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I'm David is are what's going on with gas prices here in California.

The sticker shock is killing residents in this state as the wallets keep taking a hit.

Something is strange here, especially when the National average in the US is about $3 a gallon, with some states as low as $2.60.

Why here in California is the average gallon of gas about $4.70, and that's on the low end.

Some gas stations in this state are shockingly as high as $7 a gallon.

That's insane.

And we're going to have some answers for you during this broadcast as we interview the leading oil and energy expert in California today.

First, though, before we talk to our expert, here's just a sample of what many Californians are complaining about these days.

Take a listen.

As somebody who works like, you know, three different jobs just to make ends meet and then having to pay, you know, almost $100 to fill up her gas tank, it's it's demoralizing.

It's awful.

They're just super expensive.

I mean, almost unaffordable.

You got to fill up, like, every few days.

I have to start budgeting myself just for gas.

And that's to get to work to make more money.

So just all in all makes everything a lot more difficult for me and my entire family.

Honestly, I think I spend about $100 a month in gas, so it's really taking a toll on, I think not only me, but a bunch of people that have their are self-employed.

They have to travel for a living.

There's nothing I can do.

It's all about our government and who's running our state.

And if they're mismanaging and we pay for it happens all the time.

Joining me now to discuss all of this is USC Professor Michael McKay.

Professor McKay is a widely published and highly respected scholar who's written more than 150 papers, many focused on California's oil and gas sector.

We've had, you know, some pretty tough economic policies imposed on the California consumer here.

Is this bad policy just a viable policy?

It really depends on one's perspective, right?

For me, it's horrible policy because government should be working for the people.

USC Professor Michael McKay says during the Newsom administration, gas prices have increased nearly 35% all throughout California.

Ever since the day the governor took office and the number of drilling permits has declined, some 97%.

Professor McKay says his own 2025 published reports researching gas prices and the oil industry are an example of California's mismanagement, as this relates to the energy sector mismanagement that much, she says, has forced oil companies to flee California and gas prices to spiral out of control.

The first study was on price gouging.

And as you know, the governor has demonized the industry and said they're price gouging the consumer.

We did a 50 year study going back to literally 1971, and we could find no economic evidence of price gouging by the refiners or by the oil producers.

We're losing one refinery, Phillips 66, in Wilmington, and we're losing a second refinery, Valero, up in Benicia.

And we've also lost some production.

We're down 20%.

Prices are going to go up and you need to pay attention to this.

And so it didn't fit his narrative.

And so he he attacked me personally and really tried to get me fired.

And professor, for the record, we should tell our viewers you are neither Democrat or Republican, liberal nor conservative in your reporting.

It's just the facts.

It's very centrist.

It's very common sense.

You're not trying to do gotcha reporting.

It's simply trying to say, hey, here's the data.

Californians are suffering.

This is the research, if I'm not mistaken.

That's exactly right.

I mean, the research, the all the data is publicly available.

It's California data came from the California Energy Commission, California Air Resources Board, California Franchise Tax Board, and in fee administration.

So this is all publicly available data.

There's nothing fancy about it.

There's nothing sinister about it.

Everybody uses it.

We took data from the EIA.

The math is the math.

It's that simple.

You know, and us.

You know, I say top folks, two and two, equal four in our world right now.

You may not like that answer, but that is the answer.

And so in this case we have supply dropping by 20%.

Demand is not coming down the way they thought it was going to come down.

And so the prices are naturally going to drift upwards.

We're here now in West L.A.

this mark of the price is anywhere from five to over $6 a gallon.

I saw prices $6.30 a gallon, $7 a gallon.

What the people need to understand is, of that $5 in $0.19, a dollars $0.44 in California taxes and regulatory fees.

So how much is the owner of this gas station and earning at today's prevailing price, somewhere between 8 and $0.12 a gallon, while the state makes $0.60 a gallon on the same gallon of gasoline.

So in California, we had 40 plus refineries.

Today we have eight.

In April we'll have seven.

