Whether Politicians Like It or Not Gasoline Is California’s Life Blood

The Field Poll reports that for the first time in seven years more California voters believe the state is moving in the right direction (50 percent) than feel it is on the wrong track (41 percent). Those living in coastal California are much more likely to have a positive outlook on our state’s future than inland residents. And Democrats are more optimistic than Republicans, so it may be safe to assume that Democrats living in Malibu, Silicon Valley and the Bay Area are much happier than Republicans living in Central Valley and other areas with high unemployment.

Like politicians everywhere, California’s governing class will attempt to claim credit for this reversal of what had been nearly unanimous pessimism.  Moreover, they will also claim that this is vindication of progressive policies that have given California one of the most harsh tax and regulatory environments in the nation.

However they explain the voters’ optimism, they are unlikely to bring up the one thing for which they can claim no credit whatsoever; the lower gas prices that existed during the period the poll was conducted, January 26-February 16, just before the cost of a gallon of gas began to vault upward again.  With prices in late January down almost 2 bucks per gallon since the high in 2014, many Californians have had reason to smile. It is also interesting to note that the last time more voters than not were positive about their state, gas prices were also down.

Even if there is not an exact correlation, when drivers who fill up their cars two or three times a month see that they are saving money, they are definitely in a better mood.What is ironic is that while the Sacramento political class may want to take credit for voter optimism, they have been working overtime to keep the cost of gasoline high. Between the high gas tax and the additional “carbon tax” imposed on manufacturers that is putting upward pressure on prices, the politicians have proven they are no friend of the millions of average folks who must depend on their cars for transportation.  According to State Board of Equalization Member George Runner, even with the price dip, Californians in January were paying as much as 47 cents more per gallon than drivers in other states.

Acknowledging that gas taxes are providing sufficient revenue, the State Board of Equalization last week reduced the state gas tax by 6 cents a gallon beginning this July. The reduction is based on a formula enacted by the Legislature in 2010, a formula that is so complicated that most news reporters don’t understand it.  Runner rightfully objects to this confusing system that hides the actual cost of the gas tax by hiding the second carbon tax that is only reflected in the overall price.  Currently, Californians pay about 64 cents per gallon in taxes and fees — the second-highest rate in the nation — but we become number one when the hidden tax of about 15 cents is added in.

If the Sacramento politicians really want to see voters smile, they should lay off trying to increase costs for the millions of Californians who depend on their cars to go to work, take their children to school and to do the weekly shopping.  Because one thing is certain – the optimism that Californians are feeling now will disappear in a heartbeat if gas prices return to what they were less than a year ago.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Political Attacks on Gasoline Designed to Create Conflict

The Western States Petroleum Association is strongly opposed to legislative or regulatory mandates designed to force a 50 percent reduction in gasoline and diesel use in California by 2030.

Mandates to force reductions in gasoline use are not climate change policies.  They are attacks on an important industry in California designed to create conflict and controversy.

A mandate to reduce petroleum consumption by 50 percent is an impossibly unrealistic goal.

SB 350 by Sen. de Leon gives the unelected California Air Resources Board open-ended authority to adopt mandates by regulation to achieve unrealistic cuts in gasoline and diesel use.

History tells us two things; mandates designed to achieve a goal of this magnitude will require unacceptably coercive restrictions on our mobility choices and will be crushingly expensive.

Achieving so radical a goal in so short a time will require the removal of 8 billion gallons of gasoline and diesel from our fuel supply annually – with no guarantees that something will be available to replace them.

This proposal is a major distraction from the much more important work that must be done to move California’s climate change agenda beyond the 2020 horizon established by AB 32.

California’s petroleum producers and refiners will be participants in shaping those policies so we can continue the progress we have made toward achieving greenhouse gas reduction targets.

It is one thing to establish goals like those identified in the Governor’s inaugural address and to use those goals to measure the effectiveness of climate change policies.  It is another thing entirely to empower an unaccountable regulatory agency the authority to impose regulations to achieve those goals.

We look forward to working with the Governor and the Legislature to develop serious climate change policies and programs that will move us toward a lower carbon future.  We urge legislators to reject Sen. de Leon’s proposed policy as quickly as possible so that we can get back to work on the real tasks at hand.

