July 23

Brazil Bets Against Net Zero. Yet California Doubles Down on Brazilian Crude Oil

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In a world racing toward net zero emissions—or at least claiming to—Brazil is charting a boldly contrarian course. As the host of the upcoming COP30 climate summit, the South American giant is ramping up its oil production at a pace that could torpedo global climate goals. Meanwhile, California, the self-proclaimed leader in green energy transitions, is quietly fueling this expansion by importing billions of dollars’ worth of Brazilian crude. This paradox highlights the hypocrisy at the heart of California’s net-zero dream: devastating its own economy while outsourcing emissions and energy security to nations betting big against climate commitments.

Brazil’s Bold Bet on Fossil Fuels

Brazil’s state-owned oil company, Petrobras, is on an aggressive expansion trajectory that directly challenges the Paris Agreement’s ambitions. According to analysis, Petrobras plans to boost oil production by 32% between 2024 and 2030, positioning it as the second-most ambitious expander among major global producers.

By 2050, the company could extract over 18 billion barrels of oil, with investments totaling $230 billion in new fossil fuel projects.

This surge isn’t just about energy independence; it’s a calculated wager that global demand for oil will persist, even as temperatures rise.

Critics argue this strategy only pencils out economically in a scenario where global warming exceeds 2.4°C—far beyond the Paris Agreement’s 1.5°C to 2°C limits.

The emissions from Petrobras’ products could reach nearly 8 billion tonnes of CO2 by 2050, rivaling the combined annual output of the US and EU.

As Brazil prepares to host COP30, this expansion casts a shadow over its credibility as a climate champion. President Lula da Silva has defended the move, insisting oil production is compatible with international warming limits, but the numbers tell a different story.

Brazil wants to alleviate poverty at home while leading on the environment globally—but can it have both?

This isn’t mere speculation. Brazil’s actions are a direct bet against net zero, prioritizing fossil fuel revenues over emission reductions. And who’s helping bankroll it? Enter California.

California’s Net Zero Nightmare: Self-Inflicted Economic Wounds

California, the world’s fourth-largest economy, contributes just 0.75% to global emissions yet pursues net zero with zeal that borders on fanaticism. The state’s policies—mandating renewables, phasing out fossil fuels, and imposing hefty carbon taxes—are crippling its energy sector and broader economy.
Once nearly energy-independent in the 1970s, California now imports over 70% of its crude oil. Refinery closures are accelerating the decline: Phillips 66’s Wilmington complex shuttered, wiping out 8% of gasoline production, and Valero’s Benicia refinery is set to close by 2026, erasing 9% of crude processing capacity.

As an “energy island” isolated by geography, the state struggles with supply vulnerabilities, unable to ramp up production due to stringent regulations like the California Environmental Quality Act and CARB requirements.

The economic toll is staggering. California boasts the highest gasoline taxes in the US—$0.60 per gallon in excise taxes plus a $0.27 cap-and-trade carbon tax, with more hikes looming ($0.37 per gallon soon from the Low Carbon Fuel Standard, ballooning to $1.15 by 2046).

Electricity prices are the nation’s highest in the continental US. These costs exacerbate social issues: the state has over 187,000 homeless residents, the highest in the country, including vulnerable groups like veterans and seniors.

Job losses from refinery shutdowns and reduced oil production compound the pain, while policies promoting electric vehicles (EVs) erode fuel tax revenues—projected at $8.8 billion annually for roads and environmental programs.

Renewables like wind and solar can’t fill the gap for transportation fuels, leaving demand for gasoline, diesel, and jet fuel unmet domestically.

The Hypocrisy: Funding Brazil’s Oil Boom While Shunning Its Own

Here’s where the irony peaks: as California slashes its own production, it imported a whopping 65.7 million barrels of crude oil from Brazil in 2024—20.4% of its total foreign imports of 321.8 million barrels.

At an average Brent price of $81 per barrel, that’s over $5.3 billion funneled to Brazil, money that could have stayed local to bolster jobs and infrastructure.

Brazil ranks as California’s second-largest foreign supplier, just behind Iraq (21.3%), and imports from Brazil have surged from 23.9 million barrels in 2021.

Why outsource to a country actively undermining net zero? California’s leaders preach climate purity but rely on dirtier foreign oil, effectively exporting emissions and economic benefits. This dependency not only weakens energy security but also subsidizes Petrobras’ expansion, which could derail COP30 goals.

It’s a classic case of virtue signaling at home while enabling the opposite abroad. The following graphic illustrates the decline in oil production in California. 

Source: Nathan Hammer, The Great Decline.

Time to Unleash California’s Energy Potential

California’s pursuit of net zero is a dream world that’s turning into an economic nightmare. By doubling down on Brazilian crude, the state is betting against its own future—higher costs, lost jobs, and increased vulnerability—all while funding a global oil surge that mocks climate commitments.
Policymakers should rethink this strategy: ease regulations, revive local production, and prioritize energy realism over ideology. Unleashing California’s vast resources could secure jobs, lower costs, and reduce reliance on foreign powers playing by different rules. Until then, the Golden State’s green ambitions will continue to shine brightly—while its economy dims.
Sources: Data from California Energy Commission (CEC), U.S. Energy Information Administration (EIA), Financial Times, and Global Witness.

The post Brazil Bets Against Net Zero. Yet California Doubles Down on Brazilian Crude Oil appeared first on Energy News Beat.

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