Gov. Gavin Newsom (D-CA) is trying to play both sides in the state’s fight over fossil fuels. Unsurprisingly, he is losing.
Newsom has been trying to drive the oil industry out of business, which includes forcing all 27 million California drivers out of gas-powered cars and into electric vehicles. California’s war on oil, complete with excessive regulations and a gas tax designed to make driving gas-powered cars unpalatable, has led to California having the highest gas prices in the country.
That is what Newsom and California Democrats want, but the governor also wants to avoid the political backlash for the very policies he has pursued. That has led him to rail against the oil industry’s “greed” and pursue contradictory policies, such as the recently passed requirements for oil refineries to have a minimum amount of fuel on hand, with the goal being to soften the blow when supply shortages lead to gas prices spiking.
Newsom wants the very oil refineries he wants out of business to help keep his approval numbers high by increasing their fuel storage supply while the state of California tries to eliminate the consumer demand. As you can guess, that is untenable. Shortly after Newsom signed the law, Phillips 66 announced it would begin the process of shutting down its Los Angeles refinery, with the target date being the end of 2025.
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Phillips 66 said this isn’t a direct response to the law but doesn’t have to be. As the company’s CEO said, “the long-term sustainability of our Los Angeles Refinery” is “uncertain,” which is precisely because of Newsom and California’s efforts to make it so. Since 2019, California has lost 10% of its refining capacity, more than double the national decline of 4.3%. Newsom is trying to mandate more supply while trying to eliminate demand and run the suppliers out of business. Could you blame Phillips 66 or any other company for seeing those mixed signals and deciding it is unsustainable to stick around?
California’s contradictions make running any kind of business more difficult, which inevitably leads to the higher prices that the state deals with compared to the rest of the country. Those contradictions only exist because Newsom and his Democratic allies have rushed into a future dreamed up by environmentalists who do not care about people’s lives or livelihoods, prioritizing their zealous dreams over a state that offers a sustainable environment for the people and businesses they need to get through life.