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California’s green governor is mystified by state’s high gas prices

California’s green governor is mystified by state’s high gas prices

The “mystery surcharge” being cited by state officials may be the result of California’s “most demanding set of fuel policies in the world”

https://www.youtube.com/watch?v=u4pXtFOU6eY

Legal Insurrection readers may recall that the 2018 election results in California resulted in both a highly progressive governor and the retention of a gas tax after the repeal effort failed.

Yet, our state’s leading politician is mystified at the California’s record-setting gas prices.

Gov. Gavin Newsom wants to know why California’s gasoline prices are higher than in the rest of the country, blaming potential “inappropriate industry practices” Tuesday rather than the state’s higher taxes and tougher environmental regulations.

Newsom asked the California Energy Commission for an analysis of the state’s gas prices by May 15. California drivers were paying an average of $4.03 a gallon Tuesday, or $1.18 more than the national average, according to AAA.

Higher taxes, along with a combination of tougher gas standards and environmental regulations, normally account for about 70 cents of that difference, said Gordon Schremp, a senior fuels specialist with the California Energy Commission. But the rest is a mystery.

Perhaps Newsom can start by looking at the state’s fuel policy. For example, one analysis shows that the mandates for area and regional blends cost extra to produce, and those costs get passed on to the consumer.

Fueling California, a coalition of major industries doing business in the state, initiated the study to provide the governor’s office, legislators, decision-makers, regulators, the media and the public with more information and a greater understanding of the state’s volatile fuel costs and to outline policy changes that could help ease the financial burden in these tough times.

The study shows that California has among the most demanding set of fuel policies in the world, leading to a myriad of distinct fuel standards and blends.

Californians pay five to 15 cents extra per gallon solely due to the special blends required in the state. While these special blends help the environment, they also can cause price spikes when supplies run low.

As our fuel standards grow increasingly differentiated from the rest of the country, it also is harder to find supplies that comply with state regulations. This effectively renders California a “fuel island” since we also have no pipelines linking us to petroleum or crude oil supplies, and our storage capacity is limited.

Another contributing factor is Sacramento’s seeming desire to commit energy suicide. An assembly bill is now being considered that would would increase setback distance between oil production facilities and private and public property to 2,500 feet for every well, existing or planned in California.

The requirements would essentially shut-down fuel and oil production in the state.

According to the Western States Petroleum Association and the California Independent Petroleum Association, this bill, if passed, would effectively end oil production in many parts of the state and threaten the future of production IN ALL PARTS OF THE STATE, for example:

  • 87% of all wells in the City of Los Angeles would be shut in
  • 66% of the well in Los Angeles County would be shut in
  • Thousands of wells in Kern County will be shut in

Reducing the output of a product essential for daily life tends to drive the price up.

Finally, the fuel and oil companies are not charities. They need to make money, which they use to invest in creating more product and researching ways to make the industry safer and more “environmentally friendly.”  It’s called profit.

Here is the analysis that identifies the “mystery surcharge“.

  • Federal excise tax — 18 cents
  • State excise tax — 42 cents
  • State and local sales tax — 8 cents
  • State underground storage tank fee — 2 cents*
  • Additional costs for compliance under Cap & Trade, as well as the Low Carbon Fuels Standard — 28 cents
    Total — 98 cents

. . . .  Severin Borenstein, a professor at UC Berkeley’s Haas School of Business and faculty director of the Energy Institute at Haas, said his own tax calculations came within a penny of that total. But the mystery surcharge — an added expense that has yet to be identified — has averaged 28 per cents a gallon from January through March of this year. When added to the taxes, that brings the total to about $1.26 a gallon.

Newsom and his administration clearly do not understand capitalism. I do not begrudge oil companies their earnings, given how much the state takes out in taxes. At least I’m getting something for my money!

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Comments

The next fire will be a real party. The utility company California is blaming for a wildfire says it will shut off all power to over a million customers to preserve the sacred land.

Live the Green Dream California.

    rdmdawg in reply to dystopia. | April 29, 2019 at 3:00 pm

    Build a wall around that shithole of a state and quarantine it in preparation for jettisoning it from our union of states.

In addition to all of the environmental craziness, there is one other reason for high gas prices here. Apparently, we have fewer independent gas stations than other parts of the country, and thus less competition to drive prices down.

    MattMusson in reply to Ann in L.A.. | April 29, 2019 at 6:36 am

    California has refused to build a pipeline to the Southwest to take advantage of low cost fracked crude. So, they are the ONLY US state that still buys significant amounts of MIDDLE EASTERN CRUDE.

    And, since Iranian crude is being forced off the Market, California’s oil costs are going up.

    Just wait until Iran hits the Saudi oil lines in retaliation. Then, not only will the price Skyrocket – California will be the only state that has oil shortages.

Newsom is full of crap.

How California survived jerry brown is amazing. Now this malignant clown.

Jerry Brown was actually sane, compared to the rest of the CA Dems.

    Arminius in reply to Ann in L.A.. | April 28, 2019 at 6:54 pm

    Jerry Brown was never sane. He was the beginning of the end back in the seventies. He was the end of the end during his last term.

    I was in Kali when gas hit $8/gallon. I recall a lady shrieking, What are they doing to us.” I believe she meant the oil companies were screwing her over. I was laughing. Oh, you don’t know about taxes? What do you mean, “They?” You mean, “You.” You voted for this sh*t. I voted, too. With my feet. Got the h2ll out of dodge. And no I didn’t bring any STDs with me to Texas. Stater Transmitted Diseases. I don’t care how badly the socialists tell me we need a tax increase I’m voting it down.

pablo panadero | April 28, 2019 at 7:04 pm

They don’t like $4.00 gasoline that they can buy. They will do some government mandating, pat themselves on the back, and find that the gas is now $3.00, but no one can buy it.

