Gov. Gavin Newsom has killed a proposal to add staffing at the state agency that oversees oil and gas drilling, at the request of the oil industry, which is feeling the squeeze after a severe drop in fuel demand due to the state's coronavirus stay-at-home orders.
In his budget unveiled in January, Newsom had called for adding 128 analysts, engineers and geologists to the California Geologic Energy Management Division, or CalGEM. Oil producers would have had to pay $24 million to fund the expansion.
But at the end of March, the California Independent Petroleum Association (CIPA) – which represents 500 crude oil and natural gas producers – sent Natural Resources Agency Secretary Wade Crowfoot a letter urging the administration to drop the proposal.
CIPA said at the time that the costs and extra oversight would further hurt an industry struggling after a pandemic-driven collapse in demand for gasoline and jet fuel.
Newsom shook up agency management last year after it came to light that it had dramatically ramped up approvals for drilling projects using hydraulic fracturing, or fracking, and that some senior staffers held investments in the companies they were overseeing as regulators.