Californians Choosing Between Gas or Groceries, Utility Bills or Rent

How is it possible that in California, hard-working families must choose between gas or groceries, utility bills or rent?

The average cost for a gallon of regular gas in the U.S. today is $3.138.

California’s cost for that same gallon of regular gas is $4.500, the highest cost in the entire country, according to AAA. Hawaii even pays less for gas.

In 1988, the state of California only imported about 4.5% of all the oil that we consumed in our state. By 2020 we were importing over 70%.

Approximately 30% of the cost of a gallon of gas in California comes from taxes and fees.

In 2023, 20% of the cost of a gallon of gas in California came from taxes and fees, according to WSPA, while only 1% was attributable to net profits from the oil industry.

While Californians are suffering under the highest gas prices in the country, and more than 2.2 million Californians are behind on their utility bills, Governor Gavin Newsom and the state Legislature are prioritizing redistricting the electoral districts to squeeze Republicans out of 6 more U.S. House seats.

California has an energy problem – a big energy problem, and even Newsom has noticed. But it’s his awful policies that brought the state to the brink.

In April, Gov. Gavin Newsom Thursday directed state officials to increase efforts to guarantee reliable fuel supplies for the nation’s biggest auto market, prompting oil companies to blame state policies for difficult business conditions and high pump prices, Reuters reported.

Gov. Newsom has been agitating for some time against “Big Oil” and their “windfall profits,” but always leaves out his and Democrats’ important role in escalating oil and gas prices in California through regulations, surcharges, “clean-air” and “low carbon” programs, cap and trade and more schemes, the Globe reported in April.

Gov. Newsom signed a package of “sweeping legislation” in September 2022 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.

That “sweeping set of laws” Newsom touted was 40 new climate change bills regulating California businesses and its people.

Before Gov. Newsom, in 2018, then-Governor Jerry Brown signed SB 100 by then-Sen. Kevin De León, which established the policy that eligible renewable energy resources and zero-carbon resources supply 100% of all retail sales of electricity to California end-use customers and 100% of electricity procured to serve all state agencies by December 31, 2045, the “100% clean energy policy.”

California lawmakers also passed Senate Bill 2, the Renewable Portfolio Standard program in 2011, which required all retail sellers of electricity and publicly owned utilities to buy 33 percent of the electricity delivered to their retail customers from renewable resources by 2020.

And of course, who can forget the state’s greenhouse gas reduction and clean energy goals since 2006 when AB 32, the California Global Warming Solutions Act of 2006 was passed by the Legislature and signed into law by then-Gov. Arnold Schwarzenegger.

Those goalposts were then moves out to 2045 to achieve “carbon neutrality.”

In the past decade, the California Public Utilities Commission has approved rate hikes nearly three times higher than inflation. The utility companies are happy, while ratepayers were given the middle-finger.

In 2024, Gov. Gavin Newsom signed SB 1221 which authorized the CPUC to approve up to 30 pilot projects that facilitate cost-effective decarbonization in priority neighborhood decarbonization zones. The pilot projects are intended to provide state decision makers with a greater understanding of the challenges that arise when decommissioning parts of the natural gas system.

According to SB 1221 bill analysis:

In 2019, the City of Berkeley adopted the nation’s first ban of natural gas hookups in most new residences and commercial buildings. Since then, about 50 other California cities and counties have adopted reach codes (those that surpass state building standards) or ordinances that either limit or ban the installation of gas connections to new buildings. Additionally, the Bay Area Air Quality Management District adopted rules prohibiting installation of natural gas furnaces and water heaters in residential and commercial settings beginning in 2027.

While a Federal court overturned Berkeley’s gas ban, the CPUC is “actively considering the issues of zonal decarbonization with concurrent decommissioning of the natural gas utility system.”

None of this helps lower the cost of home energy bills, and in fact only increases the cost to heat and cool your home, cook your meals, and wash your dishes and clothes.

As Andy Caldwell reported, “the biggest death blow to the future of the industry are the state mandates in effect that will effectively ban natural gas in new construction along with banning the sale of diesel- and gas-powered vehicles in this state. The latter has already caused the largest trucking company in our region to close their business.”

“The pending shutdown of the Phillips 66 refining complex in Los Angeles will reduce daily refining capacity by 8.9%,” USC Professor Michael Mische warned in March. “The loss, although painful in terms of its impact on consumer prices, is absorbable and the deficit in production and gasoline levels will be compensated by imports of finished fuels from Washington State and perhaps Gulf Coast refineries.”

Gavin Newsom’s and Democrats’s “carbon-neutral” policies have forced California to the brink of a very serious energy crisis.

Chevron Oil Company announced last August their corporate relocation to Houston Texas from the Bay Area; Phillips 66 announced that its Los Angeles refinery will shut down by October 2025; and Valero announced that it will shut down its Benicia refinery in April 2026.

With fewer refineries, will not only force California to rely on foreign oil sources, gas and energy prices will climb.

Add to that devastating news, Senate Bill 1137, which took effect on June 27, 2024, bans the construction of new oil wells and the maintenance or repair of existing wells within 3,200 feet of loosely defined “sensitive receptors,” potentially threatening to shut down energy resource infrastructure statewide.

Add to that, California Senator Scott Wiener (D-San Francisco) introduced a bill in February to hold “Big Oil” responsible for natural disasters in California. You read that right – Senator Wiener is blaming the oil and gas industry for natural disasters, or disasters that should have been mitigated by the State of California – like wildfires. Sen. Wiener’s Senate Bill 222 would allow the state FAIR Plan, insurance companies, and individuals to sue oil and gas companies for wildfire damages.

Gov. Gavin Newsom has been targeting the oil and gas industry with stifling state regulations, impossible laws like the 3,200 foot setback for oil wells, signing the gas price gouging law, and chasing Chevron out of the state.

As oil expert Dave Noerr told the Globe last year, “The growing difference between the price of crude oil and the retail cost of gas and diesel as well as the additional cost Californians pay compared to every bordering state and the rest of the U.S. is:

• The Sacramento surcharge
• The cost of California
• The growing of Government
• The Low Carbon Fuel Standard
• The Cap and Trade Program
• Vapor recycling requirements
• Data collection
• Air quality mandated equipment replacements”

Noerr added, “So California, the fact of the matter is, you are paying the same or less for the crude oil contained in a gallon of gas or diesel. You are just paying a lot more for government.”

So now that Gavin Newsom has created this mess, he’s directing the energy commission to do something to stop the refinery closures – except the CPUC and Air Resources Board – his state agencies – are continuing with business as usual.