By Debra Kahn, POLITICO
GAS PRICE RODEO: Gov. Gavin Newsom is essentially ensuring a debate about California’s high energy prices extends deeper into election season.
His move Saturday to call a special legislative session in Sacramento focused on gasoline price spikes is something of a bet that running headlong into the Democrat-led state’s political vulnerabilities will turn them into an asset.
“The next time there’s a price spike at the pump, we can remind people there’s a solution ready to go,” Newsom spokesperson Bob Salladay said. “The governor wants to stop the roller coaster at the pump, which only benefits Big Oil. This plan will do that.”
Gas prices in California right now are not sky-high — they’ve actually been tracking less than a dollar per gallon above the U.S. average for the past month, which is pretty good considering they’re usually at least $1.10 higher than the national average, according to Jamie Court, president of the advocacy group Consumer Watchdog.
And Newsom has tamped down gas prices the two previous autumns by authorizing the early sale of winter-blend gasoline, which is made with cheaper ingredients but produces more pollution when it interacts with warmer air.
But they’re creeping higher — the differential is $1.12 per gallon today, per the U.S. Energy Information Administration. Newsom wants to have another tool ready for when refineries go offline for maintenance and supplies get tight, which is why he’s proposing to give the California Energy Commission the ability to mandate refiners keep more supplies on hand.
Lawmakers in the Assembly balked at passing his plan last week, fearing it was rushed, while Senate President Pro Tem Mike McGuire said he’d had the votes and didn’t want to do a special session, which could run through November.
The legislative slugfest has already begun on the right: The National Republican Congressional Committee today hit a half-dozen Democratic House candidates, including former Assemblymember Rudy Salas (D), who’s challenging Rep. David Valadao (R), for remaining “conspicuously silent” on the bill last week as congressional Republicans made hay.
The oil industry is signaling a fight, as well. “You would think you’d want to wrap this up sooner and cleaner, or wait, rather than drag more politicians through what will be a probably pretty ugly fight,” said Western States Petroleum Association spokesperson Kevin Slagle.
This is all separate from the question of whether the supply mandate would actually work. University of California, Berkeley, economist Severin Borenstein, who coined the phrase “mystery gasoline surcharge” to describe the remaining difference between gas prices in California and other states after accounting for the roughly $1-per-gallon effect of state taxes and fees, said it’s not a bad idea — even though its effect won’t be felt until well after the election.
“Every politician has political motivations for everything they do, but I think he can certainly justify saying we need to be doing something about this,” Borenstein said.
Borenstein cautioned that Newsom’s proposal would be complicated to implement. And it would only address the price spikes — not the underlying reasons for California’s perpetually higher prices. Those include the state gas tax and environmental programs like cap and trade and the state’s low-carbon fuel standard (which is scheduled for a Nov. 8 vote to tighten supplies, which would also drive up gasoline prices), as well as the remaining price gap that the Energy Commission has been investigating.
“It is a potential solution to the occasional very high price spikes due to a physical supply shortage,” he said. “But that’s not most of why we pay high prices for gasoline in California.” — DK, BB
