Here we go again.
Another year, another special session – and another round of Governor Newsom’s gas price blame game that fails to solve any actual problems.
This time around, the governor – fully unable to show “price gouging” by oil companies drives high costs at the pump, despite his repeated claims and loads of new data on the subject being collected by the state Energy Commission – has pivoted to refinery storage.
As Tom Philp put it in the Sacramento Bee:
“Twenty-four years after state experts noted that low inventories of gasoline in California could lead to higher prices, Gov. Gavin Newsom has discovered the problem and launched a special legislative session to deal with it.
Instead of a deliberative process that started years ago, the administration is cobbling together a bill at the last minute that raises more questions than answers.”
Dan Walters was no less skeptical of Newsom’s charade in CalMatters, with a headline reading “Gavin Newsom can’t prove price gouging at the pump but wants new refinery law” and a lead statement not lacking in candor:
“It’s time to blow the whistle on the farcical efforts of California’s politicians – especially Gov. Gavin Newsom – to reduce the state’s high gasoline prices.”
Indeed, Newsom’s refinery storage gambit can’t be taken seriously as a gas price-reducing proposal when his government’s own experts at the Energy Commission warn that the policy could “artificially create shortages in downstream markets” and “increase average prices” at the pump.
Piling on are Governors Katie Hobbs of Arizona and Joe Lombardo of Nevada. The bipartisan duo wrote Newsom to express their concerns about the “regional implications” of his special session proposal:
“Despite ongoing conversations about the root causes of rising fuel costs, it is evident that increased regulatory burdens on refiners and forced supply shortages will result in higher costs for consumers in all of our states. With both of our states reliant on California pipelines for significant amounts of our fuel, these looming cost increases and supply shortages are of tremendous concern to Arizona and Nevada.”
Californians will know Sacramento is serious about addressing the root causes of high gas prices when – hopefully one day soon – their leaders start recognizing the reality of basic economics.
The Golden State has allowed its production capacities for transportation fuels – from crude production through to gasoline and diesel refining – to dwindle despite continued high demand. When supply falls short, prices go up.
With his storage proposal, Newsom is trying to slap a shortsighted band-aid on a bullet wound that has existed for decades. Mandates keeping fuel products in storage will not fix California’s fundamental gasoline supply shortfall.
