Kathleen Ronaine Associated Press
SACRAMENTO — California Gov. Gavin Newsom announced on Friday that oil refineries can begin selling more polluting winter blends ahead of schedule to help ease rising fuel prices.
The average cost of a gallon of gasoline in California on Friday was $6.30, well above the national average of $3.80, according to AAA. Newsom administration officials say the gap between state prices and the national average is wider than ever before.
The Democratic governor also called on state legislators to impose new taxes on oil company profits and return the money to California taxpayers. Newsom’s office provided few details about the proposal, as lawmakers won’t be returning to the Capitol until January.
“They’re fooling you,” he said of the oil industry in a video posted to Twitter.
Oil industry representatives say the higher prices in California than elsewhere are due to state regulations. Summer blends, which are legally required to be produced by refineries during the hot months, are more expensive to make, but are designed to limit greenhouse gas emissions and smog during the hot summer months. It has been. Most refineries won’t be able to switch to winter blends until November.
Doug Shupe, spokesman for the Southern California Automobile Club, an affiliate of AAA, said consumers could likely save 15 to 20 cents per gallon by switching from summer to winter blends. increase. Gasoline prices in Los Angeles are on the verge of breaking his $6.46 record set in June, he said.
“If those prices go up to $7 a gallon, a 15-cent drop doesn’t mean much to drivers,” Shupe said.
Prices have skyrocketed as supplies are limited as some refineries are offline for routine maintenance and other issues, he said. The California Air Resources Board, which regulates refineries, said the refinery fire and Hurricane He Ian could also have an impact.
This is the latest spat between Newsom and the oil industry, which retains political and economic clout in California despite the state’s aggressive climate policy. But Newsom’s double act on Friday also illustrates the complex realities he faces as he tries to wean the country away from oil and gas while keeping up with economic realities.
For example, earlier this year, the Newsom administration turned to generators and power plants that run on fossil fuels to avoid rolling blackouts due to heat waves.
By urging air regulators to allow oil companies to switch to winter blends early, Newsom said state rules will affect prices, said Kara Green, spokeswoman for the Western States Petroleum Institute. is acknowledging
Refineries typically do maintenance in the spring or fall in preparation for switching fuel blends, she said. It takes time for refineries to prepare winter blends, and Newsom’s order may have little immediate effect, she said. If Newsom really wanted to bring prices down, it could suspend state gas taxes or loosen other regulations, she said.
“It’s a conscious decision to try to put the blame back on the oil industry,” she said.
Newsom said he expected a 5% to 10% increase in supplies due to the easing of refinery rules as refiners have already started producing and storing gas.
“The air quality impact of this measure is expected to be minimal and outweighed by the public interest in temporarily easing restrictions,” the Commission said in a statement.
Starting in January, oil companies will be required to disclose their monthly profits to the state under a law recently signed by Newsom. Consumer Watchdog called on Newsom earlier this week to convene a special legislative session to approve a tax on those profits.
Group president Jamie Court praised Newsome’s efforts to address “an unruly industry.”
Democratic leaders in state legislature say windfall tax on oil profits deserves “strong consideration,” but Republicans should immediately suspend state gas tax for Newsom to provide relief said.
Big oil companies posted record profits this summer, and oil prices have fallen since the end of the summer.
The California Energy Commission released a letter on Friday asking why prices rose so dramatically, what steps the state could take to bring prices down, and why refinery inventory levels had fallen. Sent to executives of five major oil companies.
The Petroleum Institute’s Mr. Green said California regulations would add just under $1 to oil prices in the state, though other observers said it was lower. Consumer Watchdog’s Court says about 60 cents, while Severin Borenstein, an energy economist at the University of California, Berkeley, says he’s closer to 70 cents.
Borenstein also identified unexplained surcharges that have brought in billions of dollars to Californians since 2015.
In 2019, Newsom directed the state attorney general to investigate whether oil companies were overcharging Californians.Attorney General Rob Bonta said his office was still investigating. Told.
https://www.mercurynews.com/2022/09/30/gov-newsom-relaxes-refinery-rules-as-prices-climb/ Governor Newsom eases refinery rules as prices rise