Gavin Newsom’s Battle to Control Gas Prices
California Governor Gavin Newsom faces a political minefield as he attempts to transition his state away from oil and gas. His plan to address gas prices has drawn criticism from national Republican committees, neighboring governors, and even Democratic moderates within his own party.
The State’s Energy Transition
California is rapidly transitioning to electric vehicles, but gas-powered cars will remain on the roads for decades to come. Newsom is acutely aware of the impact of high gas prices on the electorate, especially with recent spikes exceeding $6 per gallon.
Neighboring States’ Concerns
Newsom’s proposal to require oil refineries to keep more gasoline on hand has raised concerns in neighboring states. Arizona Governor Katie Hobbs and Nevada Governor Joe Lombardo have expressed concerns that the plan could lead to higher prices. The exchange has gained attention from Newsom’s critics, including The Wall Street Journal editorial board.
The Blame Game
Newsom has accused oil companies of manipulating reserves and refinery maintenance to drive up prices. He has proposed a profit cap on refiners and urged the state Energy Commission to impose penalties for excessive profits. However, the industry maintains that California’s policies, such as high taxes and environmental regulations, are the primary factors behind the state’s high gas prices.
A Declining Oil Industry
In-state oil production has declined significantly under Newsom’s leadership. While factors such as lawsuits blocking drilling approvals have contributed, Newsom has also taken steps to limit oil extraction, including suspending fracking and restricting new drilling permits.
The Low-Carbon Fuel Standard
California’s landmark emissions-reduction tool, the low-carbon fuel standard, has resulted in the closure of refineries and the consolidation of the industry. This has reduced the number of refineries producing gasoline in California, contributing to higher prices.
Critics’ Proposals and Newsom’s Response
Republicans and some Democrats have proposed reducing gas taxes or pausing the low-carbon fuel standard updates to address high prices. Newsom has dismissed these suggestions, accusing the industry of spreading “lies” and deflecting blame for the state’s policies.
Balancing Act
Newsom’s policies aim to reduce reliance on fossil fuels while ensuring a stable supply of gasoline for gas-powered vehicles. However, the path forward is fraught with challenges, including potential unintended consequences, environmental concerns, and the interests of neighboring states.
A Test Case for the World
If Newsom’s energy policies succeed, they could serve as a model for other regions grappling with the transition away from oil and gas. Conversely, if they fail, they will provide ammunition for critics and undermine efforts to address climate change.
