The CNN story focuses on “A number of refinery outages” having caused the recent spike, but that’s just blaming a temporary event for what is simply a long-term, probably permanent reality for residents of California. He attended Texas A&I University and The University of Texas, earning B.A. California experienced a gas price surge to $3.29 a gallon in July. And to be fair, these policies have been implemented by elected officials, and thus presumably endorsed by the voters who elected them. With its policies of high gasoline taxes, special gasoline requirements that increase the cost of refining and transportation, and other programs supposedly designed to reduce smog and haze, higher gasoline prices are an inevitable outcome. And these costs will increase. Also youth leaders from the recent Climate Strike participate. (Photo by Ole Jensen/Getty Images). But he already knows why gas prices are so high in California. GasBuddy listed San Luis Obispo County’s average gas price of around $4.34 per gallon as the second-highest in California as of Sunday, Oct. 6. Gavin Newsom is demanding that the California Energy Commission investigate why gas is so expensive and report back to his office by May 15. But after the election and before Obama took office, gas prices dropped below $2.00 a gallon. State government regulations on oil production in California have added even more to the price of gasoline paid by Golden State drivers. But he says California has become so accustomed to these spikes that four-dollar gas doesn’t really deter drivers anymore. Gasoline price experts say there are a number of reasons for that. This too is expected to increase in the coming years. All Rights Reserved, This is a BETA experience. One outcome of that is that the mayors and city councils of several of Texas’s major cities - San Antonio, Austin, and Houston - either already have or are now on the verge of adopting cookie-cutter “Climate Action Plans” that would implement many of the same cost-increasing California policies. But the national average was $2.14, a 33-cent drop. The state has also adopted policies, like requiring cars sold in their state to have higher mileage requirements per gallon than the national requirements, that already make buying a car in California more costly than doing so in other states, and will only increase that disparity into the future. 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. In yet another ranking where number one is not a good thing, Californians now pay the highest combined state and federal gasoline taxes in the nation. In recent years, states like Arizona, Colorado, Montana, Nevada and Texas have seen thousands of ex-Californians move into their cities. We begin with taxes. No conspiracies required. So let’s unpack this idea that government is mostly to blame, along with my view that regulations tend to produce excess profits for the good folks who refine crude oil and distribute gasoline. Most of what makes gas more expensive in the Bay Area is true statewide as well: The price is high because of higher taxes and stricter environmental restrictions. Refinery issues in California can send prices spiking at that state's gas pumps almost immediately, because most California gasoline is produced within the state to meet tough anti-smog standards. Also youth leaders from the recent Climate Strike participate. That compares to a national average of $2.65, and average Texas price of $2.305, according to data kept by AAA. From the United Nations participate Secretary General Antonio Guterres who also meets the Danish Prime Minister and the Queen of Denmark during the Summit. The average gas price in California has hovered around $4 per gallon for most of the week. Related: The World's Most Expensive Crudes Get Expensive Again. Sponsored. The purpose with the summit in Copenhagen is to build a global coalition of leading cities, businesses and citizens that rallies around radical and ambitious climate action. According to AAA, the average gas price in California was $4.18 per gallon as of October 7. 2016 While the CNN story focuses on this recent spike, the reality is that the lowest price Californians have experienced during 2019, according to the U.S. Energy Information Administration (EIA), came during the week of January 28, when the price for a gallon of regular averaged $3.206. Fuel Insights ranked California as having the most expensive average price per gallon of gas at around $4.18 as of Oct. 6. They point to issues with a Chevron refinery in El Segundo and a shutdown at a Shell refinery in Martinez, as well as complications from PG&E’s blackouts shutting down some gas stations that are unable to pump gas without electricity. Evil Oil Speculators. But, taxes alone cannot account for California’s high gas prices. San Francisco’s figures are slightly higher, reaching $4.09 on Friday. Right now, California is home to the highest gas prices in the United States. Gasoline prices in Los Angeles are nearing the psychologically significant $4 per gallon mark. I can buy untaxed gas right now for $1.20/gal and diesel for $1.48. The purpose with the summit in Copenhagen is to build a global coalition of leading cities, businesses and citizens that rallies around radical and ambitious climate action. © 2021 Forbes Media LLC. So, do Californians really understand that they actually voted for the policies that are causing many of them to flee their home state? So, this is a long-term reality for Californians, not some short-term event. In fact, California has some of the strictest pollution standards in the nation. in accounting in 1979. Newsom's letter makes no mention of taxes or state regulations. Gasoline sold in California costs more than in the rest of the U.S. — sometimes dramatically so. Maore than 70 mayors of some of the worlds largest and most influential cities representing some 700 million people