SANTA BARBARA, California — The Trump administration is in “active dialogue” on creating a petroleum reserve in California, Energy Secretary Chris Wright told POLITICO on Friday, a move that would boost oil infrastructure in the state and undermine Democratic Gov. Gavin Newsom’s bid to shrink the state’s fossil fuel footprint.
A June 2 document that lawyers for Sable Offshore Corp., which owns a trio of oil platforms off the California coast, sent to the Energy Department and seen by POLITICO shows the company has proposed a West Coast Strategic Petroleum Reserve “in response to the inquiries made by the Trump administration and in the furtherance of Sable’s ongoing discussions with the Department of War for the supply of oil and gas to California.”
Wright confirmed in an interview that such a facility is under discussion but didn’t offer details.
“California is a military launch pad for the Pacific Ocean, a huge amount of facilities here,” Wright said in an interview after a tour of Sable’s oil facilities in Santa Barbara County. “What is it that we can do to make California and our national defense more secure? It just stands out as this very unfortunate expensive energy isolated island.” The administration was “in active dialogue” about potentially setting up a reserve in the state, he added.
A new reserve would come to a West Coast that has few pipelines connecting it to the rest of the country. But it likely would draw opposition from Newsom and other California lawmakers who have tried to reduce the state’s dependence on fossil fuels especially after multiple pipeline ruptures have sent oil washing up on California beaches over the past several decades.
The Energy Department’s current reserve is located in a series of salt caverns in Texas and Louisiana. The Trump administration is in the process of releasing 172 million barrels of oil from those sites to help ease the price shocks caused by the closure of the Strait of Hormuz.
According to the document, the initial storage facility would contain 370,000 barrels with a second phase of potentially 30 million barrels. The effort would bolster supplies on the West Coast, which has been plagued by high fuel prices, and would expand the reserve that was created in 1975 to combat supply disruptions. The Biden administration released more than 400 million barrels of crude from the reserve to offset rising oil prices following Russia’s invasion of Ukraine.
“The storage facilities and the connected and adjacent pipelines would make any oil stored in the facility available to serve the military installations in central, northern, and southern California, the remaining refineries in California’s major population centers, and further available for maritime transport via the port facilities in both the San Francisco and Los Angeles metropolitan areas, for onward transport to the military installations in the Asia Pacific region,” the document states.
Sable has become a darling of the Trump administration since Wright invoked national defense powers to order the restart of the offshore oil operation over the state’s objections. Sable CEO Jim Flores complimented Wright and Interior Secretary Doug Burgum during Friday’s press conference for their “attention to California and caring about the state of California from a refining standpoint, inventory standpoint, strategic petroleum reserve, things like that.”
Newsom’s office did not immediately respond to a request for comment. But the California governor has criticized Sable’s relationship with the Trump administration, accusing the company of defying court orders during its restart.
Storing oil in the Golden State might not be as advantageous as it first sounds, said Bob McNally, head of energy consulting firm Rapidan Energy and former energy adviser to the George W. Bush administration. The state has lost much of its ability to process oil into finished gasoline, diesel and jet fuel after companies have retired their refineries there, McNally said.
“With California shutting down refining, not that big of a deal,” McNally said of the news.