Catherine Reheis-Boyd is President of the Western States Petroleum Association

Originally published by Fox and Hounds Daily

Falling Gas Prices Mask Hidden Tax

So why is it that while other states are now enjoying gas prices of less than $2 per gallon, California is still paying higher prices?

Due to high taxes and costly regulations, our state’s gas prices are higher than other states. It’s been that way for years.

But what’s new is that the gap between California’s and other states’ gas prices has grown.

To get a sense of the change, compare California gas prices with those of the nation as a whole. According to GasBuddy.com, even while overall prices have fallen, the gap has grown from about 32 cents per gallon just a month ago to as much as 47 cents this January.

That’s a 15 cent increase in just one month!

The likely culprit is a new “hidden gas tax” that took effect January 1. The new regulation expands the state’s cap-and-trade program to include transportation fuels. The expansion is the latest in a series of sweeping and costly regulations developed by the California Air Resources Board as it implements the California Global Warming Solutions Act.

Luckily for the Governor and his Air Board appointees, gas prices barely budged when the new rule kicked in; in fact, prices have continued to fall, masking the rule’s true impact and ironically causing the new “hidden gas tax” to be even more hidden.

Just a few years ago gas prices were soaring dangerously near $5 per gallon. Imagine public outcry if the government had caused gas prices to soar then!

When government imposes higher costs on fuel providers, California consumers inevitably pay the price in lost jobs, income and opportunity.

As economist Severin Borenstein notes: “Every analysis of cap-and-trade — or of a gas tax or, for that matter, of movements in the price of crude oil — finds that a change in the cost of selling gasoline, up or down, is quickly and fully passed through to consumers.”

We’d likely all be paying 10 to 15 cents less per gallon if not for the new regulation. Depending on the auction price of emission credits, some fear the cost could grow far higher in future years.

Concern about the economic impact of high gas prices led to a bipartisan effort last year to postpone the planned cap-and-trade expansion. Unfortunately, Assemblyman Henry Perea’s legislation (AB 69) died when Senate President Pro Tem Darrell Steinberg refused to authorize a hearing.

Republicans have already announced a repeal effort this year in the form of SB 5 and AB 23, but it’s hard to imagine their bills will fare better.

Of course, with hidden taxes, exactly how much more we’re paying is anyone’s guess. That’s just one of many reasons hidden taxes are such a bad idea. Taxes should be transparent, straightforward and easy to understand. You shouldn’t need to hire an economist to know how much money you’re sending to Sacramento—or Washington, D.C.—each year or how it’s being used.

We do know that 25 percent of the billions in new revenue the State of California collects from its cap-and-trade system is being used to fund the state’s costly and controversial high speed rail project. Yet even with this funding source, the project—which recently broke ground in Fresno—still lacks the necessary funding to finish the job.

So next time you fill up at the pump, remember you’re helping pay for a train you won’t be able to ride until the year 2029—assuming it ever gets built.  (Even then you’ll still have to pay to ride the train.)

Maybe that’s why politicians try so hard to keep taxes like these hidden.

George Runner represents more than nine million Californians as a taxpayer advocate and elected member of the State Board of Equalization. For more information, visit boe.ca.gov/Runner.

Hydraulic Fracturing Major Contributor to CA’s Economic and Energy Future

The release of the draft EIR on Well Stimulation Operations marks an important milestone in meeting the deadlines set by Senate Bill 4. WSPA and our members are reviewing the details of the draft EIR and will continue to participate in workshops and public discussion regarding SB 4.

While we are pleased with the state’s process on implementing Senate Bill 4, it is important to note the draft EIR contemplates hypothetical development scenarios and provides a high level review.

To date, well stimulation in California has never been associated with any known adverse environmental impacts.

California has been a major producer of oil for well over 100 years.  We produce close to 600,000 barrels of oil per day, making us the third largest oil producing state in the nation, behind Texas and North Dakota. The vast majority of this production takes place in Kern County at the southern end of California’s San Joaquin Valley.

California also is home to significant shale oil resources, the largest of which is the Monterey Shale Formation that lies under large parts of the San Joaquin Valley and Southern California.

Hydraulic fracturing is a safe and proven energy production technique used to obtain oil and natural gas in areas where those energy supplies are trapped in tight rock and shale formations. Once a well has been subjected to hydraulic fracturing, crude oil or natural gas production may occur for years without additional fracturing.

