Gov. Gavin Newsom (D-CA) has declared war on California’s oil and gas industry, and his state’s residents are paying the price. Voters across the country should pay close attention to what is happening on the West Coast before casting a vote for his fellow California Democrat, Vice President Kamala Harris.
California is in a mess when it comes to energy. Newsom’s latest proposal would let the unelected California Energy Commission set minimum fuel storage requirements for oil refineries in case of outages or unplanned maintenance. The governor claims that unplanned maintenance at refineries leads to price spikes that could be prevented if refineries were forced to keep reserves for use in such a contingency.
But new storage facilities require more land and tanks for the oil industry. The cost of these would increase gas prices and probably stoke inflation in other areas. California sees this every time state Democrats try to “fix” a problem they created. The state had the largest increase in inflation of any state in the aftermath of the COVID-19 pandemic.
A bigger problem is that reducing oil and gas use is the core of California’s whole energy policy. Newsom boasted in 2021 that he would not issue fracking permits after January 2024 and that oil extraction would be banned in California by 2045 at the latest. He is trying to boost his leftist credentials by blaming a post-pandemic spike in gas prices on greedy executives rather than the inflation President Joe Biden brought on the country or on California’s own inflationary policies that make gas more expensive than anywhere else in America.
As a result, California’s refining capacity has dropped by 10%, more than double the national decline. The state has just 11 refineries, and stringent environmental regulations make it impossible to use gas from other states to keep California’s gas stations running.
This focus on destroying suppliers has, predictably, helped California’s top dogs — big brands such as Shell and 76, which dominate the gas station market.
Newsom’s attempt to crush the oil and gas industry isn’t limited to regulating suppliers out of business. He has also targeted demand, which means people who are buying fossil fuel products, that is, normal everyday Californians. Newsom plans to end the use of gasoline cars by decree, banning their sale by 2035. Gas stoves and other similar products also get hit up and down the Golden State.
Look at what this means. Newsom is doing what he can to eliminate the supply of gas and oil. By doing so, he consolidates power in the hands of fewer businesses, meaning less competition. He is limiting the ability of those suppliers to operate, as he wants to drive them out of business, too. Even as he tries to lower demand for gas and oil, it remains high because solar and wind energy supplies are unreliable and cannot keep people’s lights on or cars running. High demand and a shrinking supply mean high prices.
Newsom is trying to woo both his environmentalist ideology and voters, the latter of whom want reliable gas vehicles and prices they can afford. This takes us back to Newsom and his minimum fuel storage requirements, which would impose costs on refiners even as the rest of California’s energy policy tries to put them out of business.
Gas and energy are political landmines for Democrats to navigate amid their forced transition to “clean” energy. Fewer Californians are buying electric vehicles. The people who want them have likely already purchased them. The remaining holdouts are doing so because gas cars are more reliable, have more infrastructure even in gas-hostile California, and simply look or sound better.
This problem is especially prevalent among people who commute to Los Angeles or San Francisco for work. Those voters live in competitive legislative districts, and a voter rebellion over gas prices or taxes could break the Democratic supermajority in the state. Less important to Democrats are voters in rural areas, who are already forced to contemplate whether a mandated shift to electric school buses will mean the cancellation of school sports.
The political concern over gas prices parallels the political concern over headlines about annual rolling blackouts. Newsom was so upset with having to answer why California can’t keep the lights on or air conditioners on during hot summers that he went back on his environmental promises several times. In 2021, California set up five temporary gas-field generators around existing power plants to keep the grid from crashing.
Shortly after that, Newsom and California’s energy regulators reversed themselves and allowed the state’s last nuclear plant to stay open, pushing for extensions and even a state loan to its owner to keep it from shuttering in 2025 as was planned. Its closure would have axed 9% of the state’s energy supply. The plan was always ridiculous because nuclear power is as clean as wind and solar and far more reliable than either.
The kicker came in 2023. Newsom campaigned on shutting down the Aliso Canyon gas storage facility, part of his reckless sprint into the green dreams of environmental zealots. Instead, California considered expanding the facility and increasing its storage to keep the grid from collapsing. As of 2022, natural gas made up 47% of the electricity generated in California. Wind and solar combined came in under 27%.
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California’s policies under Newsom have been sporadic and mutually contradictory, trying to impose an impossible environmentalist worldview on the state without the necessary technological advances and change the way people live but avoid political backlash. Damage is always easier to create than to fix, meaning California is still digging itself into deeper holes even as the governor scrambles to fill the craters he created.
It is too late for Newsom to fix these problems. If anything, he is more likely to make them worse after the 2024 election leaves him free from political constraints in California while he plans his future White House run. The state’s next Democratic governor will probably be more willing to drag it into a “green” future and face angrier reactions as far-off deadlines loom closer and closer. California is going to keep pulling its energy policies in every direction, and it might finally tear the grid apart.