California wants higher gas prices and electric vehicles, Virginia wanted that too but then changed its mind – MishTalk

Common sense is returning to Virginia as California Governor Gavin Newsom struggles to defend his senseless policies. Let's start with Newsom and gas prices.

In an editorial in the Wall Street Journal, Newsom says:The price people pay at the pump is not simply a result of supply and demand, but the result of a highly concentrated and opaque market.

Here are the facts. Price spikes – like the $6.42 per gallon in June 2022 that triggered our new anti-price gouging law – occurred when California's taxes and fees remained unchanged and crude oil prices had actually fallen. What drove prices up were increased industry profits.

California's new law gives us tools to investigate oil companies' profit-making practices, prevent supply disruptions, and take legal action if necessary. Another potential tool to encourage the oil industry to do right by Californians is a penalty for price gouging, which will be worked out through a public process.

What people pay at the pump is not simply a matter of supply and demand, but the result of a highly concentrated and opaque market. This allows a handful of highly profitable oil companies to rip off millions of people. In California, four companies control 90 percent of gasoline refining capacity.

Factors such as refinery maintenance and lack of planning have been shown to reduce supply and increase refinery margins by as much as 200%. California has also found that traders in the open “spot market” drive up prices, benefiting oil companies.

A concentrated and opaque market

OK, why is the market in California concentrated and opaque?

  • California has the most regulations of all states
  • Refineries fed up with California nonsense have left the state
  • California's seasonal blend regulations come at a cost. But there isn't just one summer blend. Because of varying state regulations, refineries produce more than 14 varieties.

Two California refineries closed

Please note that on October 11, 2023, two out of five refineries in the Bay Area will stop producing gasoline.

“There will only be three refineries in the Bay Area at the start of the year,” said Andrew Lipow, a Texas-based oil industry analyst and consultant. “If there are only three and one of them closes, things will get exciting, to say the least, and not necessarily in a good way.”

“Yes, we will be just as vulnerable, or even more vulnerable, to disruption simply because there are fewer alternative sources to which we can direct production. I think we will have too much diesel and too little gasoline,” said Jim Bushell, an economics professor at UC Davis.

In a state where cars are predominantly gasoline-powered, a shortage of gasoline means higher prices.

California issues important new emergency rules

Please consider Newsom's solution to high gasoline prices and moving refineries out of state because you have no idea what is going on.

Effective May 20, 2024, California is issuing important new gasoline regulations for refiners, distributors and brokers under an emergency executive order

Effective May 20, 2024, refineries and all transportation fuel importers in California will be required to comply with the California Energy Commission’s (CEC) latest regulations – the Gross Gasoline Refining Margin and Marine Import Reporting Regulations. These stipulate extensive reporting requirements for the import of transportation fuels for California.. Importers subject to these obligations include all companies that import transportation fuels, including refiners, traders, and brokers, and that are importers of record under federal customs law or otherwise own the cargo prior to arrival. Refineries, companies that produce liquid hydrocarbons or fuel ethanol, and companies that sell these products to retailers and resellers must also submit new monthly reports on their gross margins on gasoline refining, as well as detailed information on expenditures and wholesale sales of gasoline.

Following a workshop to draft the new regulations in April, the CEC submitted this latest regulation to the Office of Administrative Law (OAL) on May 9, beginning a limited five-day public comment period. The OAL ultimately approved the regulation on May 20, and it went into effect immediately for a two-year period. Most importantly, the regulation requires any importer of record or owner of “reportable cargo,” which includes finished gasolines, gasoline blending components, diesel fuels, and aviation fuels, to file the new California Marine Import Report prior to arrival at a California port.

The latest rule is a product of California's March 2023 Gas Price Gouging and Transparency Act (SBX1-2), which grants the CEC unprecedented authority to issue rules that increase state regulatory control over the transportation fuels market. These rules will have significant impacts on a broad range of market participants – including those beyond refiners and gasoline importers.

What Newsom earns

What Newsom and his supporters deserve is for all California refineries to leave the state.

However, if all refineries were to leave the country, innocent bystanders who do not support Newsom's madness would also suffer from the debacle.

A higher gas price is part of the plan

A short opinion letter to the WSJ sums up the situation well: A higher gas price is part of the plan

Considering that it takes many years to build a new refinery and that Governor Gavin Newsom championed a California law banning the sale of new gasoline-powered vehicles after 2035, why would anyone invest in new refining capacity to produce California's unique blends? Mr. Newsom and his associates are on a mission to get Californians to stop driving gasoline-powered vehicles, so he should be pleased with high gasoline prices.

Paul Dembry

Virginia leaves the Californian path

Please note Virginia is leaving the California EV Way

Governor Gavin Newsom wants to spread his anti-fossil fuel message far beyond California, but last week he lost a supporter. Virginia abandoned its plan to adopt West Coast vehicle standards, offering drivers freedom instead of climate dogma.

Gov. Glenn Youngkin said his state will not phase out the sale of gasoline-powered vehicles, even though a 2021 law in Virginia could result in those vehicles being banned by 2035, as California will do. “The idea that the government should dictate to people what kind of car they can and cannot buy is fundamentally wrong,” he said.

He is changing the policy of Democratic Gov. Ralph Northam, who signed a law allowing Virginia to enforce regulations set by the California Air Resources Board (CARB). The Biden administration opened the door by allowing the Golden State to set stricter rules than those of the Environmental Protection Agency, and Virginia was one of several states to follow California's lead.

In 2022, Newsom pushed CARB to implement even stricter regulations, requiring zero-emissions vehicles to account for 35% of all new car sales by 2026 and 100% by 2035. Democrats in Virginia are convinced that they will go along with the new rules once they come into effect next year. So much for the sovereignty of the individual states.

Mr. Youngkin has the public on his side. A December poll found that 57% of Virginians want to eliminate the vehicle requirement, while 30% prefer to keep it. Eliminating the requirements will give consumers a choice between electric and gasoline cars, which will especially benefit low-income buyers. And as for Mr. Newsom, look back in a decade to see where his push for electric cars has taken the Golden State.

Virginia has had enough

A challenge from climate alarmists is to be expected, but it will not accomplish anything. The law signed by Democratic Gov. Ralph Northam allows (but does not require) Virginia to follow California's nonsense.

No matter what these idiots decide, 35 percent of new car sales in 2026 will not be electric vehicles.

If elected, Trump will seek to reverse a ruling that allowed California to set stricter regulations than those of the Environmental Protection Agency.

And expect the increasingly ridiculous EPA rules themselves to be watered down.

AAA Gas Prices June 10, 2024

California governor escalates war on gasoline

On May 20, I noticed California governor escalates war on gasoline – impact on neighboring states

Expect to pay a dollar more per gallon in California, and prices are also higher in Nevada and Arizona.

Even though the refineries are losing money, Newsom is demanding new taxes, leading to a complaint from Nevada.

If I were a refiner, I would leave this hellhole and leave California to its own devices.

In California, you already pay $1.48 more than the national average. Governor Newsom would have you believe that usury is more likely in California than anywhere else in the country.

As of April 2024, the World Resources Institute reports: “While a few decades ago there were about 50 oil refineries in operation throughout California, today there are 11 refineries in California.”

Newsom's proposal will impose even more costs on gasoline refineries, potentially causing even more to leave the state.

This is intentional.

Virginia is now saying no to the path California has taken.

Reflections on progress

On March 22, I commented In the name of progress, Biden will take away your truck

Trump will put an end to this nonsense.

Electric vehicles will emerge, but at a pace determined by markets, not through subsidies and demands without a sensible plan to implement the plan.

Anna Harden

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