In addition, we have this huge pipeline system that goes north south.

Now, there's not enough oil in that pipeline system to make it economically viable or even operationally viable.

That's part of the reason for SB 237 of these oil wells.

But if we lose that pipeline and there's a high probability that we will, along with another refinery, then prices are just going to skyrocket.

California Senate Bill 237 that Professor Marcia speaks of is a 2025 law that streamlines oil and gas drilling in Kern County, California.

Kern County is the largest oil producing county located in the Central Valley.

It's also a large oil producing region for the U.S., with its massive midway Sunset oilfield.

SB 237 is intended to boost local production in Kern County and eventually help stabilize gas prices all throughout the state.

The new legislation is an effort to make the permitting process for new wells easier and more efficient.

Simply put, 237 exempts new drilling projects in Kern County from certain sequa requirements for ten years.

Sequa is a California Environmental Quality Act.

So this kind of loosens some restrictions, now allowing some 2000 new well permits.

And 237 also gives Governor Newsom the authority to suspend costly summer blend gasoline requirements during price emergencies.

The bill also requires exploring the possibility of a regional fuel blend to try and help stabilize the out of control market, which has resulted in some of the insane California gas prices.

And yet, despite the governor's efforts, professor McKay says SB 237 was passed partly for Governor Newsom's political expediency.

According to professor McKay's recent SB 237 published study that he shared with Congress, she writes in part, the governor is wrong.

The California Legislature views SB 237 as the primary solution to the refinery and gasoline crisis.

However, the math says otherwise.

Goes on to write SB 237 is not going to provide enough oil to meet demand, nor keep the Crimson Pipeline operable.

The Crimson Pipeline is a mega North-South, California artery that's about to collapse and probably shut down no later than March 31st, 2026.

The professor further writes in his study restoration of the pipeline is possible, however, this requires additional expenditure more money.

Consequently, McKay says, California's supply chains can now be vulnerable to geopolitical and natural disasters, with California more dependent on non U.S.

foreign sources of both crude and gasoline, and now more reliant on foreign tankers for product shipment.

Finally, Professor Maté writes, in all instances, California is going to further contribute to increasing global greenhouse gas emissions and a massive increase with consumer retail gasoline prices.

Professor Maté says SB 237 is too little, too late.

So the first refinery to come out publicly to lead was filled with 66 here in Wilmington.

And there are about 135 to 139,000 barrels of oil a day refinery capacity.

And they flat out said the state is too complex to work within, and our costs are going up not too long after that, in April, late March, early April.

Valero in Northern California flat out said we're out of the state and they were very upfront about it.

They said, we're tired of operating this hostile environment.

We're tired of operating under these punitive rules.

And by the way, our operating costs across California refineries are, on average, 35 to 38% higher than anywhere else in the country.

So they exited for regulatory reasons and economic reasons.

Now, interesting.

If I could add this, Gavin Newsom led an effort to try to entice them to stay in the state with anywhere from 80 to $200 million, compensation package.

They turn that down just a few weeks ago.

They reconfirmed last week they're exiting no later than April 30th, 2026.

However, he's now the governor is saying he's oil friendly.

Well, yeah, he's oil friendly now because he realizes the mistakes that have been made by his administration and himself personally.

Right.

For the record, I contacted the office of Governor Gavin Newsom for this special report for an on camera or zoom interview so we could hear from the governor loudly and clearly hear all he has to say about California gas prices and his oil policy.

His office replied saying, we're not tracking any availability on the governor's calendar for an interview.

Also, for the record, Governor Newsom has an invitation to be a guest on this program whenever convenient for his busy schedule.

We hope to hear from him eventually.

Has the governor?

Has Gavin Newsom tried to speak with you about your dad or your concerns about fuel affordability here in the state?

How these prices, these prices are killing the wallets of motorists.

Have you heard from the governor's office?

I have not.

This price is 50% higher than the national average today.

And and so what I heard from the governor was a lot of vitriol and an attempt to discredit me and my work.

