Californians still feeling impacts of oil industry conflict

California residents are feeling the ongoing impacts of the state’s policies targeting the oil industry. Tai Milder, the Director of the Division of Petroleum Market Oversight, recently shared an update on the California gasoline market following events at a Bay Area refinery. However, the report fails to address the significant consequences of years of misguided policies on consumers. California’s aim to eliminate fossil fuels and implement policies that drive up gasoline prices amidst high demand is exacerbating the situation.

The Western States Petroleum Association (WSPA) has witnessed numerous detrimental policy decisions in California over the years. These choices have forced oil and gas companies to make tough and expensive decisions, such as downsizing, altering operations, or exiting the state. Interestingly, even when refiners incur losses due to price fluctuations, the state continues to profit from the highest state gasoline taxes and additional per-gallon costs. Recent data reveals that California consumers are paying $1.07 for every gallon of gasoline pumped, reflecting the state’s significant revenue from fuel purchases.

The past twenty years have seen a worsening situation as the oil industry faces aggressive phasing out without a feasible plan for transitioning away from traditional fuels. Despite two special sessions and ongoing policy debates, California is now accustomed to soaring energy costs. The volatile gasoline market is a result of cumulative poor policies and overly ambitious goals that clash with steadfast consumer demand.

The Division of Petroleum Market Oversight, created to oversee the industry for market manipulation, seems unaware of fundamental market mechanisms. The agency’s report lacks crucial details on the supply-demand dynamics driving consumer costs, as well as a historical analysis of how the current situation unfolded. Consumers are calling for actionable solutions that provide genuine relief and enable the industry supporting California’s economy to operate efficiently.

Future challenges, such as the reauthorization of the state’s cap and trade program and the ban on internal combustion engines, loom large and are likely to further impact consumers at the gas pump. The combination of past policies, present deflecting tactics, and future requirements is fueling volatility that threatens California’s affordability.

Catherine Reheis-Boyd, the President and CEO of the Western States Petroleum Association (WSPA), oversees the organization’s activities and advocacy in five Western states. She emphasizes the need for policies that alleviate consumer burdens and support an industry vital to California’s economic functioning. The continued push for environmentally-focused objectives without ensuring affordability for residents poses a significant challenge for the state’s future.