Hydraulic fracturing operations occur over very short time periods, usually two to five days. Once an oil or natural gas well is drilled and properly lined with steel casing, fluids are pumped down to an isolated portion of the well at pressures high enough to cause tiny fractures in rock formations thousands of feet below the earth’s surface. These fractures allow oil and natural gas to flow more freely.

Hydraulic fracturing is a common well stimulation technique that has been linked to America’s dramatic domestic energy resurgence and economic recovery. Most notably, hydraulic fracturing is connected with natural gas production in parts of the Northeast and Intermountain West regions of the United States and with oil shale production in North Dakota and Texas. Hydraulic fracturing, a technology that has been used safely for more than 60 years, has played a critical part in helping the United States become energy independent.

Energy producers in California continue to fuel the West with affordable and efficient domestic energy and are major contributors to the state’s economy and energy future.

 is president of the Western States Petroleum Association

This article was originally published on Fox and Hounds Daily

CARTOON: Carbon Tax Grinch

Carbon Tax

Rick McKee, The Augusta Chronicle

CARTOON: Cheap Gas

Cheap Gas

Nate Beeler, The Columbus Dispatch

Time for a Real Debate on the Cost of Climate Programs

Finally, it’s here. A spirited, inclusive, and extremely critical debate over the true costs of California’s climate programs to our economy, small businesses, and working families.

On the heels of an abysmal voter turnout in this month’s election, the emergence of a growing chorus of diverse voices on a vital public policy issue should be welcomed news. It turns out, however, that certain state officials and other vested interests are not interested in debating the costs imposed on small business by California’s broad environmental policies.

But their actions have awoken a sleeping giant. Although CARB made no effort to hear concerns, and debate was shut down in the state legislature, people who are learning about the “hidden gas tax” have started speaking up and working together. From small business owners in the Bay Area to farmers in the Central Valley, religious leaders in San Diego to a mobile health clinic operator in the Inland Empire, consumers from throughout the state are banding together. This movement of drivers and fuel users has serious questions and concerns about the unilateral process used to increase household costs, particularly at a time of high unemployment and economic uncertainty.

To date, the cost of California’s programs to reduce greenhouse gases, subsidize the development of alternative energy, and change consumers’ purchasing choices and modes of transportation has been perceived by many to be someone else’s problem: large industrial energy users.

In this dynamic, the cost to real people – and the disproportionate burden on the low-income – has been mostly invisible, but still very real. As a result, everyday voters have been left out of the debate, which has been limited to just a few interests: industry, government, the environmental lobby, and those who benefit financially from cap-and-trade revenue.

Enter the “hidden gas tax,” the California Air Resources Board’s (CARB) plan to expand its cap-and-trade program to gasoline and diesel next January. For the first time, state government is knowingly imposing the cost of its climate programs onto consumers in the form of higher fuel prices.

In response…CARB offered no response at all. They denied that their program was intended to raise costs or that fuel prices would increase next year, despite the fact that their own expert advisors were stating publically that prices at the pump would go up significantly.

What’s more, CARB claimed this wasn’t an issue of consumers. Rather, it was an “oil industry” issue. They went one step further and claimed that drivers didn’t need a public forum on the “hidden gas tax” because the board had held various workshops over the years attended by…you guessed it…environmental groups, bureaucrats, and big business and industry.

In short, CARB only wants to debate “Sacramento insiders,” not the millions of impacted Californians.

So it goes with the environmental lobby. At every turn, the organizations voicing concerns about the hit on jobs and working families have been dismissed as “front groups” and marginalized as “Astroturf”—all part of an elaborate oil industry “conspiracy.”

To their way of thinking, there are only two points of view: theirs and the oil industry. Either you buy into their worldview lock-stock-and-barrel or you are just a puppet on a string. If you’re looking to create your own space in the debate, they are not about to oblige. Unfortunately, every person in the state is impacted by their policies every time they make a purchase or drive their car.

These groups could promote the benefits and the costs of programs to combat climate change and welcome a vigorous debate. Instead, they would prefer to shoot the messenger and silence those with whom they do not agree.

Doubling down on ad hominem attacks may make for salacious blogs and sensational news copy, but it won’t keep the debate at bay for long. It is time for every Californian to ask questions and fight for their right to be heard by those charged with representing them, and not accept being told “it’s in your best interest”. So bring on the debate!

John Kabateck is California Executive Director, National Federation of Independent Business

This article was originally published on Fox and Hounds Daily