Nonetheless, I reached out to him on several occasions, and I said, I'll be happy to come to Sacramento.

I'll be happy to sit down with you.

I'll be happy to go over this.

You may not agree with me at the end of that, but at least you'll know the thought process and the methodology and the effort that went into it.

Not a word.

Instead, it was vitriol, an attempt to disparage my reputation.

With that said, I hear everything you're saying.

To be fair.

And even though Governor Newsom's office declined an on camera interview for these series of oil reports we've been producing, he is not here.

So I'm going to defend their office a bit.

Could there be the possibility, professor McKay, that it is your data that's possibly flawed?

Possibly.

You've made some mistakes with your research and possibly you're not being fair to Governor Newsom and his efforts to, at the very least, try to keep California environmentally friendly.

Great question.

The data is public data.

I mean, we got the data directly from the state of California.

The problem we have here is that it doesn't support the governor's narrative.

I suspect that if the report did support the governor's narrative, I would probably be sainted in Sacramento instead of demonized in Sacramento.

And all of a sudden, like my bank account keeps getting drained from spending so much on this gas.

I feel for the American people, people that have to commute, you know, over an hour a day having to spend that money that they're not getting reimbursed from their employers.

Obviously, it's the most expensive in the world for a reason.

I don't know why that reason is, but it's pretty ridiculous.

That was probably driving the same amount in Florida, and that was probably a half of the price of what I pay on a monthly basis here.

What are you doing to the people?

The economy relies on working Americans to keep everything going properly and smoothly, and this is not making anything easier for anyone else in Texas.

Folks are telling me they're paying $3 a gallon, $2.70 a gallon.

I'm not sure I'm getting it.

If there's a disconnect.

Well, there shouldn't be a disconnect because every state has multiple grades of octane.

The price we see up there for octane grades.

And so you can get octane in various states.

The problem that we have is $1.44 of this price is California taxes and regulatory fees.

They're baked into the consumer price, which is half the price of a national average for the gallon.

It is.

Why are we paying $0.60 a gallon in a state?

Excise taxes the highest in the country?

Professor maché should be clear.

Are you saying that Governor Gavin Newsom is directly to blame?

His oil policies are directly to blame for these prices here they are the major factor for these prices.

Because look what just happened.

We doubled down in cap and trade.

So cap and trade is now in effect to 2045.

He's he's dubbed it cap and investment.

The California cap and trade program issue references is a key component to Governor Newsom's climate change strategy.

Very simply put, cap and trade sets a limit or cap on the total amount of greenhouse gas emissions that toxic particles, the diesel emissions that can be admitted into the air from sources like manufacturing or energy sectors, for example, the massive ports, oil refineries, power plants, large industrial facilities, public transit structures, all of which has large scale transport and heavy duty equipment.

Cap and trade is a program that has the ambitious goal of moderating those greenhouse gas emissions.

However, professor McKay says based on the research and investigation of the California Legislative Analyst's Office or Leo, as it's referred to, there is, quote, no scientific evidence that cap and trade has reduced greenhouse gas emissions or improved air quality.

In fact, says Leo, has suggested that cap and trade is basically just another tax.

So if that's the case, where does the state earn money from the California Cap and Trade program go?

Well, that's where there's some controversy, to say the least.

Or at least according to all the California and Newsom critics, the revenue is often used to fund projects dealing with climate change projects intended to further reduce greenhouse gas emissions, such as investments in clean energy or zero emission electric vehicle infrastructure, things like that.

And as critic Professor Maté says, cap and trade revenue is also slated for California's high speed rail, which he claims is a joke.

But if you look closely at cap and trade, it adds a considerable amount of price cost to the price of gasoline.

And so we've contributed to that.

Now.

Interesting.

25% of the cap and trade goes to the California High-Speed rail project, which is a train to nowhere, which we all know is not a high speed rail project anymore.

And it's not going from downtown L.A.

to downtown San Francisco.

So it's a very important aspect for us to understand how and why this money is being collected and how it's being spent.

