California, its political class fixated on an unattainable net-zero carbon emissions transportation sector, has been laboring for years under a low carbon fuel standard. This monster was created by the Global Warming Solutions Act of 2006. To comply with the LCFS fuel producers are required “to reduce the carbon intensity of fuels sold in California. The standard also “encourages the production of renewable alternatives by requiring higher carbon fuel producers to buy credits from companies that sell cleaner fuels if they miss the mandated targets.”
Despite the harm it has caused since it was established in 2007, the LCFS has yet to do its worst damage. Amendments to the low-carbon fuel standard proposed by the California Air Resources Board will no doubt increase refineries’ production costs. The direct cost borne by a “typical refinery” in 2024 is expected to be $93 million. That will grow to $1.13 billion next year and $1.22 billion in 2026. By 2046, that “typical refinery” will have incurred $27.42 billion in additional operating costs.
Of course the refiners will pass on their additional costs to consumers. This means, says CARB, gasoline prices could potentially spike next year by 47 cents “relative to the baseline,” diesel by 59 cents a gallon, and jet fuel by 44 cents a gallon.
Increases in 2026 are estimated to be 52 cents, 66 cents and 50 cents a gallon for each of those fuels over the baseline. A year later, the prices are expected to jump 49 cents, 62 cents and 47 cents per gallon, again over the baseline established by CARB.
The pain is expected to ease a bit starting in 2027. The relief, however — if it can be called that — won’t last long.
“On average, from 2031 through 2046 the proposed amendments are projected to potentially increase the price of gasoline by $1.15 per gallon, potentially increase the price of diesel by $1.50 per gallon and fossil jet fuel by $1.21 per gallon,” says CARB.
No need to worry about it, though, says the board. The Sacramento Bee reports that the CARB staff has downplayed the gas price hike projections, “calling them ‘narrow and incomplete.’”
CARB also suggests Californians just buy more battery-powered cars so they can smugly drive by all those gas pumps with their digital display totals spinning too fast to keep up with. The agency is focused “on cost savings to drivers across the economy as more people make the switch to EVs,” says the Bee, rather than following a more modest regulation framework. What it is not focused on are the higher electricity costs that are ahead as more EVs drain power from the grid, resulting in rising prices at the plug rather than the pump.
Also ignored are concerns about street and highway repair and expansion. If fewer Californians are paying fuel taxes at the pump, how does the state generate enough revenue to fill potholes? Compounding matters, electric vehicles, due to their weight, are far harder on roads than gasoline and diesel vehicles that are in the same class, inflicting twice as much ruin.
Not so long ago, the fall of 2022 in fact, California’s governor was demanding a punitive “windfall tax on oil companies.”
“We’re not going to stand by while greedy oil companies fleece Californians,” said Gavin Newsom.
A couple of months later, legislation to punish oil companies when profits exceeded a politically set threshold was introduced during a special session. When Newsom signed in March 2023 a bill creating “a dedicated, day-in and day-out, independent watchdog to root out price gouging by oil companies” and authorizing the state Energy Commission “to create a penalty to hold the industry accountable,” he bragged that “California took on Big Oil and won.”
So who’s going to take on Big Bureaucracy and protect consumers from decisions made by an unelected board, and lawmakers who have prostrated themselves to radical eco-activists? Because they’re being run over time and again by an agenda that is beyond reason.
Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute.
Click to read the full article in the Times of San Diego.
As Gas Prices Rise in California, Could Even More Pain at the Pump Be Coming?
Kerry Jackson
When Californians voted on Super Tuesday, they paid an average of $4.85 for a gallon of regular gasoline, according to the American Automobile Association.
For now, the nation’s highest gas prices are a relative bargain. But by Memorial Day, the unofficial kickoff of the summer driving season, California gasoline prices will likely “get close to, if not exceed, $5 a gallon,” says Patrick De Haan of gasbuddy.com.
As troubling as that is, things are likely to grow worse within a year. Much worse.
California, its political class fixated on an unattainable net-zero carbon emissions transportation sector, has been laboring for years under a low carbon fuel standard. This monster was created by the Global Warming Solutions Act of 2006. To comply with the LCFS fuel producers are required “to reduce the carbon intensity of fuels sold in California. The standard also “encourages the production of renewable alternatives by requiring higher carbon fuel producers to buy credits from companies that sell cleaner fuels if they miss the mandated targets.”
Despite the harm it has caused since it was established in 2007, the LCFS has yet to do its worst damage. Amendments to the low-carbon fuel standard proposed by the California Air Resources Board will no doubt increase refineries’ production costs. The direct cost borne by a “typical refinery” in 2024 is expected to be $93 million. That will grow to $1.13 billion next year and $1.22 billion in 2026. By 2046, that “typical refinery” will have incurred $27.42 billion in additional operating costs.
Of course the refiners will pass on their additional costs to consumers. This means, says CARB, gasoline prices could potentially spike next year by 47 cents “relative to the baseline,” diesel by 59 cents a gallon, and jet fuel by 44 cents a gallon.
Increases in 2026 are estimated to be 52 cents, 66 cents and 50 cents a gallon for each of those fuels over the baseline. A year later, the prices are expected to jump 49 cents, 62 cents and 47 cents per gallon, again over the baseline established by CARB.
The pain is expected to ease a bit starting in 2027. The relief, however — if it can be called that — won’t last long.
“On average, from 2031 through 2046 the proposed amendments are projected to potentially increase the price of gasoline by $1.15 per gallon, potentially increase the price of diesel by $1.50 per gallon and fossil jet fuel by $1.21 per gallon,” says CARB.
No need to worry about it, though, says the board. The Sacramento Bee reports that the CARB staff has downplayed the gas price hike projections, “calling them ‘narrow and incomplete.’”
CARB also suggests Californians just buy more battery-powered cars so they can smugly drive by all those gas pumps with their digital display totals spinning too fast to keep up with. The agency is focused “on cost savings to drivers across the economy as more people make the switch to EVs,” says the Bee, rather than following a more modest regulation framework. What it is not focused on are the higher electricity costs that are ahead as more EVs drain power from the grid, resulting in rising prices at the plug rather than the pump.
Also ignored are concerns about street and highway repair and expansion. If fewer Californians are paying fuel taxes at the pump, how does the state generate enough revenue to fill potholes? Compounding matters, electric vehicles, due to their weight, are far harder on roads than gasoline and diesel vehicles that are in the same class, inflicting twice as much ruin.
Not so long ago, the fall of 2022 in fact, California’s governor was demanding a punitive “windfall tax on oil companies.”
“We’re not going to stand by while greedy oil companies fleece Californians,” said Gavin Newsom.
A couple of months later, legislation to punish oil companies when profits exceeded a politically set threshold was introduced during a special session. When Newsom signed in March 2023 a bill creating “a dedicated, day-in and day-out, independent watchdog to root out price gouging by oil companies” and authorizing the state Energy Commission “to create a penalty to hold the industry accountable,” he bragged that “California took on Big Oil and won.”
So who’s going to take on Big Bureaucracy and protect consumers from decisions made by an unelected board, and lawmakers who have prostrated themselves to radical eco-activists? Because they’re being run over time and again by an agenda that is beyond reason.
Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute.
Click to read the full article in the Times of San Diego.
Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.