meet in Copenhagen from October 9-12 for the C40 World Mayors Summit. (Photo by Ole Jensen/Getty Images), EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, The Risks And Rewards Of A Massive Fracking Campaign Planned For The Powder River Basin Of Wyoming, Keeping Afloat In A Minefield Of Cybersecurity Threats, How To Light A Fuse Under The Green Hydrogen Economy, S.E.C. On top of the more expensive fuel come California’s gasoline taxes — the highest in the country. One outcome of these policies intentionally designed to increase the cost of living in California has been a large number of residents fleeing that state for less expensive environs. California’s combined state and federal taxes add 59 cents to each gallon of gas at the pump. But the real reason we’re paying so much more is high taxes and expensive regulations imposed by Sacramento politicians. Prices at the gas pump are rising as maintenance work at refineries is squeezing supply. 18 Midwest refinery problems sent California's oil elsewhere. This drove gas prices to $4.11 a gallon. Benjamin Franklin was right that “nothing is certain but death and taxes,” though he could have added a third certainty in California – paying significantly more than the national average for gasoline. Why Are California Gas Prices So High These Days? He is the resident energy expert on the "In The Oil Patch" radio program, and executes frequent public speaking engagements around the state of Texas and at conferences. California drivers are living a real life version of the movie “Groundhog Day”, more than $4 per gallon for gasoline. Only Mono County has a higher average price per gallon of gas, at around $5.10 per gallon. The result is that the U.S. is similarly getting hammered by higher gas prices, although not nearly as badly as in Canada. Center for Medical Economics and Innovation, Terms and Conditions of Attendance at PRI Events. Higher gasoline prices are just one part of the California government’s plan to make automobile travel much more expensive as time goes on. Which is why it’s so surprising that California Gov. According to the American Petroleum Institute, Californians now pay 80.45 cents per gallon in total federal and state gasoline taxes (including federal and state excise taxes). Interestingly, the influx of Californians is contributing to a shift in the political balance in Texas and those other states, as the Golden State refugees continue to vote for the same kinds of policies that caused them to flee their former home state in the first place. From the United Nations participate Secretary General Antonio Guterres who also meets the Danish Prime Minister and the Queen of Denmark during the Summit. About 97 cents of the current cost of gasoline in California per gallon goes to taxes. According to the American Petroleum Institute, Californians now pay 80.45 cents per gallon in total federal and state gasoline taxes (including federal and state excise taxes). Location, sales taxes and environmental regulations. EIA’s explanation of why gas prices in California are so high: “California gasoline prices are higher and more variable than prices in other states because relatively few supply sources offer California’s unique blend of gasoline outside of the state. Since it doesn't have major pipelines from other regions, California had to wait for tankers with imported oil to arrive. That’s not to necessarily say that policies in Texas are inherently superior to those in California, but they definitely are cheaper for consumers. COPENHAGEN, DENMARK OCTOBER 10: Michael Bloomberg (L), Mayor of New York City and President of the ... [+] C40 Board together with Anne Hidalgo, Mayor of Paris and outgoing Chair of C40 Cities and Eric Garcetti, Mayor of Los Angeles and new chair of the C40 Cities during the C40 World Mayors Summit hand over of the chair on October 10, 2019 in Copenhagen, Denmark. Gas was selling for $3.21 on average in California as of Sunday, a 28-cent drop over the past month. Even in Hawaii, normally the most expensive, prices were about 20 cents a gallon cheaper. He is currently Associate Editor for Shale Magazine (www.shalemag.com), a contributor on energy-related matters at Forbes.com, and a feature writer for World Oil Magazine. In addition to client-related work, David also maintains a growing media communications practice. Governor Gavin Newsom, a supporter of recently imposed gas tax hikes has now called for an explanation for the state’s high gas prices. A December 2018 report by California’s nonpartisan Legislative Analyst’s office predicts that the low carbon fuel standard will increase to approximately 46 cents per gallon by the year 2030. Others, including many politicians on the left and television pundits like Bill O’Reilly, have found their target in oil and gas speculators. To draw an analogy, California car drivers are the proverbial frog who is being boiled. Thank Sacramento. Their voting patterns in their new, adopted states indicate that they really don’t. A 2018 study sanctioned by the Sacramento Bee found that, since 2001, “about 410,000 more people (about the population of Oakland) have left California for the Lone Star State than arrived from there.”