As reported by the Washington Post, the Trump administration’s draft five-year offshore oil and natural gas leasing plan would reopen California’s coastal waters to oil and natural gas drilling for the first time in four decades, proposing up to six lease sales between 2027 and 2030. The federal government has not held lease sales on the Pacific Coast since the 1980s. California Governor Gavin Newsom declared it “dead on arrival.” According to the American Petroleum Institute and nine other energy groups in a letter, “Undiscovered resources could be readily produced given the array of existing infrastructure in the area, particularly in southern California.” However, oil producers would be faced with California’s stringent environmental rules if they were to undertake such drilling.
According to the Los Angeles Times, California still has roughly two dozen active oil platforms in state and federal waters, some of them easily spotted from beaches in Southern California. But the industry has been largely frozen in place for decades: no new federal offshore leases have been issued since 1984, a legacy of political resistance that hardened after the 1969 Santa Barbara oil spill. Even so, significant untapped reserves remain. The U.S. Bureau of Ocean Energy Management’s (BOEM) latest assessment of the Outer Continental Shelf estimates about 9.8 billion barrels of technically recoverable oil off California, most of it concentrated offshore Southern California. Details of the administration’s emerging offshore strategy are not yet public, but BOEM maps highlight four potential areas along the West Coast — three off California and one spanning the waters of Oregon and Washington.
Via the Washington Post, in Alaska, the administration is weighing more than 20 offshore lease sales through 2031, covering virtually every coastal region — including the High Arctic, more than 200 miles out in the Arctic Ocean. The plan also contemplates opening parts of the eastern Gulf of Mexico to new drilling, a politically sensitive move in an area long off-limits because Florida officials fear offshore activity could threaten the state’s tourism economy. Lease sales there are under consideration for 2029 and 2030. An earlier draft of the plan floated potential leasing along the East Coast, but those prospects remain blocked unless President Trump reverses a drilling moratorium he imposed during his first term that runs through 2032.
According to the Washington Post, the five-year offshore oil plan is in addition to the offshore oil lease auctions approved in President Trump’s 2025 budget legislation, including 30 lease auctions in the Gulf of America (Mexico) over the next 15 years, where there is an estimated 29.6 billion barrels of technically recoverable oil, and six off the Alaska coast in the next decade. The draft proposal will likely take at least a year for final approval, and new production would take several more years beyond that. Recently, the administration announced plans to open the 1.5-million-acre coastal plain of Alaska’s Arctic National Wildlife Refuge to oil and gas leasing. It is also planning an oil and gas lease sale in the National Petroleum Reserve in Alaska, calling for nominations for areas to auction, the first step in the leasing process.
Whether actual drilling takes place is dependent on the price of oil and the profitability of the expansion. Oil at $60 a barrel due to a global supply surplus and slowing oil demand from more fuel-efficient vehicles does not support much new development. The Gulf Coast, however, has a cost advantage in that companies have been drilling there for years, have the necessary infrastructure, and communities are supportive of the industry and its growth.
California’s Wall of Opposition
The Los Angeles Times reports that offshore oil platforms can require pipelines and other infrastructure to get the oil onshore, and California is not likely to cooperate with that work. It has built up a “blue wall” of opposition to offshore drilling through local resolutions and legislative efforts. A number of state laws — such as the California Coastal Sanctuary law, the California Coastal Act, the California Environmental Quality Act, and a 2025 Assembly bill — would prevent oil companies from using existing oil and gas infrastructure in state waters to export or bring new production from federal offshore leases. State waters are the first three miles offshore.
Oil companies eyeing offshore prospects have potential workarounds for California’s constraints. Producers can load crude onto tankers and ship it to markets outside the West Coast — an option Sable Offshore Corp. is weighing as it seeks to restart drilling off Santa Barbara. Firms can also deploy floating production facilities that handle processing at sea, reducing the need for new pipelines. But those alternatives come at a high price. And any move to bypass California’s restrictions would likely trigger legal and political battles, adding even more cost and uncertainty for developers.
Analysis
Offshore leasing for oil and natural gas production gives companies a chance to meet the immense energy demands of artificial intelligence and data centers with the U.S.’s vast reserves. For too long, California has nixed energy production in the state, and it has suffered the consequences of higher electricity and gas prices. An offshore leasing plan could help the state lower these prices by increasing the supply of oil and natural gas, but without other regulatory changes, attempts to increase production in the state’s waters will likely be dead on arrival.
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