Why are our gas prices so high? Electricity rates climbing? Californians, meet mirror:
For years, California’s gasoline supply chain has been tighter than just about every state except Hawaii, leaving motorists vulnerable to even minor crimps in the supply chain. That, along with the second-highest gasoline tax in the country, is why it costs more to fill up in California than it does elsewhere in the U.S.
And the reasons are almost entirely the result of policies and regulations enacted at the behest of California’s voters.
Unlike past nationwide gas price spikes, Golden State drivers can’t blame their pain at the pump on crude oil prices — which account for about two-thirds of the cost of a gallon of gasoline. After peaking in May at $105 a barrel, the domestic benchmark price has fallen to $92 as of last week.
Oil prices have fallen because there’s plenty of crude to go around, thanks to a slowing global economy and new drilling technologies that have dramatically increased U.S. production. After two decades of decline, domestic oil output began rising in 2009 and is expected to continue to grow through 2014, according to the Department of Energy. Crude oil stocks are above the high end of the five-year average for this time of year.
But that discount doesn’t get passed along to California drivers because supplies are so tight in the Golden State.
One reason is that state regulators insist refiners produce a specific blend of gas to meet tough state air quality standards. That means refiners and wholesalers can’t make up temporary shortages with gas that can be sold elsewhere in the U.S.
And while refiners in other states have gradually expanded output over the years to keep up with demand, no California politician would dream of campaigning on a platform of building new oil refineries. The result is that supplies in California have gradually tightened as refiners have been unable to win approval to expand production, said Tom Kloza, publisher of the Oil Price Information Service.
Our “chickens are coming home to roost” as Obama’s pastor likes to say.
As to the rest of the country, don’t laugh too loud at our predicament. What you see happening here is what Obama and his gang wants for you too. Why? To force you at virtual gunpoint to live their way.
- California voters only have themselves to blame for soaring pump prices (economywatch.nbcnews.com)
- Why California’s gas prices are going haywire (washingtonpost.com)