Late last week, California state lawmakers agreed on a sweeping energy and climate package, which focused significantly more on affordability than usual—and included support for expanding production in Kern County as the state desperately tries to keep refineries open. 

California has long touted itself as the industry’s new “foe,” as Governor Gavin Newsom implemented an agenda that’s left the state vulnerable to a severe gas supply shortfall. Now, Newsom and other state officials are taking a step back, finally considering economic realities amid significant voter backlash to cost of living and sky-high energy prices.  

The shift among some Democrats has been evident for months, as State Senator Henry Stern – a Calabasas Democrat and longtime opponent of fossil fuels – told CalMatters this summer:   

“We all need to kind of evolve. Maybe that’s just the lesson on climate. There’s not really a purity test on this. It’s not like civil rights.”  

A History of Villainizing the Energy Industry  

For years, Gov. Newsom has leveled harsh invective against California energy workers, including saying in 2024 that “they are the polluted heart of the climate crisis.”  

Attorney General Rob Bonta, another industry opponent, along with Newsom famously filed an outlandish climate lawsuit in 2023 demanding oil majors pay the costs of climate change.  

That legal strategy stretches back to 2017, when San Mateo and other California municipalities filed the first climate lawsuits. Nearly a decade later, the strategy has turned out to be a dud. The “public nuisance” legal theory that began in California has been reused in lawsuits across the country, with many of those cases already dismissed. 

Legal attacks from the state didn’t stop there. Bonta filed an additional lawsuit in 2024 over alleged plastic recycling deception, despite the state’s long history of backing recycling programs. That record includes Newsom’s own push for mandatory plastic recycling as Mayor of San Francisco, and more recently, his spring 2025 decision to delay implementation of the state’s plastic bag ban. 

Anti-energy lawfare under Newsom was coupled with burdensome environmental regulations, delays in permitting, and punitive legislation such as a pledge to end oil drilling across the state by 2045.  

But as the lawsuits stall and the affordability crisis across the state grows, California lawmakers are rewriting their script.  

Why? Because their “bold” climate plan produced no reliable or affordable alternatives to oil and gas, and consumers are paying for it.  

Refinery Crisis and Affordability Concerns Force a Reversal  

California’s energy crisis has clearly been building for years, and it has recently come to a point, with major refineries announcing departures from the state. Those in the industry are not surprised with the actions, as Politico reports: 

“Andy Walz, Chevron’s president of downstream, midstream and chemicals, said California officials have made the state ‘uninvestable’ for companies like his and that it had been only a matter of time before a refiner pulled the plug. ‘I don’t think they believed the industry was in trouble,’ Walz said of California officials. ‘I think they misread what was really going on, and it took some real action by some competitors to get them woken up.’” 

As Energy in Depth has previously analyzed, Phillips 66’s and Valero’s upcoming exits from the state spell disaster. The two refineries represent a large percentage of the state’s refining capacity, meaning their exit will have an outsized impact on the state. With less supply, and only increases in demand, prices will rise even as Californians already face the highest gas prices in the nation.  

So where does this leave officials like Gov. Newsom? It seems that Newsom is changing up his narrative – and backing it up with policy initiatives. This was evident in the Governor’s comments in July of this year:  

“We are all the beneficiaries of oil and gas. No one’s naive about that. So it’s always been about finding a just transition, a pragmatism in terms of that process.” 

Matt Rodriguez, a longtime Democratic consultant, outlined where Newsom’s current thinking is, especially as the governor is rumored to be considering running in the 2028 presidential campaign:  

“The reality is that gas prices are higher here than the rest of the nation. That’s just undeniable. If there are storm clouds on the horizon, you can’t just sit there and ignore it… Any way that he can keep gas prices from ballooning, that’s his imperative.” 

Newsom’s shift already has policy implications. In the new energy and climate package signed last weekend, a bill passed to ease permitting requirements for up to 2,000 new oil wells per year in Kern County, a policy championed by Democratic State Sen. Stern:  

“Call me born again, but I have seen the light on exactly what you’re [Republican colleagues] talking about. Kern County should be unleashed.” 

The bill had bipartisan support, with State Senator Tim Grayson (D) stating the bill would “provide relief from the rising gas prices.” The county is home to about three quarters of the state’s crude production, and the new bill locks in approvals through 2036. It is a small step of certainty in a state that has created one of the most uncertain environments for energy investment.  

Newsom’s last-minute shift to keep the state’s refineries afloat this weekend even earned praise from Kern County State Sen. Shannon Grove:  

“I want to thank the governor for being willing to listen and to understand the situation that we have before us, and his courage to act immediately to stabilize fuel prices for all Californians,” she said in a speech to her Senate colleagues. “We are not the enemy.” 

The state legislature’s shift on energy followed other legislative attacks on oil and gas that died earlier this year. Senate Bill 684 and Assembly Bill 1243, advertised as “Polluters Pay Climate Superfund Act,” failed in the state legislature. The bills sought to impose retroactive fees on large fossil fuel producers operating in California. Given the massive shift underway among Democrats in Sacramento, it appears the legislation will face tough sledding should it be reintroduced next year. 

However, rejecting flawed ideas and passing emergency measures to keep refineries open will not, on their own, resolve California’s rising energy costs. Real solutions will require a more deliberate strategy, one that gives producers a clear reason to invest and operate in the state, rather than burdensome regulations and frivolous lawsuits that drive them away.  

Whether Newsom is willing to sustain this pragmatic shift remains an open question. As he approaches the end of his term and positions himself for a likely presidential run, Californians will see whether he continues prioritizing practical solutions to reduce costs.   

Bottom Line: After helping to create California’s self-inflicted energy crisis, Gov. Newsom and his administration are pivoting to policies that finally stop ignoring consumer concerns. The state sets a clear cautionary tale for the country: villainize a crucial industry for years, and consumers will pay the price.