And this is just transparency needs to be in place for it.

Well, again, the narrative that that he has about climate change and big oil and, and in some of the initiatives and particularly the Clos, they're baked into the price of gasoline.

That narrative does not square out with the research that we've produced and the analysis that we've republished.

It just doesn't square out and so I believe perhaps, our work represents a threat to his political position and his political future.

Professor Michael Maté of famed USC, University of Southern California, thank you so much.

My pleasure.

Thank you.

From gas prices and oil to a different kind of energy.

Geothermal energy is a renewable resource derived from the Earth's internal heat that's extracted from underground reservoirs.

Proponents of this type of energy say geothermal power plants produce a little to no greenhouse gas emissions.

Saying this is an environmentally friendly and reliable energy source.

To find out more about geothermal.

We traveled to Oregon to a hidden forest of sorts just outside the Newberry Crater Monument.

This is where history is possibly in the making, as two energy companies are joining forces to attempt something earth shattering.

The effort here is to generate hot water from a deep, dry well and morph it into electricity.

This is all part of our continuing content sharing partnership with public media and PBS stations, all throughout the U.S.. For this report, we visit our public media partner, OPB, Oregon Public Broadcasting, to explain this unique experiment at the Newberry Crater.

This story begins with a multimillion dollar failure, which might just lead to a revolutionary advance in renewable energy.

A company called Davenport Newberry drilled a couple of wells like this one nearly two miles deep, just outside the Newberry volcanic crater in central Oregon.

They had hoped desperately to find hot water.

We had very high temperatures in excess of 550°F.

We were very excited about that.

But no hot water and no steam.

It was heartbreaking.

We had spent upwards of $30 million at that point.

For decades, geologists figured if any place in Oregon would be good for geothermal energy, it would be here at Oregon's largest volcano.

Laws prohibit drilling within the actual Newberry Monument, but drillers had expected better results from these wells that lie just outside the boundary.

If you look at a heat map of the United States, the Cascades are a nice bright spot, and there's a huge area of hot rock underneath us.

All these volcanoes have a lot of heat energy stored in the rock around those volcanoes.

Geologists dream of tapping into the ultimate renewable energy, the endless heat trapped in the Earth's own core.

Sometimes the planet vividly displays the energy that it's hoarding in Yellowstone.

Steam and hot water fought themselves at every turn in Hawaii.

The earth cracks wide open, spewing red hot lava into the sea.

But the Newberry volcano doesn't show off.

She keeps her heat under wraps.

However, there is one way to glimpse the power under foot.

To see it.

We motor across Paulina Lake, pop out on the northeastern shore, and promptly dig a hole.

You don't have to dig far.

Temperatures can reach up to 135 degrees right here.

This pool is so hot that I can stand in here for, That's about it.

That hurts.

That's too hot.

Just inches from the cool water of the lake.

You can dig your own hot springs.

The temperature varies.

Clean.

Clear.

Warm water.

These hot springs are absolutely amazing.

It makes your skin and hair feel great.

So awesome.

It's so much fun.

People who soak at Newberry Crater enjoy an unadvertised benefit of playing in this active, enormous volcano.

The sleeping giant is what the USGS refers to it as, because people don't even realize it's here so large it's hard to wrap your arms around it.

I mean, we're sitting on the largest volcano in Oregon, the largest volcano in the Cascades, 20 times the size of Mount Saint Helens.

We're talking in an area of 1200 square miles.

Newberry.

Lava flows stretched for 75 miles across a landscape filled with smaller volcanic cinder cones.

A 9000ft mountain once stood here before it collapsed 75,000 years ago to form the giant hole we see today.

Since then, it has erupted another 50 or 60 times.

Most recently 12 to 1300 years ago.

That's what's left behind the massive obsidian flow.

It's an easy volcanic feature to spot, but the volcano's inner plumbing has been hard to figure out.

This is one of the evidence we have of the potential power of this volcano that we're in.

And of course, that's what triggered all this interest in geothermal power.

