With gas prices high, now is not the time for new oil regulations

By Tony Strickland, especially for CalMatters

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Californians are suffering, struggling to cope with the high energy costs that have become a hallmark of life in our state.

And instead of cutting costs, a proposal by regulators to update the state’s “limitation and investment” – designed to limit greenhouse gas emissions – will make matters worse.

Our country is at a turning point. Drivers here pay highest gas prices in the country by a huge margin. Even before the Iran war, pump prices soared, a jump of nearly 40 cents a gallon in February.

In the past six months, one refinery has shut down and another is scheduled to do so in April. This would eliminate nearly 20% of California’s refining capacity and deepen our dependence on imported foreign fuel.

However, the California Air Resources Board, also known as CARB, is moving forward with changes in state climate law which are planned for further increasing pump prices by up to $1 per gallon by 2030.

CARB’s changes would bring California’s few remaining refineries to a standstill up to $9 billion in new compliance costs. This expense is unsustainable and many refineries are unable or unwilling to absorb it. With energy companies already leaving the state, this additional cost burden could cause massive damage to what is left of our energy infrastructure.

Governor Gavin Newsom recently praised California’s transition to an “import model” where fuel is refined out of state and shipped to our market. His plan ignores the fundamental financial, environmental and national disadvantages of outsourcing our energy infrastructure.

Californians are left to pay the cost of producing fuel for foreign companies that operate overseas refineries that produce more pollution than California refineries. This fuel is transported by tankers that pump out carbon on round-the-world voyages to our ports.

In addition, local refineries and related businesses are the backbone of their communities, employing hundreds of workers in well-paying jobs, paying millions in property taxes, contributing to local civic organizations and stimulating the economy. When they close, these benefits disappear.

CARB calls this “leakage” – when demand for a product is strong, but companies decide it’s cheaper to operate outside of California’s environmental mandates and simply ship their goods to our markets.

California needs gasoline, diesel and jet fuel. If our policy puts the refineries out of business, we are forced to get it from somewhere else – whatever the cost.

Also relying on imports leaves us vulnerable to geopolitical disruptions and other factors beyond our control. California depends on Asian refineries to produce our special fuel blend. As these refineries decide to limit exports, the decision to allow foreign control of our fuel supply seems foolish.

With sky-high gas prices, refinery shutdowns and import-reliance issues highlighted by the war in the Middle East, California can’t go wrong.

CARB members should slow down and reconsider their proposal with a plan that protects the state’s energy infrastructure while avoiding huge new costs for fuel producers. Rushing through a proposal to meet an arbitrary emissions reduction target is reckless, with real consequences for working Californians who can least afford it.

Most people can’t afford it new electric vehiclewith starting prices around $55,000. They cannot choose not to go to work or take their children to school.

When gas becomes too expensive, working families are forced to cut back on groceries, straining family budgets and pushing the California dream out of reach.

That’s the real cost of California’s cap-and-invest proposal.

This article was originally published on CalMatters and is republished under Creative Commons Attribution-NonCommercial-No Derivatives license.