California's Senate Bill 237 (SB 237) was enacted in 2025 in response to concerns about fuel price volatility, in-state oil production instability, refinery closures, and the need to maintain a safe, affordable, and reliable supply of transportation fuels during California’s clean energy transition. As was noted in a June 27, 2025 letter by California Energy Commission Vice-Chair, Siva Gunda, “we recommend that the State take action to achieve targeted stabilization of crude oil production in California to supply in-state refineries while ensuring that production is consistent with critical health and environmental protections.”
California is at a critical moment in our energy evolution, where the state is building new renewable energy systems, while still maintaining and moving towards the retirement of the legacy fossil fuel systems. This particular phase of the energytransition presents unique challenges as well as opportunities to advance the state’s energy and climate goals through prioritizing affordability and protecting public health and safety, and the environment. Also noted in Gunda’s June 27 letter: “If a lack of proactive management during this phase of the transition leads to rising energy prices and less reliable fuel supplies, that instability could erode support for continued decarbonization.”
SB 237 validates Kern County’s compliance with CEQA, including the adopted mitigation measures, for its oil and gas ordinance and confirms CalGEM’s authority to rely on the County’s environmental review in permitting of oil and gas production operations in Kern County.
The Statute:
- Until January 1, 2036, prohibits the California Geologic Energy Management Division (CalGEM) from approving more than 2,000 new well drilling permits annually, in reliance on the Kern County Second Supplemental Recirculated Environmental Impact Assessment Report (SSREIR), unless the State Energy Resources Conservation and Development Commission makes a formal finding that additional permit issuance is necessary for in-state crude oil production to supply 25% of in-state refinery feedstock demand, and that such production would likely help reduce costs for retail consumers of gasoline in the state.
- Deems the Kern County SSREIR sufficient for CEQA compliance for covered projects, with specific exceptions (including Health Protection Zones (HPZ) and projects outside the SSREIR scope).
- Clarifies the roles of Kern County (lead agency) and CalGEM (responsible agency) under CEQA for most Kern County oil and gas projects, while preserving CalGEM's lead agency role in certain circumstances (e.g., HPZs).
