The national average is $2.76 a gallon, while Golden State drivers pay $3.88. Eco-virtue is expensive.
For most American families, the ritual summertime road trip is a lot cheaper this year thanks to plunging gas prices, propelled in part by the U.S. shale-oil boom. The average gas price nationally has dropped by nearly 25% to $2.76 a gallon over the past 12 months.
California is another story. While gasoline in the Golden State is averaging $3.88 a gallon, the average price in the Los Angeles market shot up 65 cents this week to $4.30 a gallon, about 20 cents higher than a year ago. Gas prices surpassed $5 per gallon at some stations, hitting $5.49 in downtown L.A., according to GasBuddy.com.
As usual, purported consumer activists are blaming collusion among putatively monopolistic oil companies. The real culprit is anti-carbon regulation promoted by a cartel of green activists and liberal politicians that is aimed at raising energy costs to discourage consumption. Sticker shock at the pump, like water rationing and high electric rates, is the price Californians must pay for their environmental virtue.
For most of the 1980s and ’90s, Californians paid roughly the national average, according to U.S. Energy Information Administration data. Since 1999—the year Democrat Gray Davis assumed the governorship following 16 years of Republican leadership—California gas prices have sizably surpassed the national average and most of the lower 48 states, principally due to more stringent fuel regulations. California gas taxes are also about 12 cents higher than the national average.
In 1999, Mr. Davis’s Air Resources Board banned the fuel additive MTBE—a smog-reducing oxygenate that in low quantities has been detected in groundwater. It also adopted cleaner “reformulated” fuel standards that raised production costs. A tiramisu of other environmental mandates have been layered into the state’s fuel standards.
The results? By 2006 Californians were paying 23 cents more than the national average for regular gas. The disparity increased to 40 cents in 2014 and now sits at $1.11.
Next to crude, electricity ranks as refiners’ largest production cost. Electric rates like gas prices have soared in California thanks to the state’s mandate that requires that renewables make up 33% of the state’s electricity by 2020. Gov. Jerry Brown and Democratic legislators have proposed raising the mandate to 50% by 2030.
