California’s self-inflicted gas shortage

California Gas PricesBy Rebekah Rast — In September 2008, before Barack Obama was elected president and Steven Chu appointed Department of Energy Secretary, Chu stated, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”

Thanks in large part to strict pollution limitations and refinery and pipeline misfortunes, one state is now much closer to those levels.

Gas prices hit an all-time high in California at an average of $4.6140 a gallon, due to a reduced supply and a volatile market.

California has some of the most stringent fuel regulations in the nation; making it so no other energy markets can step up to take some of the burden off consumers needing to fill up their gas tanks. Therefore, if a refinery goes down, Californians are left with little choice but to pay a premium price for gasoline.

Unfortunately this is just one more crisis—of a very long list—that California has brought on itself by its own unabashed actions.

The Wall Street Journal reports that “over the last two decades four refineries in the state have shut down rather than invest in expensive upgrades to comply with fuel regulations.”

As refineries come back online in the state, prices should lower and stabilize.  However, it may not last long.

The Wall Street Journal continues: “Any relief Californians feel will be short-lived. The state’s cap-and-trade program, which charges businesses for emitting carbon, will take effect this November. Oil companies warn they’ll pass on the costs to consumers.”

The carbon trading market opens in California on Nov. 14.  The Sacramento Bee summarizes the cap-and-trade program:

“Under the program, more than 400 big industrial users will be subject to an emissions ceiling, or “cap.” They will receive tens of millions of emissions allowances, each one representing the right to emit a ton of carbon. The total amount of available carbon credits will decline slightly each year.”

Though a similar market is used in Europe to try and cap greenhouse emissions, it hasn’t been used in the U.S. on such a broad scale.  Ten percent of the carbon credits will be sold at an auction, while the rest will be given away for free. Big companies and businesses that buy up the 10 percent will be able to sell them to others.

The Sacramento Bee explains that in the first year the burden of buying these credits will be $1 billion and is set to increase each year.

A small business doesn’t stand a chance of competing in this market.  Likewise, consumers of these businesses will also take a hit as products, including gasoline, become more expensive.

While it may be comforting in the short term to know that California Gov. Jerry Brown instructed the California Air Resources Board to increase the fuel supply by allowing the immediate sale of cheaper and readily available winter-blend gasoline, which the state typically sells after Oct. 31, he is capable of doing much more. He could just as easily request the very-Democrat California Assembly and Senate to roll back the regulations that got California into this mess of exorbitantly higher gas prices on average than the rest of the nation.

Furthermore, U.S. Sen. Dianne Feinstein (D-Calif.) requested the federal government investigate the high prices afflicting the state and wonders whether gasoline companies are illegally raising gas prices.

The Hill quotes a letter from Sen. Feinstein to Federal Trade Commission Chairman Jon Leibowitz, which states, “California’s consumers are all too familiar with energy price spikes which cannot be explained by market fundamentals, and which turn out years later to have been the result of malicious and manipulative trading activity.”

Bill Wilson, president of Americans for Limited Government (ALG), says the answers to these high prices are easily found in the state’s strict regulations and lack of supply. “It would seem California’s overzealous attempt to rid the world of all greenhouses starting in its backyard by overtaxing and overregulating the energy market, thus limiting supply, might be a market fundamental being overlooked by Sen. Feinstein.”

Meanwhile, the Department of Energy, under the direction of Secretary Chu is working on new energy alternatives like biofuels and electric vehicles to get Americans off their addiction to oil.

However, The Wall Street Journal warns that very limited biofuels qualify under California’s strict pollution rules—corn ethanol is not one of them—and could result in the closing of even more oil refineries.

It’s hard to find a state that heaps more trouble on itself than California.  As it further kowtows to the wishes of Secretary Chu and the Obama administration it should expect a lot more than just higher gas prices.

And the rest of the country should take note of where America’s leaders would like to steer the nation—directly down the Golden path currently being paved with high energy prices and even more soon-to-be failing businesses.