I’m old enough to remember when Moonbeam was dating Linda Ronstadt. H3ll, I’m old enough to remember Linda Ronstadt.

How does this happen?

    TrickyRicky in reply to Arminius. | April 28, 2019 at 8:28 pm

    I feel your pain, the last 40 years really flew by. She may be a screaming lib, but the girl had pipes.

      Arminius in reply to TrickyRicky. | April 29, 2019 at 12:44 am

      It seems like it was just yesterday I was buying tequila for a young lady entering a best legs contest. I thought it was just your average stage fright. The she got got on stage, up above me, and I’m, “Hey, she’s not wearing any underwear!”

      The other girls in the contest got ticked off. They were like, “Best legs. Legs. LEGS. What part of this don’t you understand?”

      I don’t have fun like this anymore.

        Arminius in reply to Arminius. | April 29, 2019 at 12:55 am

        All of a sudden they couldn’t compete.

        Ladies. You don’t need to take your pants off for me to like you. I actually like you with your pans on.

I passed through California in 2004 and was shocked at the gas prices. I couldn’t believe that regular was $2.11. My how things have changed.

https://imagizer.imageshack.com/v2/640x480q90/921/aJhLMw.jpg

Oh to live not just in La La Land, but the La La State, where politicians not only routinely ignore the real world impacts of their actions, but don’t even understand how free markets work.

Subotai Bahadur | April 28, 2019 at 8:13 pm

Ah! La Republica Popular Socialista y Multicultura y Multisexual de California

Any remaining Americans there need to get out, now while they can. It is not part of our country, and is not friendly to our country. It will not be until it is reconquered. Also, y’all might want to read Kurt Schlichter’s books, especially “People’s Republic”. That is the benign view of California’s future.

Subotai Bahadur

    Yeah, my brother lives in the northern part of the state. He can’t leave yet because of his job but my husband and I offered him several acres to build a house when he’s ready. I hope he takes us up on it. Retiring in California has to be a lot like going to prison.

The idea of Cap and Trade is to make the gas more expensive so people use less of it. So now the people complain that the gas is more expensive?

    randian in reply to RodFC. | April 28, 2019 at 9:52 pm

    How much of the average person’s daily driving is really optional? Very little, I’d bet. Gas gets much more expensive but consumption doesn’t drop at all. The actual point of cap and trade is to increase tax receipts for the government, but in a way that private industry can be blamed for the price increase. If cap and trade actually reduced consumption tax receipts would go down because gas taxes are per-gallon (though California is one of the few states that also levies sales tax on gas, which includes sales tax computed on the included excise taxes).

      amatuerwrangler in reply to randian. | April 28, 2019 at 10:50 pm

      The breakdown of taxes, etc in the post above (courtesy OC Register)
      appears to be talking in a per-gallon frame of reference. CA state sales tax hovers in the 8% to 8.5% range. (Many cities and counties have small local tack on amounts, often 0.25%, so the tax is not uniform throughout the state). The sales tax is computed on the sale price (which as noted above includes the excise taxes), so how can the sales tax on a gallon of unleaded regular be only 8 cents; at $4 a gallon it should be 32 cents. Unless there is some oddity jn the taxing of gasoline, which I doubt knowing CA as I do. That could explain the “mystery” surcharge.

      I hope someone with a better knowledge of the actual computational fact will chime in and educate us all.

Here’s how I know I’m not a racist. Because if I were a racist, I’d have to wonder if the Buddhists were right all along. And we’re all going to be reincarnated.

And I’ll come back as a pilot, and I’ll be flying a plane named “White Privilege.”

And my plane captain is going to be a black guy.

Every time I launch I’ll have t o wonder, “Did that guy arm my ejection seat?”

That was the first original thought I had in a quarter of a century. How did I do?

I’m channeling Don Rickles. Which JFC tells you I’m old. One of the influences that caused me to join the Navy was Don Rickles in Run Silent, Run Deep.

OK, good one Jewish people. And I don’t hate you. I want to learn the secret to your sorcery.

LeftWingLock | April 29, 2019 at 8:36 am

I suspect Trump has ordered gasoline deliveries to California be halted in order to “punish” CA for being true Americans. I think Governor Newson should subpoena all of the DOE records for the past 2 years to prove Trump’s involvement and guilt.

    txvet2 in reply to LeftWingLock. | April 29, 2019 at 3:12 pm

    Thanks. A little pseudo-leftist humor is always appreciated. Next, of course, Newsome should appoint a special prosecutor to investigate the charges. How about Mueller? I hear he’s looking for a job.

    BTW, what do you think about PG&E’s proposal to start cutting off electricity to a million or so Californians every time the wind comes up? Should be good for a few laughs, especially after the first week or so, when everybody starts running out of food.

    “…“punish” CA for being true Americans.”

    Laughing my butt off. They may be citizens (some anyway, many not even that), but they most definitely aren’t Americans (maybe 30% are Americans).

    Oh, I know, you mean South Americans. That is probably correct.

Fewer independent gas stations because some years ago the state drove many of them out of business by mandating replacement of their underground gasoline storage tanks by more environmentally satisfactory models. Hugely expensive, unaffordable for many. So you see, Ann, the greenies there too.

    B Buchanan in reply to Jwest. | April 29, 2019 at 11:25 am

    I remember that! I had forgotten!

    Gosh we just keep punching ourselves in the face and then wondering why it hurts.

I still laugh at Cali. I remember reading about PG&E going to declare bankruptcy due to the lawsuits.
One of the greenie weenie heads bemoaned that no one would be left to pay into their little slush fund to continue with their sjw projects for the urf.
I agree, build the wall and go all the way up the left coast.

I want to laugh at the horse I rode in on

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