The Newsom administration is at odds with itself on gasoline prices, on both sides of the aisle.
Are you trying to keep gas prices down, or is it okay to raise them? It seems like both.
One hand may not know or care what the other hand is doing.
On the one hand, the California Air Resources Board is quietly adopting regulations that could raise pump prices by nearly $0.50 per gallon or more. This is detailed in a Times article by reporter Russ Mitchell.
Meanwhile, both chambers just passed a bill passionately sought by Gov. Gavin Newsom, who said the California Energy Commission would require refineries to withhold fuel on an emergency basis to “big oil” They claim that this will help avoid “price hikes.”
A sudden shortage in supply would cause prices to skyrocket, increasing by as much as 40 cents to 75 cents a gallon, state Sen. Nancy Skinner (D-Berkeley) said Friday, leading the governor’s bill during a brief debate in the Senate. I told my colleagues while doing so. It’s about the old law of supply and demand.
The bill, AB 1, passed on a party-line vote of 23-9, with just two more votes than needed. Some Democrats didn’t vote at all. The bill was sent back to Congress for regular Senate amendment consent.
“Consumers lost more than $2 billion due to price increases last year, and we are taking the steps necessary to end this,” Newsom declared after the Senate vote.
“This bill is just a smokescreen for what’s really going to happen,” asserted Katherine Rehuis Boyd, president and CEO of the Western States Petroleum Association. “After the November election, the California Air Resources Board will take action to further increase gas prices.”
The Governor appoints all five members of the Energy Commission and 12 of the 16 members of the California Air Resources Board. The governor selects the chairs of both regulatory commissions.
So you would think Newsom would have some influence over his appointees. Why would he push through a bill that would allow some companies to block price hikes while allowing others to sit on the sidelines?
Indeed, they are quasi-independent institutions that are supposed to act apolitically. But they are created by politics. Governors, including Newsom, have fired many chairs they felt were not implementing their policies.
And a big hike in gas prices is clearly not part of Mr. Newsom’s stated agenda. He is trying to lower consumer costs.
But the air board addresses one of Newsom’s priorities: reducing global warming emissions. And they plan to vote immediately after the election on plans to impose tighter limits on fuel carbon levels.
This could potentially cost the driver a lot of money.
The Aeronautics Commission estimated a year ago that the new regulations could raise gasoline prices by 47 cents a gallon as refining costs are passed on to consumers. Another study found that pump costs were much higher, at 65 cents per gallon.
The Aviation Commission has now reversed its forecast for a 47 cent increase. It also declined to present revised forecasts.
“What we can’t do is analyze the impact [of the lower carbon standard] It will be determined based on retail gasoline prices,” CARB Director Stephen Cliff told Mitchell of the Times.
So how can a group of unelected regulators arbitrarily adopt new rules without considering the cost to consumers? It doesn’t seem right. It seems a little irresponsible and arrogant.
Perhaps Congress should curb the authority of the Aviation Commission.
One of the standout features of Newsom’s gas spike bill is that it requires the Energy Commission to conclude that the benefits outweigh the costs to consumers before ordering refineries to stockpile fuel.
However, there was intense debate over whether it would be very effective in reducing price hikes when, for example, a refinery is shut down for maintenance.
Oil lobbyists and Republicans argued that if gasoline was taken away from the market and stockpiled, there would be less at the pump and prices would rise. That makes sense.
An Energy Commission spokeswoman said analysts would address this issue when determining how much, if any, fuel should be stored.
The oil industry has been Newsom’s punching bag for the past two years. “There’s a new sheriff in town,” the governor claimed last year, referring to himself. “We brought big oil companies to their knees.”
He boasted of enacting legislation that would create a new oil watchdog within the Energy Committee. The commission was given the power to investigate the oil industry’s books, pave the way for a commission that could set profit limits and punish refineries that exceed them.
But nothing came of the much-hyped caps and penalties. Newsom has a tendency to overpromise and underdeliver.
“This bill helps a little, but overall it doesn’t do much to save consumers money on gasoline prices,” said Severin Borenstein, dean of the Energy Institute at the University of California, Berkeley and an expert on gasoline production. Ta.
“This is not a silver bullet,” the bill’s author, Rep. Greg Hart (D-Santa Barbara), told me. “It’s very targeted to just spikes. It’s innovative, ambitious, and pretty practical.”
Beaver-area Republican Sen. Brian Dahl argued during a committee hearing last week. [gasoline] It’s the state that drives up prices in this state. He noted that California’s gas tax is the highest in the nation. State, local and federal taxes total $1.42 per gallon, Dahle said.
Newsom should ensure that his appointees to the Aviation Commission no longer gouge drivers.
But his refinery reserves seem worth a try. It’s always good to save money.