The fact that we don't have to go that far down to get to these hot temperatures, while hot water bubbles up in the middle of the caldera, next to the lakes, just outside on the volcano's flanks.

Drilling hasn't found a drop, but what that left us is an excellent opportunity to test eggs.

Well, number 5529 is that dry hole.

The end of this wellhead lies 10,000ft deep.

The rock down there bakes at 600°F.

Will Osborne is with ultra Rock energy.

His firm partnered with a well drillers Davenport.

Newberry.

They are spending more than $44 million, half from taxpayers, to prove that EGS enhanced geothermal systems could turn this hot, dry well into a source of limitless renewable power.

The way to expand geothermal in this country is by creating our own EGS reservoirs in all that hot rock that that is, waiting there for us.

Since there's no hot water down below, they'll pump it down there, but there's no empty cavern waiting to be filled up.

So they plan to make their own reservoirs nearly two miles underground by breaking the rock with high pressure water.

We use the natural fractures in the rock, so when we inject water at high pressure, we're opening up the natural fractures in the rock and just causing those to slip a little bit.

And when they slip the the irregularities in the rock will cause those cracks to, to remain open.

We're talking about cracks that are millimeters thick in aperture.

So 1 to 2 three millimeters will be that big.

They hope to create not just one, but three reservoirs stacked on top of one another underground.

The plan is to pump cold water down into those cracks.

The earth then heats it up.

They would then drill new wells off to the side to pump that now hot water back to the surface to power turbines.

The concept of gas those to create a closed cycle.

You bring the hot water to the surface, extract the heat, and then put the cool water back in.

There is likely to be one side effect of forcing so many cracks into the subterranean rocks.

Lots of very small earthquakes, most under one magnitude, though perhaps a few up to 3.5 or 4.

Will Osborne says they're not likely to cause any damage because this area is so far from nearby towns.

In this case, we're not talking about earthquakes so much as, micro seismic events.

Generally don't get large enough to be felt.

I think there will be some very low magnitude earthquakes, highly localized around the drilling sites, and it's very unlikely that you would actually be able to feel those earthquakes.

But our instruments are sensitive enough that they would actually be able to detect them.

Ben Palk is a geophysicist with the U.S.

Geological Survey.

The USGS is not a partner in the geothermal experiment, but it happens to be installing eight brand new seismic sensors around Newberry at an opportune time.

It's a pretty high threat volcano, and the last eruption in Newberry was a little over 1200 years ago, and a big obsidian flow.

It's very likely that it will erupt again in the future, with the new sensors scattered in and outside the caldera.

USGS will be able to watch any volcanic activity live as it happens.

It also puts them in the perfect position to pick up any tremors that may occur at the enhanced geothermal site nearby.

We will be in a better position to distinguish if the earthquakes that are occurring as a result of the injection are indeed a result of the injection, or if they're a result of magma accumulating at the in the magma chamber beneath the volcano.

Alta Rock had wanted to try this same geothermal experiment a few years ago in California.

At The geysers, it's the largest geothermal field in the world, but the company never got a chance.

The electricity producers there had already been injecting water, which caused earthquakes just large enough that people nearby complained these days.

That leads to another comparison to one of the energy industry's most controversial practices.

Isn't this like fracking, where drillers fracture the rock to extract natural gas in hydrofracking that's done in the oil and gas industry.

They actually shatter the rock.

They break the rock and create new cracks, new fractures in the rock.

And we just inject cold, clean groundwater and hydrofracking.

They use a mixture of chemicals.

Enhanced geothermal already produces power in Europe.

At the Newberry experiment, a power plant isn't even part of the plan yet.

If they can get hot water from a dry hole, then geothermal energy might be possible all across the country.

That's the holy grail.

Why is this the Holy Grail?

Because it's baseload power from geothermal energy.

It's available 98% of the time, 24 hours a day, seven days a week, 365 days a year.

We're enhancing the productivity of the geology of the Earth to produce hot water.

The difficulty is making that reservoir.

So that's what this demonstration is about.

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