While California Governor Gavin Newsom is warning he may call a Special Session of the Legislature to impose additional tax increases on oil companies, it is surprising he professes no idea how gas prices in California are so much higher than other states. Gov. Newsom has the temerity to ask why, and is making grotesque accusations.
This is the last thing suffering Californians need. Californians already pay the highest income taxes the nation, have the highest taxes on the wealthy, highest gas taxes and highest gas prices at the pump, highest housing prices, highest energy prices, most regressive taxes hurting the poor… need we keep going? Gov. Newsom’s latest proposal is a new tax on oil suppliers, and will only serve to make gas prices even higher.
Sen. Shannon Grove boiled down the actual problem of California’s highest-in-the-nation gas prices and gas taxes to this in a letter to the governor:
“With isolated markets, an inability to access additional fuel that meets California’s stringent standards, the most hostile regulatory requirements, the most aggressive environmental policies, the extraordinary expense of cap and trade, the highest tax per gallon of gasoline, impossible standards that are not found in any other state in the nation, and limited supply, there is really no need for additional explanation of why California has the highest and most volatile, gas prices in the nation. Simply put, your [Governor] policies have created this problem and have caused the pain at the pump that is hurting every single California family. In fact, federal judges have continued to throw out cases alleging price conspiracies by the fuel industry finding no basis for the allegations that you continue to levy.”
In 1982, California had 43 operational oil refineries and a population of nearly 25 million; today we have 11 operational oil refineries and a population of nearly 40 million. And these 40 million residents are driving more cars, living in more houses and apartments, working in more commercial buildings, shopping in more stores, and traveling more across the state – all of which takes more traditional energy.
“For those keeping score, prices in California are now $2.56 above the national average and our state budget has grown $100 billion since Newsom took office,” Republican California Assemblyman Kevin Kiley said last week.
“Californians are paying the highest gas prices in the entire nation thanks to the state’s ‘windfall gas tax profits,’” the Globe reported Friday. “The average price for a gallon of gas in the U.S. is $3.891 according to AAA. California’s average price for a gallon of gas is $6.392. Gas in Mono county California is $7.82 per gallon. The average gas price in Los Angeles County California is $6.410 per gallon. The average gas price in Napa County California is $6.56 per gallon. The average gas price in San Luis Obispo County California is $6.554 per gallon. This means Californians are paying a $2.55 premium on gas in many locations.”
The Globe also addressed Gov. Newsom’s claim that oil companies “are ripping you off. Their record profits are coming at your expense.” Newsom left out the part where in 2021 he largely killed hydraulic fracturing for natural gas in California as part of his overall plan to end oil extraction. He also announced his action to halt issuance of fracking permits by 2024.
Gov. Newsom also just signed a package of “sweeping climate legislation” in September to achieve statewide carbon neutrality as soon as possible, and no later than 2045, by establishing an 85% emissions reduction target, capping oil wells, slowing oil and gas permitting, making it impossible to increase refining capacity, and entirely phasing out oil and gas starting in two years. And that’s just the start.
State Senator Shannon Grove, (R-Bakersfield), sent Gov. Newsom a letter schooling him on his attempt to deflect from the real causes of high gas prices in California – Democrat’s policies.
Here is Sen. Grove’s letter to the governor. This should be required reading in every Econ 101 class:
“I write to you today in response to your call for a special session to address high gas prices and to apply a windfall tax on the oil industry. Let me start by saying, I am surprised that you act as if you have no idea how gas prices in California can be so much higher than other states, and that you are making outlandish accusations regarding the oil industry. Sir, please see the explanation below to better understand how California has ended up in the unaffordable green nightmare you have created with your fairytale policies:
- California Democrats have created the most expensive operating environment in the United States.
- California has the most hostile regulatory climate in the United States.
- California Democrats have passed policies that have all but regulated refineries out of business in this state, or forced their closure, therefore limiting gas supply.
- When you shut down refineries, force them out of business, and simultaneously limit supply by withholding over 1000 drilling permits, it should come as no surprise that these actions would directly contribute to the increase of fuel cost in California.
- California is the only state that requires refiners and producers to comply with a cap and trade tax. This tax has yielded over 5 billion dollars thus far and is a cost which is passed onto consumers.
- You have stripped California’s domestic stability and made us reliant on hostile nations by forcing us to import more fuel from foreign countries at the expense of our ecosystem due to the extraordinary release of carbon from vessels that bring us the oil this state so desperately needs and consumes each day.
- California refiners must produce a “special blend” of fuel that meets low carbon fuel standards that are not required in the rest of the nation. This “special blend” is more expensive to produce and limits our ability to access fuel from other states.
“Sir, I may be an Arvin girl born and raised by a single mother but I do not need this simple equation explained to me over and over, and neither does the rest of California. You may try to explain your way out of this crisis by blaming everyone but yourself, but Californians can see a fox explaining what happened to the henhouse when they see it. If you really want to create solutions, reverse the devastating policies you have put in place, ramp up domestic production and make California affordable again.
Considering the solution to this significant issue resides in my own backyard with Kern County oil production, I would be more than happy to walk you through next steps when you are ready to come to the table.”
Remember, California Democrats diddled for 100 days to provide relief at the pump for the state’s drivers from the record high gas prices,” the Globe reported in June. California Democrats abandoned the opportunity for a gas tax holiday, and then announced they were forming a new committee to investigate gas price gouging to make it appear they were doing something.
As for Gov. Newsom’s special session of the Legislature in response to rising gas prices, “We’re hoping to do more with this windfall profits tax to go after big oil,” he said Thursday at the climate change compact signing in San Francisco.
Newsom’s solution is to accuse oil companies of hoarding “windfall profits,” and to impose additional taxes.
This isn’t a climate plan, but a tax plan.
Sen. Grove is right: Gov. Newsom’s and Democrat’s policies have created this problem and have caused the pain at the pump that is hurting every single California family.
Even the LA Times is piling on Gov. Newsom. Breitbart’s Joel Pollak reported Sunday:
“The reliably left-wing Los Angeles Times has published an unusually candid analysis: that California’s policymakers, given ample warnings about the state’s vulnerability to high gas prices, have failed to do anything to address the basic problems that cause them.
“The Times recounted how the state created special committees in the 1990s, and again in the last decade, to deal with the challenges created by California’s “green” regulations and its aggressive environmental rules on the one hand, and market realities on the other.”