Newsom’s California: Slouching Towards A Self-Inflicted Energy Crisis
California appears to be headed towards an energy crisis of its own making. The state’s gasoline prices at the pump are high and could go higher if a key piece of infrastructure goes out of business due to the state’s harsh regulatory environment in the coming months.
As millions of Americans currently enjoy gasoline prices under $3.00 per gallon, California’s gas price remains $1.55 above the national average according to AAA. Almost all of the difference is attributable to the state’s onerous gas tax regime, as detailed by the U.S. Energy Information Administration. Hawaii has the 2nd highest gas prices, but that state has no choice but to import all of its oil needs. California doesn’t have that excuse – its high costs are entirely self-inflicted due to choices made by the state’s government.
Loss Of Critical Infrastructure Leads To Energy Crisis
California’s situation with gas prices and supplies threatens to grow significantly worse with the impending closure of its sole remaining major south-to-north oil pipeline. On October 25, USC Professor Michael A. Mische, UC Berkeley Professors James W. Rector, and Joseph B. Silvi issued a policy brief in which they lay out the various factors that have led to the state’s energy dilemma.
From the report: “California’s in-state oil production has declined by approximately 65% since 2001, while its dependency on foreign imports has risen by nearly 70%. At the same time, refinery capacity has fallen 21% since 2023 and gasoline demand remains largely unchanged at roughly 36–40 million gallons per day. SB 237, designed to permit up to 2,000 new wells annually in Kern County, will add some production but not enough to offset the overall statewide decline and will not adequately stabilize the state’s petroleum infrastructure.”
