California embraces the big oil pivot to curb potential gas supply shortages. Who would have seen this one coming? Just about everybody. Let’s get into it.
The Chickens Come Home to Roost: California’s Energy Crisis
Here we are, folks. The Golden State is scrambling as California gas prices threaten to spiral out of control, with projections suggesting they could hit a jaw-dropping $8.43 per gallon. And what’s Governor Gavin Newsom’s brilliant solution? Roll out the red carpet for the same oil companies he’s spent years demonizing.
The California Energy Commission just sent Newsom a letter with recommendations as two major refineriesβPhillips 66 and Valeroβprepare to pack up and leave the state. That’s a 17% reduction in refinery capacity, but hey, who’s counting? Apparently not the policymakers who created this mess.
The Numbers Don’t Lie: California’s Fuel Supply Crisis
Let’s break down what we’re looking at:
- Current average gas price in California: $4.56 per gallon (AAA data)
- Projected worst-case scenario: $8.43 per gallon (USC study)
- Refinery capacity loss: 17% with two major closures
- Comparison: Texas gas averaging around $4.50, Seattle at $4.79
“$4.79 and these guys are pitching about $4.55. Oh yeah, I’ve got nothing,” as one observer noted. When Seattle residents are paying more than Californians, you know something’s about to break.
Newsom’s Oil Policy Reversal: Political Maneuvering at Its Finest
This is decades of anti-fossil fuel policy in California coming full circle. Years of virtue signaling about clean fuel alternatives and electric vehicle mandatesβincluding the ban on new gas car sales by 2030βuntil reality hits and refineries start leaving.
What does Newsom’s pivot look like? Suddenly, the same governor who championed strict refinery profit caps and environmental regulations is now:
- Expanding oil production in Kern County and Southern California
- Investing in port infrastructure to import more refined gasoline
- Encouraging construction of new pipelines and storage tanks
- Delaying implementation of 2023 refinery profit limitation laws
“So you mean do exactly the opposite of everything you’ve been doing to date?” The hypocrisy is staggering.
The 2028 Presidential Campaign Factor
Let’s call this what it is: political theater. Do you think anything about this pivot has to do with a 2028 presidential election campaign? Absolutely. This is politics at its bestβsay one thing out of the side of your mouth and then immediately pivot and go, “Ah, big oil is great. I don’t see the problem.”
Newsom is attempting to thread the needle, balancing his progressive climate policy record with national ambitions. He’s seemingly moving from the progressive governor of California toward a stance that could be more palatable on the national stage.
Why Big Oil Companies Are Running from California
If you’re a major refinery, why would you stay in California when faced with:
- Hostile regulatory environment
- Profit limitation laws
- California’s unique fuel blend requirements
- Environmental compliance costs through the roof
- Constant political attacks on the industry
You wouldn’t stay. And no matter what kind of backflip Newsom does now, the damage is done. Even if you roll out the red carpet at this point, companies like Phillips 66 and Valero are already gone.
The Real Cost of Environmental Virtue Signaling
California’s specific policies have created this crisis. The state demands its own special gasoline blendβcleaner than everywhere elseβat the expense of what constituents pay at the pump. Did voters demand that clean gasoline specifically? No. But they voted for the policies and elected officials who made this happen.
Notice how Newsom tries to deflect responsibility by pointing to refineries closing in Texas and claiming this is a nationwide issue. But we’re talking about California-specific policies that have caused California gas prices to soar and driven refiners away.
Short-Term Fixes Won’t Solve Long-Term Problems
The California Energy Commission will consider pausing implementation of the 2023 law that authorized profit caps on refiners. Newsom had championed that law, and now he’s willing to rescind it. But this looks like a temporary maneuver to prevent a price spike right before presidential campaign season.
Even environmental groups are skeptical. The Sierra Club remains “agnostic” on the governor’s shift, while consumer advocates criticize the flip-flopping approach to gas industry regulation.
The reality is that refineries are leaving, and these short-term fixes may not resolve the underlying fuel supply constraints. Whether these moves will convince any refinery to stay or new buyers to emerge for the Valero plant remains uncertain.
What This Means for California Drivers
As California decarbonizes, refineries are shuttering fastβand consumers are left holding the bag. The state’s transportation fuel markets are becoming increasingly unstable, and drivers are facing the consequences of decades of short-sighted policy.
We’re at a tipping point. When you constrict the supply of oil into your state, it creates a triggering effect throughout the region because California drives so much economically. Everything needing fuelβtrucks, transportation, commerceβgets impacted.
What are your thoughts on California’s energy policy reversal? Have you noticed gas price impacts in your area? Share your experiences and predictions for where this crisis heads next.