. David Blackmon is an independent energy analyst/consultant based in Mansfield, TX. The price increased by 5.6 cents per gallon on July 1 thanks to another gas tax increase courtesy Senate Bill 1, the $52 billion gas tax increase enacted by the Legislature in 2017. Global demand in 2008 was actually down and global supply was up. Adopted as part of California’s efforts to address global warming, the state’s low carbon fuel standard currently adds around 16 cents per gallon to the price of gas. A number of refinery outages tightened gas supply in the market. Currently, the state's average cost for gas is $4.14 per gallon while the national average is $2.65 per gallon. In fact, even with the tax increase, Californians will still not be the highest-taxed when it comes to refined oil. Why gas is so expensive, when oil isn't Prices at the pump may soon set a record, but analysts say U.S. oil prices and gas prices from 2008 don't reflect the true cost of crude. David Blackmon is an independent energy analyst/consultant based in Mansfield, TX. Gas prices in San Luis Obispo County, California, are the most expensive in the United States on Friday, June 28, 2019. The recession was the real cause. Opinions expressed by Forbes Contributors are their own. The text or links to all of David’s writings and podcasts can be found at www.dbdailyupdate.com. Separately, the controversial cap-and-trade program, which was extended by the State Legislature in 2017, is estimated to add about 13 cents per gallon presently to the price of gas, according to the Legislative Analyst’s office. These policies are designed to encourage car-pooling and the use of modes of public transportation, whose buses and incredibly costly commuter rail cars today travel mostly empty. An October 8 CNN story about gasoline prices carried this headline: “California gas prices soar above $4, reaching the highest price in five years.” One can only wonder if most Californians understand that that is all part of their state government’s plan. California’s state and city governments are also going about implementing policies that will reduce the number of automobile-traffic lanes and one-way downtown streets in order to force drivers to spend more time sitting at traffic lights and in traffic jams. The cleaner-burning gas is more expensive to produce, so California sees an increase in prices of about 10 to 15 cents per gallon. Golden State gasoline currently costs more than any other state in the union, according to AAA. Once again, angry California drivers are asking why they are paying so much more per gallon of gas than drivers in other states? The price increased by 5.6 cents per gallon on July 1 thanks to another gas tax increase courtesy … Right now, gas in Sacramento is 25.3 cents cheaper than it was a month ago, but 14.7 cents more expensive than a year ago, according to GasBuddy. The average price of regular unleaded gasoline in Fresno on Thursday was $3.83 per gallon, according to the AAA Gas Price report. Even subtracting out the rather high taxes on gas in California, that Costco in Simi Valley was still charging DOUBLE what a lot of Costco’s in other parts of the country are charging once you subtract out their taxes. Maore than 70 mayors of some of the worlds largest and most influential cities representing some 700 million people meet in Copenhagen from October 9-12 for the C40 World Mayors Summit. But the real reason we’re paying so much more is high taxes and expensive regulations imposed by Sacramento politicians. They note that the Golden State experienced a 16 cent per gallon jump in just one week. But that’s not all. In contrast, the national gas price average was $2.65 per gallon, which represents a spike of 9 cents per gallon over the previous month, but is 26 cents per gallon cheaper than the national average price in October 2018, according to AAA. According to GasBuddy, California already has the highest gas prices in the country at an average of $3.77 per gallon for regular gas, an increase of 49 cents over last month’s average. GasBuddy ranks California highest in the nation in gas prices, and among the country’s highest gas taxes are a major factor in why we pay so much at the pump – but there are other government policies that combine with these high taxes to make the situation … Texans paid $1.962 during that same week. Gas prices are spiking in California, causing angst among drivers. In San Francisco, the average gas price hit $4.27 a gallon as of mid-afternoon Monday, according to AAA, which tracks the figures. C40 Board together with Anne Hidalgo, Mayor of Paris and outgoing Chair of C40 Cities and Eric Garcetti, Mayor of Los Angeles and new chair of the C40 Cities during the C40 World Mayors Summit hand over of the chair on October 10, 2019 in Copenhagen, Denmark. Oil consumption decreased from 88.42 million barrels per day in the fourth quarter of 2007 to 87.94 million bpd in the first quarter of 2008. Tim Anaya is the Pacific Research Institute’s communications director. During this time, David has led numerous industry-wide efforts to address a variety of issues at the local, state and federal level, and from April 2010 through June 2012, he served as the Texas State Lead for America’s Natural Gas Alliance. For the week of October 4, the average California price for a gallon of regular reached $4.18. You may opt-out by. If robust world demand increases the price of gas, it would not have dropped in late 2008. Why are fuel costs so high? California taxes on gasoline involve a combination of state and local charges: Yes, as AAA notes, some of the answer is explained by supply and demand. David has enjoyed a 39-year career in the oil and gas industry, the last 23 years of. David has enjoyed a 39-year career in the oil and gas industry, the last 23 years of which were spent in the public policy arena, managing regulatory and legislative issues for various companies, including Burlington Resources, Shell, El Paso Corporation, FTI Consulting and LINN Energy. Probe Of Exxon Renews Focus On Company’s Resistance To Write-downs, The State Of U.S. Shale: What You Need To Know As 2021 Dawns, Pepsico Pledges Net-Zero Emissions By 2040, Clean Trucks Can Deliver Biden’s Goals For Climate, Jobs, and Equity, Prince Charles Wants Companies To Raise $10 Billion For His Earth Charter. Higher gasoline prices are just one part of the California government’s plan to make automobile travel much more expensive as time goes on. It was the first time the state had the highest price in the country. 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