Gov. Gavin Newsom proposes to ease permits for oil drilling in California

Nathan Risser, Bloomberg News on Jul 18, 2025

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California Gov. Gavin Newsom is proposing a bill to streamline permitting for new oil wells that environmental groups say would wipe out scrutiny of the industry.

The bill would establish “plug-to-drill” permitting until 2036 where two wells would have to be plugged and abandoned before a new one is drilled. In addition, drillers no longer would need well approval from the Geologic Energy Management Division, known as CalGem, so long as certain conditions are met.

Shares of in-state drillers climbed on the news, with California Resources Corporation jumping 4.8% and Berry Corp. up 6.9%.

The draft bill text — seen by Bloomberg News and portions of which were leaked by environmental groups — is the latest in a series of recent shifts Newsom has made in approaching the oil and gas industry after years of regulatory scrutiny.

The governor is softening his stance toward the industry this year after refineries operated by Phillips 66 and Valero Energy Corp. decided to shut operations in the state and California’s legislature placed a greater emphasis on reducing costs of living for the state’s 40 million residents.

A spokesperson for the governor said environmental groups are circulating only partial text from the bill.

“We continue to work with the legislature on policy that will help stabilize California’s petroleum market while ensuring a safe, reliable, and affordable supply of transportation fuels,” the governor’s office said in a statement.

In a statement accompanying their leaked text from the bill, 12 environmental justice groups said the proposal amounts to a blank check for unlimited drilling across the state for the next decade.