Opinion: California Gov. Gavin Newsom is waging war on gas and oil, and his policies could force Arizona to pay part of the tab.
Phil BoasArizona Republic
As neighbors go, I’ve always thought of Gavin Newsom as basically harmless, another big-mouth, small-game California governor trying to manage a state that is essentially ungovernable.
But it turns out I was wrong. Gavin Newsom is not harmless. In fact, his fantasies of turning California into the embodiment of the Green New Deal have become expensive for neighboring Arizona and Nevada.
Newsom, who either slept through Economics 101 or is lying — I’m guessing both — blames California’s highest gas prices in the nation on the “greedy” oil companies.
California wants another tax on Big Oil
His solution is to put a cap on oil company “profits” and essentially tax — once again — the oil companies for having the audacity of doing what all businesses do, which is try to maximize profits.
Newsom’s plan has the potential to impose new costs on California refineries that will be passed on to consumers and will push California toward $6-per-gallon gas, Wall Street Journal columnist Allysia Finley writes.
Here’s the problem for the neighborhood.
Arizona gets roughly 50% to 60% (depending on the source) of its gasoline from California refineries. (The other portion comes from New Mexico and West Texas). Nevada gets 88% of its fuel from California.
When California imposes greater costs on business — which it has a long history of doing — business in turn passes those costs on to consumers.
If California gasoline is about to get more expensive, so is Arizona’s and Nevada’s.
Nevada balks and Gavin Newsom spits fire
On May 14, Nevada Gov. Joe Lombardo, a Republican, wrote a tactful letter to Newsom, saying, “it’s no surprise that California’s fuel policies significantly impact the costs and availability of fuel for Nevada’s residents and businesses.
“With that in mind, I wanted to express my concerns about the unintended consequences of California’s SBX1-2 legislation, which could further raise gas prices for both of our constituencies.”
In response, Lombardo got the frothing, seething Newsom, not the amiable putz we’ve grown accustomed to.
“This is a stunt to appease Governor Lombardo’s Big Oil donors, who contributed tens of thousands of dollars to his campaign,” Newsom responded through a spokesman.
“He’s parroting their talking points, and he knows full well that oil refiners are driving up gas prices and making massive profits — harming residents of both of our states.”
Oh, please.
No wonder California gas prices are so high
Even California lawmakers are starting to raise concerns about Newsom’s plan to make gas even more unaffordable for California motorists.
Democratic Sens. Josh Newman and Susan Rubio pushed back against the state’s bureaucrat monitoring the petroleum market, wondering if factors other than greed might be pushing California gas sky high.
It’s not enough that California has slapped the highest taxes and fees on oil companies of any state in the nation.
It’s not enough that California shut down roughly 60% of its refineries built over the last 100 years.
It’s not enough that California gas prices are already the highest in the nation at $5.20 gallon. (The national average is $3.59).
Now California wants to impose a “price gouging penalty” on oil companies to “deflect attention from the costs of (Newsom’s) own bad policies and to raise more revenue,” The Journal’s Finley writes.
Its assault on the oil industry hurts Arizona
Greedy oil companies?
Here’s how the oil companies responded to Newsom through their Institute for Energy Research:
“Gov. Newsom stated that high prices are caused by ‘illegal price gouging by greedy oil companies.’ His claim does not answer the obvious question — why are oil companies only greedy in California? Why are oil companies in places like Oklahoma, Wyoming, and Kansas, where gasoline prices are nearly $2 per gallon lower than in California, not greedy?
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“The obvious answer is that California’s unique taxes, fees, and regulations drive prices higher in Newsom’s state.”
They also invite consumers to look at the map at Gasbuddy.com to see for themselves how California’s high gas prices “bleed over into surrounding states,” such as Arizona.
How Arizona, Nevada can fight back
What can Arizona and Nevada do?
Simple.
Gavin Newsom wants something from Arizona and Nevada. He’s made the two battleground states in the approaching 2024 presidential election part of a special project getting his “time and energy and focus.”
He wants Arizonans and Nevadans to vote for Joe Biden.
When asked, the obvious response doesn’t require words.
Just laugh.
Phil Boas is an editorial columnist with The Arizona Republic. Email him at phil.boas@arizonarepublic.com.
