The Regulatory Zealot Behind California’s Surging Gasoline Prices

Since Gov. Gavin Newsom returned from his 3,000-mile trip to visit constituents in El Salvador, gasoline prices have risen above $4.00 a gallon, by some accounts a full $1.18 more than the national average. The governor suspects “inappropriate industry practices,” and Attorney General Xavier Becerra wants an investigation of an “unexplained gasoline surcharge” that Assemblyman Mark Levine denounces as “a punitive, abusive practice that Californians are paying.”

These officials ignore the reality that, as Christian Britschgi noted in Reason, “state government policies are a huge component of the final price everyone is paying at the pump.” Embattled Californians should be taking a hard look at those policies and the unelected regulatory zealots who support them. Consider, for example, California Air Resources Board boss Mary Nichols.

At a Reason conference way back in 1990, Nichols touted gasoline prices of $5 a gallon as a good thing, with no apparent concern for the millions of workers who must drive to their jobs. The CARB boss is doubtless delighted as gasoline prices approach that mark.

Mary Nichols is a lawyer, not a scientist, and has never seen a regulation she didn’t like. She left CARB in 1983 and ran Tom Bradley’s gubernatorial campaign in 1986. Bradley lost and Nichols became director of Norman Lear’s People for the American Way and founded the Los Angeles office of the Natural Resources Defense Council, where she served as senior attorney. During the Clinton administration, Nichols worked for the federal Environmental Protection Agency as Assistant Administrator of Air and Radiation, followed by a stint with the Environment Now Foundation.

Nichols returned to CARB in 2007 at the request of Republican Gov. Arnold Schwarzenegger, and Nichols championed AB 32, the “Global Warming Solutions Act,” with a host of new regulations and restrictions. Gov. Jerry Brown reappointed Nichols in 2011, and on her watch CARB operates with a budget of more than $860 million.  Gov. Newsom, for his part, might  look in the mirror if he truly finds high gas prices disturbing.

“As lieutenant governor,” Christian Britschgi recalled, “Gavin Newsom supported a 2017 bill increasing the state’s gas taxes. When running for governor in 2018, he opposed a ballot initiative that would have repealed that same increase.” In addition, “California imposes the second-highest gas taxes in the country. A state excise tax currently adds $.417 per gallon, a rate that will increase to $.473 come July. On top of that, the state imposes a 2.22 percent gasoline sales tax.”

And for good measure, “California has adopted a low-carbon fuel standard and a cap-and-trade scheme for carbon emissions which together increase the state’s gas prices by $.24 per gallon above the national average.”  Britschgi concludes that “absent these policies, the state’s gas prices would be lower,” but there’s more to it.

In the Mateca Bulletin, Dennis Wyatt cites the state’s more costly gasoline blend as “a driving force behind our high gas prices.” For decades, the state has allowed no new refineries to be built, and as the state energy department explains, “from 1985 to 1995, 10 California refineries closed, resulting in a 20 percent reduction in refining capacity.” That affects supply, and “the cost of complying with environmental regulations” obviously affects price.

On the other hand, promoters of environmental regulations do not find petroleum and refine it into gasoline. The much-maligned “oil companies” do that. Bureaucratic regulations make the product much more expensive than it needs to be, with little if any regard for the workers who must drive to their jobs.

California workers should understand that Gov. Newsom backs all the regulations that make gasoline cost $4.00 a gallon and beyond. California workers should also understand that regulatory zealot Mary Nichols wants them to pay even more, and unlike the governor, the queen of CARB never has to face the voters.