SACRAMENTO, Calif. – Gov. Gavin Newsom Thursday signed into law this year’s California budget, which includes the allocation of $1.5 million toward a study to “identify strategies to decrease demand and supply of fossil fuels.” The provision marks the first step the state has taken toward decreasing the state’s fossil fuel production.

“This study will be a big leap forward for California’s fight against the climate crisis,” said Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute. “Gov. Newsom is laying the groundwork for confronting the state’s massive dirty oil problem. In order to respond to the climate emergency, protect public health and lead on environmental justice, he must tackle oil extraction.”

An interagency state team led by the California Environmental Protection Agency will develop the scope of the study to “evaluate pathways to achieve a carbon neutral economy by 2045, manage the decline of in-state production as the state’s fossil fuel demand decreases, and assess potential impacts to disadvantaged and low-income communities and strategies to address those impacts.”

California is one of the nation’s top oil-producing states, extracting among the most climate-damaging crude in the world. A Center analysis found that three-quarters of the oil produced in California is as at least as carbon-intensive as Canada’s tar sands crude.

The state’s fossil fuel extraction is also an enormous public health and environmental justice issue. Living near oil and gas wells is associated with a higher risk of cancer, respiratory diseases and reproductive problems. Wells in California are disproportionately located in low-income neighborhoods and communities of color.

Further addressing the state’s fossil fuel consumption, the budget directs another $1.5 million toward studying strategies to significantly reduce greenhouse gas emissions from vehicles.

“California can and must reduce its oil production, oil consumption and oil imports in tandem,” Siegel said. “Phasing out fossil fuel extraction, alongside measures like requiring all vehicles sold in California to be electric no later than 2030, would slash the state’s climate and air pollution. And it would set a model for the rest of the world to follow.”