Who’s to Blame for California’s High Gas Prices?

As the inimitable Yogi Berra once said, it’s déjà vu all over again.

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As gasoline prices spiked last week, Gov. Gavin Newsom denounced oil companies and called a special legislative session to impose a new tax on their profits.

 “Crude oil prices are down but oil and gas companies have jacked up prices at the pump in California. This doesn’t add up,” Newsom said. “We’re not going to stand by while greedy oil companies fleece Californians. Instead, I’m calling for a windfall tax to ensure excess oil profits go back to help millions of Californians who are getting ripped off.”

Newsom is only the latest governor to promise a crackdown on oil companies when pump prices spike. Over the years, there have been numerous investigations into why California’s prices are markedly higher than those of other states, but there’s never been any conclusive proof of collusion.

Rather, it’s been repeatedly demonstrated that California’s relatively high gas prices are largely, if not completely, explainable by unique factors such as the state’s particular refining recipe meant to minimize smog-producing emissions, its high taxes, and its overall high cost of doing business.

More recently,  California has seen decreasing refining capacity due to the state’s commitment to eliminating gasoline-powered cars and trucks and shifting to “zero emission” vehicles powered by batteries or hydrogen.

Refiners are unwilling to invest in production upgrades when their operations face state-mandated phaseout, and as in-state refining declines California is no longer a self-contained fuels island. It becomes increasingly subject to the global commodities market with the disadvantage of requiring specially formulated fuel that cannot be readily obtained from outside sources.

“California policy makers have knowingly adopted policies with the expressed intent of eliminating the refinery sector,” Valero vice president Scott Folwarkow told the state Energy Commission in a letter. “California requires refiners to pay very high carbon cap and trade fees and burdened gasoline with cost of the low carbon fuel standards. With the backdrop of these policies, not surprisingly, California has seen refineries completely close or shut down major units. When you shut down refinery operations, you limit the resilience of the supply chain.”

Amy Myers Jaffe, managing director of the Tufts University Climate Policy Lab, alluded to the decline in refining in an interview with the Los Angeles Times.

“Do I have the new infrastructure fast enough before I retire the old infrastructure, and what happens if you’re in the middle?” Jaffe said. “The way we’re doing it now is you just let the fuel costs go up and then we leave poor people with no ability to get anywhere… . And then [California leaders] grandstand against the oil companies — that’s not a solution.”

The Times article pointed out that various authorities have been warning Capitol politicians for years that California needs plans to manage the shift to renewable transportation while maintaining gasoline supplies until they are no longer needed, but the pleas went unheeded.

So what will come of Newsom’s special legislative session for a tax on windfall profits? Legislative leaders seem to be lukewarm at best. They know that rounding up two-thirds votes for such a tax would be difficult despite Democrats having supermajorities in both legislative houses, especially if Newsom cannot provide rock-solid evidence of oil company malfeasance.

The industry will argue that such as tax would merely be passed on to consumers in even higher pump prices and/or constrict supply even more.

Click here to read the full article at CalMatters

Comments

  1. And we had the chnce of recalling this elitist Pretty Boy a$$h— but didn’t. The sheeple have no one to blame but themselves. And now he wants to increase the taxes on the (fleeing) rich?

    • CA Taxpayer says

      We DID – his blasted auntie and her crooked hubby own the voting machine company. So – – – WTH can we expect????

      All you who voted for this clown show – sure hope you’re happy, cause this writer AIN’T!!!!!!!!

  2. Not one democrat, including the president, has explained HOW fossil fuels can be eliminated by the green new deal. The reason is BECAUSE IT CAN NOT BE DONE!. Even if our number one enemy CHINA cooperates and provides the materials, manufacturing and financing of solar, wind and batteries we will still be paying more for less. All while the worlds major polluters are building more cheap coal plants.
    We have enough natural gas to provide cleaner energy to every country iacross the globe.and reduce world carbon emissions far more than our political pipe dream of going to zero emissions. And going broke trying it.
    Can our political class really be this stupid?
    To all those voters who are happy gaming the system…America really is in trouble.The game is over when common sense is ignored.

  3. Idiot apparently has NO clue!!! Tax them as much as you want – they’ll just raise prices to pay for it.

    Geesh Nuisance – are ya really THAT stupid?????
    Holy crap – he is!!!!!

  4. If the idiot Democrats headed by Slick, and weenie, they would understand to stay in business the taxes are passed on the consumer….

    But that would take brains instead of ambition.

    Think about it you voted for them….you are the problem.

  5. That is an EASY question to answer….GAVIN NEWSOM AND THE NAZI DEMOSCRATS IN CHARGE…BLAME THE DEMOCRATS AND GAVIN NEWSOM…..THEY ARE TO BLAME AND IF YOU THINK ANY DIFFERENTLY THEN YOU TOO ARE A ASS,,,,BLIND ASS

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