California Fails on Gas Prices

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    The Times recounted how the state set up separate committees back in 1990s and then again in the past decade, to tackle the problems that were created from the state's “green” regulations and its strict environmental regulations on one hand, and the market realities on other.

    The Times noted Friday:

    California officials have been repeatedly given warnings over the past two decades about the unique mixture of gasoline that is prone to shortages in supply and sudden price hikes.

    However, despite numerous reports and committees of special interest, California has struggled to find solutions while trying to reduce its dependence on fossil fuels.

    Gov. Gavin Newsom's choice last week to change fuel blends early to the state's simpler and more affordable winter fuel blend is credited with bringing small ease at the pumps. However, experts say the move alone isn't enough to address an issue that is revolving around high levels of crisis. The cost of one gallon of gasoline is significantly higher than $6 in California, around 70% more expensive than the nation's average according to the American Automobile Assn.

    Newsom has blamed the oil and gas industry for the recent surge in prices to record prices, even though much of the country has had an albeit modest drop in prices from the peak in late April. As a spokesperson for Valero, the company that manages two of California's 11 refineries, recently said in an open letter addressed to the California Energy Commission, “market drivers of supply and demand, together with government-imposed costs and specifications,” are the primary reasons behind the rising prices in California and referenced an earlier federal court decision which ruled out allegations of collusion in the business.

    Furthermore, he stated, “California is the most challenging market to serve in the United States” due to of rules that require a specific mix of gasoline; its environmental laws; and also because policymakers in the state have made it more difficult to run refineries, which has limited the supply of gasoline in times of crisis.

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