Gas prices in California will rise with the transition to carbon-based fuels

California motorists buy and consume a billion gallons of gasoline every month and are highly sensitive to gasoline prices, which are markedly higher than in other states. Naturally, this is a political football.

Gov. Gavin Newsom has repeatedly characterized refineries as price gougers, although much of the difference is caused by taxes, fees and regulations. He recently persuaded the Legislature to pass a watered-down version of his proposal, requiring refiners to maintain higher inventories to avoid price spikes.

But the gasoline situation is far more complex than Newsom’s approach, and California could face a period of instability in both supplies and prices as it tries to wean itself off fuel-burning vehicles, its biggest source of greenhouse gas emissions.

The California Air Resources Board is on the verge of expanding its program to reduce the amount of carbon in the current gasoline recipe, seen as an interim step before completely converting vehicles to electricity or some other clean energy.

Last year, CARB published an analysis of a proposed low-carbon fuel standard to provide “economic incentives for the production of cleaner fuels such as electricity, hydrogen and biofuels that are needed to replace fossil fuels and reduce emissions in the transportation sector.”

The report estimates that adoption of these amendments could immediately increase gasoline prices by 47 cents per gallon, and then, “on average, from 2031 to 2046, the proposed amendments are projected to potentially increase the price of gasoline by $1.15 per gallon.” , the price of diesel fuel by $1.50 per gallon.” gallon and fossil aviation fuel at $1.21 per gallon.”

The cost estimates generated a flurry of media and political attention, and CARB backed down, moving ahead with the adoption process but refusing to provide a figure for the pump’s potential price. Last week, a senior council official held an electronic press conference in which he emphasized the positive impact but continued to sidestep questions about the impact on consumers.

“It’s a win-win,” insisted chief executive Stephen Cliff. “We are delivering public health benefits, reducing healthcare costs, seeing lower driving costs and helping to accelerate investments in clean energy infrastructure that help secure our zero-emission future.”

CARB now intends to act on the policy three days after Election Day without offering any estimate of consumer costs—a potential signal that those costs will be enormous.

While Newsom wants to be remembered as the man who tried to lower gas prices, his governorship will likely be the one that substantially raised them.

Another uncertainty is whether California will have enough gasoline, even lower-carbon varieties, over the next two decades as it transitions away from carbon-based fuels entirely.

California once had dozens of refineries producing the state’s unique fuel blend, but in recent years there have been only nine left. After the Legislature passed Newsom’s new gasoline inventory laws, one refinery, Phillips 66, announced it would close its Southern California plant, which is no longer profitable. The company said the closure had nothing to do with politics.

Very quickly, Valero, which owns two oil refineries in the state, hinted that it might follow suit. CEO Lane Riggs said during a conference call that “all options are on the table” for the company’s two California refineries, one in Benicia and the other in Wilmington, due to increased government regulation of operations.