Rebekah Rast is a contributing editor to Americans for Limited Government (ALG) and NetRightDaily.com.  You can follow her on twitter at @RebekahRast.

This article has 36 comments
  • Mynickelsworth 09.10.2012 10:22 AM

    Why anyone uses corn ethanol is beyond my understanding. The process of manufacture is more expensive than gas and, between the manufacturing process and the burning of the alcohol fuel, more environmental damage is done than the use of an equal amount of pure gas. Then, in addition, it is damaging to the engines that use it. I had to replace the fuel pump system in my Lincoln Towncar because of the Alcohol. I now use ONLY PURE GAS.
    In addition to all the above, the use of the corn, and other grains, for this purpose also increases the cost of food by reducing the feed available for livestock.
    THERE IS NO REASON, MONETARY OR ENVIRONMENTAL, USE ETHANOL IN AUTOMOTIVE GASOLINE. It is all a farce generated by the environmentalists to make everything more expensive.

  • Gloria Wedemeyer 09.10.2012 10:52 AM

    Feinstein wants the federal govt to investigate. Isn’t that a laugh. They have been investigating Fast and Furious for a couple of years now and exactly what have they come up with. It took them 3 weeks to go into Libya and investigate. There is one man to blame for this mess, well maybe two, the governor of California and the Pres of the US. Oh come on Calif, grin and bear it. We have had to put up with your crap all these years, so now you are getting some of that crap and It actually elates me. Go ahead and vote all your liberal people back in and please don’t forget to vote for O.

  • Remington 870 09.10.2012 10:59 AM

    The Communist state of Kalifornica deserves its self inflicted oil crisis, since the lefty weed smokers have allowed their state to become a bankrupt pile of dirt sitting on a fault line ready to suck them under. Kalifornica represents how the rest of American will be under four more years of the Communist Muslim Fake occupying the White House.

  • Janice Schindler 09.10.2012 11:03 AM

    “When I’m President your EVERYTHING will necessarily SKYROCKET.

  • Darrell B 09.10.2012 11:15 AM

    Now that’s the “Hope and Change” that I voted for!!! Uhhhh; where’s my ‘free stuff’?

  • ginger 09.10.2012 11:42 AM

    Feinstein has been part of the problem and now she wants an Investigation???? anything to deflect from her part in the destruction of the economy of Calif.

  • jeffykay 09.10.2012 11:55 AM

    That’s what you get from liberals,, more regulation and more cost. Aren’t they the best? The love taking care of their own,,, in the only way they know how, more pain so everyone can enjoy,,,, ahhhh such a great feeling,,,,

  • Bob S 09.10.2012 12:00 PM

    good ole california land of the fruits and nuts…they deserve everything they are getting…they have asked for it with there elected officals,,, the crooked unions,,, very close to being bankrupt… and one of there crooked politicians want an investigation into why there gas prices are so high….. they passed the laws requiring all the regulations on the gas supplies…so live with it you idiots…. maybe mexico will take you over… since you have accepted the illegals in great droves….

  • glenns 09.10.2012 12:08 PM

    You liberal dummies, you bring this on youself then you want to blame someone else?( Let’s re-elect Odumba so we can have this all over the country. LOL )

  • Donnie Cheesman 09.10.2012 12:25 PM

    Zealous government bureaucrats,
    acting with authority, not granted
    by the U.S. constitution, carry out
    mandates which the corrupt elect
    approve of. Queen, Sen Diane is
    just such a pretender of dismay as
    fuel prices in Calif soar—-she is a
    part of the liberal pretender class
    that is wrecking California’s role in
    the American economic recovery..

  • Neal De Gaston 09.10.2012 1:04 PM

    All of the above comments are good! I would add, let’s not go to California for vacations or business and spend our money to support their high prices, or use their commodities in short supply.

