100+ years ago California was a huge oil producer. People were not crazy. We need it and it made money so people and policy supported it. There were derricks up and down and around what is now Wilshire Blvd. They still have some pumps down La Cienega near the airport, and a couple in Beverly Hills. Can’t speak for other parts of the state with certainty but the LA basin in particular had a huge pond of oil underground.
They even had oil wells in downtown areas disguised as office buildings. An there is the THUMS complex off of the coast of Long Beach that looks like an off shore hotel/resort.