Newsom Blames Washington for High Fuel Prices While California Shuts the Door on California Oil

Governor Gavin Newsom has spent much of September blaming President Donald Trump and the federal government for soaring gasoline and diesel prices. On Monday, Newsom declared that Californians were suffering from a nationwide “gas and diesel price crisis,” arguing that global oil disruptions have left families, farmers, and businesses paying more for fuel.

One day later, Newsom signed AB 1448, legislation specifically designed to make it more difficult to produce additional crude oil off California’s own coast.

The contradiction is difficult to miss.

On September 28, Newsom suspended California’s seasonal summer-blend gasoline requirement early, saying immediate action was necessary because Californians were being hurt by rising fuel costs. His administration said the state would “keep doing what we can to bring costs down and protect consumers.”

Yet on Tuesday, the governor signed AB 1448 by Assemblymember Gregg Hart, legislation aimed at preventing existing California coastal infrastructure from supporting new oil and gas production in federal waters off California.

CIPA opposed AB 1448 throughout the legislative process, warning lawmakers that the measure would further restrict potential domestic energy supplies without doing anything to reduce Californians’ actual demand for petroleum. California already imports more than 75 percent of its crude oil, including substantial quantities produced in foreign countries operating under environmental, labor and human-rights standards far below those imposed on California producers.

AB 1448 does nothing to reduce California’s demand for gasoline, diesel, jet fuel, or the countless other products manufactured from petroleum. It simply restricts where the crude oil needed to make those products can come from.

That is precisely the contradiction CIPA raised throughout the legislative debate.

California refineries must obtain crude oil somewhere. If policymakers prevent additional production in California or nearby federal waters while petroleum demand remains, refiners do not suddenly stop needing crude. They purchase replacement barrels somewhere else. Increasingly, those barrels travel thousands of miles to California aboard ocean-going tankers.

The economic contradiction is equally striking.

Newsom has repeatedly argued that California consumers are vulnerable to volatile global petroleum markets and that rising crude oil prices contribute to higher gasoline and diesel prices. Yet policies that discourage California and domestic production necessarily increase California’s exposure to those same global markets.

California has an enormous petroleum market and substantial petroleum resources of its own. Instead of treating California production as part of the solution to supply reliability, Sacramento increasingly treats domestic production as something to eliminate regardless of whether demand has actually disappeared.

It hasn’t.

CIPA has consistently argued for a more rational approach: produce as much of the petroleum California continues to consume as reasonably possible here, where producers operate under California environmental standards, employ California workers, pay California taxes, and remain accountable to California regulators. Then, as petroleum demand actually declines, production can decline with it.

Instead, California continues pursuing the opposite sequence: suppress production first and hope demand eventually follows.

The predictable result is greater dependence on imported crude.

There is also an environmental contradiction. California imposes extraordinary environmental requirements on its own producers and then adopts policies that replace those barrels with crude produced beyond California’s regulatory reach. Imported crude must also travel to California aboard ocean-going tankers, adding transportation emissions and environmental risks associated with moving petroleum thousands of miles across the ocean.

AB 1448 continues that policy.

Global oil prices definitely affect California gasoline prices.  But California is consistently $1.50 more expensive than any other state, not because of federal policy, but due to California’s attack on its domestic energy system in favor of foreign imports.

California cannot credibly complain that its consumers are exposed to volatile global petroleum markets while simultaneously adopting policies that make the state increasingly dependent upon those markets.

As long as Californians continue driving cars, moving freight, operating farms, flying airplanes, and consuming products manufactured from petroleum, California needs oil produced here in California.