removed]) , which might have been retrofit, took its 2.6 gigawatt output offline in 2012. The other big plant was Rancho Seco ([link removed]) in the Sacramento Valley, generating 913 megawatts until it was taken offline in 1989. Now, instead of building nuclear power plants with modern designs, California’s last operating reactors at Diablo Canyon are one regulatory hiccough ([link removed]) away from permanent shutdown. Taking total system cost ([link removed])
into account, nuclear power generation is less expensive than most renewables. New advances in nuclear power technology promise large and small scale generating solutions that are safe and cost effective.

Trump: As Market Watch explains ([link removed]) : “Despite his support of fossil fuels, President-elect Trump may end up being supportive of nuclear power — not so much because it’s a clean energy source, but because of his goal, as he pledged during his campaign, to ‘bring Americans the lowest-cost energy and electricity on Earth.’ At a rally in York, Pennsylvania, on August 19, Trump said he will ‘do rapid approvals for new energy infrastructure, and we will embrace all forms of energy, including nuclear.’ The President-elect has also said ([link removed]) that “Nuclear energy is critical to United States national security.”

When it comes to Trump vs. Newsom, California’s leaders — especially business leaders — need to ask a tough question: Which administration will support policies that are better for the economy, jobs, and the environment – Washington, D.C., or Sacramento?

Not every idea from Washington is bad for California. Businesses should be able to follow practical policies without fear that Sacramento will come out swinging against the people’s best interests.

Walking this tightrope shouldn’t be necessary.

— By Edward Ring, director of Water and Energy Policy at California Policy Center. You can subscribe to Ring's weekly "What's Current" newsletter here. ([link removed])

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** Radio Free California #364: Drinking the California Kool-Aid
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On this week's podcast with CPC president Will Swaim and CPC board member David Bahnsen: The San Francisco origins of 1978’s Jonestown Massacre. Why California can’t count votes. Democrats wake up to the “political terrorism” of government unions. L.A. County’s $7 million food cart. Listen now. ([link removed])

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