California's High Gas Prices Are Self-Inflicted

California's embrace of the “green” orthodoxy has proven to be expensive and often counterproductive for motorists, home builders, and many other industries.


Gregg Laskoski is a senior petroleum analyst for

Ordinarily, when gasoline prices trend downward, (which does not often happen at the approach of the summer driving season) that's good news for U.S. consumers. And indeed, many of us are somewhat relieved to see the nation's average price of gas at $3.72 today, since it was 17 cents more per gallon just one month ago.

But in California, gas prices are going in the opposite direction. The state's average price is $4.34 per gallon and that includes a 14-cent increase from just one week ago. In Los Angeles the average price Wednesday is $4.38 per gallon for unleaded regular gasoline.  

The Los Angeles Times correctly reported that refinery problems were the major cause of the supply problem on the West Coast and that while California once had 14 refineries producing the state's unique blend of gasoline mandated by its legislature, that number has declined to 12.  Among those 12, four are shut temporarily due to maintenance issues. Three of those are in the Bay Area: Conoco Phillips's refinery, in Rodeo and Tesoro's and Shell's refineries in Martinez.

[See a collection of political cartoons on gas prices.]

Consequently, the state's gasoline supplies last week were 21 percent lower than they were at the same time last year, according to the San Francisco Chronicle. Because of California's unique fuel blend requirements, motorists can rely only on California's refineries to correct their supply problem. They can't solve the shortage by borrowing from their next door neighbors in Arizona or Nevada the way other states might.

The dilemma makes me ask, "Have things gone too far?" California began mandating cleaner burning fuel in the mid-1990s for good reasons; it had the worst smog in the country. However, in recent years state legislation has surpassed federal Environmental Protection Agency requirements, and its embrace of the "green" orthodoxy has proven to be expensive and often counterproductive for motorists, home builders, and many other industries.    

California's combined federal, state, and local gasoline tax is among the highest in the United States at 67 cents per gallon. Only Connecticut (71 cents per gallon) and New York (67.4 cents per gallon) are higher. Nonetheless, Californians could soon see those taxes increase. The state's budget deficit, estimated by Gov. Jerry Brown at $9 billion in January, was off by just a smidge ($7 billion).  Now facing a $16 billion deficit, Brown said he plans to raise the state sales tax (the highest in the United States) from 7.25 percent to 7.5 percent and, of course, he's looking beyond that, too.

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