  • 1LTLos 09.10.2012 1:09 PM

    We have an idiot in the white house and an even bigger idiot in the Department of Energy – Romney pointed out how stupid Obama is for his four straight years of no oil drilling and Steven Chu is a moron to think that we are competing somehow with Europe on how to be fiscally ridiculous and the message both morons send is that neither have the wherewithal to help make life easier for the California OR USA taxpayer — Steven and Obscumbo pack your bags!

  • daveveselenak 09.10.2012 1:31 PM

    Amen…amen! The flakes out there deserve their fate for continually voting for the “Dem-O-Commies.” The communists have succeeded in breaking that state and I bet that they will ask the Kremlin to bail them out! Michigan will probably be the next to follow; you see, you have heard of the “domino effect” when it came to countries falling to communism, well, now we have our states falling like dominos in the same manner! – tax the once free middle class into submission! The ef’n sheeple can’t see this? – what the hell do they need, a road map? WAKE UP. WISE UP, RISE UP!

  • hookemowls 09.10.2012 1:38 PM

    Yep, I remember being with a couple of friends who hated Bush and at the end of 2008 were condemning him for the gas prices (circa $1.84/gallon), not a peep out of the hypocrites now.

    If we returned to the Bush years, we’d be better off than we are now (lower gas, lower unemployment, lower groceries (cost of living), higher home values, higher dollar value, etc.)! If b.o. is re-elected, who is he going to blame for the failures of last 4 years?!?!?!?!?

  • Americanadian 09.10.2012 1:40 PM

    Without a doubt, California is the most beautiful place on earth to live. Except for a short period during 1995 and 1996, we have been controlled by the Democratic Party since 1970, and they have passed laws and instituted policies to dumb down and indoctrinate young people, ensuring California remains under Democrat rule. There are three initiatives on the November ballot to raise our taxes again; and if even one more tax is added, many more businesses and taxpayers will leave. We don’t want to go, but we would be enabling saps to stay.

  • CADude 09.10.2012 3:22 PM

    And yet we elect and re-elect the people that caused this mess! Why?

  • Erik Osbun 09.10.2012 3:24 PM

    Bill Wilson, president of Americans for Limited Government (ALG), says
    the answers to these high prices are easily found in the state’s strict
    regulations and lack of supply. “It would seem California’s overzealous
    attempt to rid the world of all greenhouses starting in its backyard by
    overtaxing and overregulating the energy market, thus limiting supply,
    might be a market fundamental being overlooked by Sen. Feinstein.”

    Mr. Wilson is correct. The liberals in our government mandated suffering at the pump.

    Read more at NetRightDaily.com: http://netrightdaily.com/2012/10/californias-self-inflicted-gas-shortage/#ixzz28pbwujtw

  • Erik Osbun 09.10.2012 3:27 PM

    Frankly speaking, the liberals ( Democrats ) in the California congress should now be looking for that pole with tar and feathers in their future.

  • Public_Citizen 09.10.2012 4:35 PM

    They keep getting re-elected because of the obscene gerrymandering of the election districts. Most districts are designed to be “safe” for the incumbents, guaranteeing a 2/3 Democrat – 1/3 Republican legislature.
    The insane rush to “save the planet” comes from the urban-liberal/Sierra Club/Greenpeace wing of the Democrat Party and the other Dems just go along with it. The Republicans can’t muster enough votes to keep this stuff from becoming law so the state is suffering from a government legislated DROUGHT to the most productive farm land in the nation, out of control energy costs [average $4.70+ per gallon as I write this], one of the highest tax burdens in the nation, public sector unions guaranteeing the bankruptcy of local government, failing schools, the welcome mat out for illegal aliens, approximately 1/3 of all the welfare cases in the nation, and the list just goes on and on.

  • socalwmb 09.10.2012 4:36 PM

    its so frustrating being a republican in California! Our votes dont matter in so-cal where it’s primarily republican because the rest of the state is so liberal. Then they do a re-districting and make it so it will permanently stay this way. people say “school” and “kids” and all these bleeding hearts just say “yes more taxes please”. Then we get this cap-and trade program which is just taxes on companies. The state should buy stock in u-hual the way it’s driving businesses and people out of this state! And it’s a double whammy because they are probably mostly conservatives!

  • socalwmb 09.10.2012 4:49 PM

    You stated it exactly. We cant change the state legislature because they fixed the districts. so we are stuck with all the tree hugging crap the liberal enforce on us.

  • cmjay 09.10.2012 5:06 PM

    FEINSTEIN is surprised that the gas prices are up and blames this on companies illegally raising prices and price manipulation. Doesn’t this sound familiar?All this EPA regulations and high TAXES are taking its toll.The DEMOC RATS keep doing the same thing and expect a different result each time. States with REPUBLICAN governors have lower unemployment and most have BALANCED BUDGETS. CALIFORNIA will self destruct.

  • fatal42 09.10.2012 6:31 PM

    Idiots in Mexafornia are getting exactly what they deserve ,

  • Scot Fahey 09.10.2012 7:06 PM

    http://killcarb.org/
    Your tax dollars fund CARB. In fiscal year 2007-08 they got $722 million for 1172 employees. In fiscal year 2008-09 they got $650 million for 1272 employees, and in fiscal year 2009-10, your state legislators and the governor fired over 8500 teachers in the state in order to give $857 million to this outrageously corrupt state agency and its 1280 employees. Why? Easy. Follow the money. The CARB payroll is loaded with political friends of the legislators. Hundreds of these worthless so-called public servants collect hundred thousand dollar salaries and pension benefits that working families can never expect

  • Sondra Bauernfeind 10.10.2012 10:48 PM

    Vote4Energy Click on EnergyCitizens.org and sign the pledge to Vote4Energy…
    Giant Rally in Albany, New York Monday, October 15,2012 to show support for the production of natural gas in New York State. Go to EnergyCitizens.org for details.
    Russia held all of the European nations hostage to the natural gas supplied by Russia several months ago. No wonder there are forces who oppose the development of natural gas drilling in America…. America has enough natural gas to supply all our needs and have plenty extra to supply Europe. It would be good for our economy to sell a needed product to other countries instead of buying foreign oil. The Russian control over Europe in need of natural gas would be broken if America drilled for gas and then sold the excess to Europe. Could this be a major reason for so much opposition by the anti-drilling mob to America drilling for natural gas and gaining independence from OPEC ?

  • Jean 12.10.2012 11:42 AM

    I live in California, and believe me, conservatives try to pass sensible laws, but we are called rascist every time we open our mouths. People here get their facts from Saturday Night Live and other comedy shows. Most liberals here care more about their pedicures than how their children will have to live under Obama’s administration.

  • Jean 12.10.2012 11:56 AM

    You will only hurt the small business that does not support Obama. We still have empty store fronts from 4 years ago. Governor Brown does not care about middle income citizens here. Our school teachers, police, and firemen have lost their jobs by the thousands. Brown is spending our money on High Speed Rail that goes to no where. Is he putting Bart trains to San Jose where the high tech industry is, NO! The democrats here keep voting the same fools in because they vote for the “D”, not issues.

  • hard rock 15.10.2012 5:21 PM

    all libreals should be issued special tags for their cars and be charged 25 dollars per gallon of gas and be limmeted to ten gallons per week that would reduce their carbon foot print that would lower prices for those who work to support their sorry asseshard rock

  • jamsim67 20.10.2012 11:33 AM

    They are not liberal dummies. They are people who get money from the state, and they fear that a vote for anybody other than a democrat will be a vote to take away their free money. To change things (in every state), you have to change them …

  • jamsim67 20.10.2012 11:33 AM

    They are not liberal dummies. They are people who get money from the state, and they fear that a vote for anybody other than a democrat will be a vote to take away their free money. To change things (in every state), you have to change them …

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