In just a few years, thanks to Gov. Gavin Newsom’s (D-CA) greedy, unnecessary, and punitive environmental regulations, the former Golden State has lost two refineries.
Chevron skedaddled to Houston in 2024. Valero is taking a one billion dollar hit to get the hell out by next year.
Already, Democrat-run California is forced to import some 40 percent of its oil from the Bahamas.
Why does this matter? What does it have to do with cost?
It’s pretty simple… The further oil must be transported, the more cost is involved, and that cost is ultimately paid by the everyday consumer in the form of gas prices.
As of today, the nationwide average cost for a gallon of gas is $3.20. The average cost of a gallon of gas in California is $4.81. That outrageous difference is caused by only one thing: insane Democrat Party policies, regulations, and taxes. California is oil-rich. California was once one of the states that led America’s oil boom.
No more.
And what killed it was the Democrat Party’s ongoing war on affordable energy.
Here’s Chevron’s warning to Newsom about the state’s cap-and-trade program:
“The proposed regulation will cripple the survivability of the state’s remaining refineries, which will result in California losing the entire industry to this misguided program,” reads the letter in part. “This regulation will increase transportation and aviation fuel prices for consumers. It will risk significant job losses, including many high-paying union jobs, while reducing funding for essential public services. It will upend California’s fuels market and threaten critical energy and national security assets.”
Cap-and-trade, which is now called cap-and-invest, works like this…
The state decides how much carbon is allowed into the air each year. The big carbon producers (like oil refineries) are given allowances that are like tickets. Each year, these companies are required to buy (through an auction) a ticket for every ton of carbon they intend to create. The catch is that the total number of tickets given to California companies as a whole represents how much carbon the state will tolerate that year. In other words, the pie is only so large, so there are only so many tickets you can buy.
If you produce less carbon than your ticketed amount, you can sell your remaining tickets to companies that produce more carbon than their ticketed amount.
Each year, to reduce carbon emissions, fewer tickets are distributed. The pie gets smaller.
The program was originally supposed to end in 2030 after hitting a specific carbon goal. Newsom threw the whole thing up in the air when he extended the program to 2045.
Big corporations are not opposed to taxes and regulations. In fact, they like onerous taxes and regulations because the more expensive it is to do business, the less likely a competitor will rise. Competition scares Big Business more than taxes and regulations. One thing Big Business must have, though, is the ability to look into the future. They want stability. They want to know what will happen next.
For example…
One of the primary reasons the American economy was so stagnant during the Obama presidency was uncertainty. Obama kept threatening to raise taxes, and no one knew how Obamacare would shake out. After the 2008 economic collapse, the economy should’ve roared back. It didn’t because no one knew what Obama would do next. Uncertainty kills growth like nothing else.
So imagine you’re a California corporation dealing with this cap-and-trade insanity. What made it tolerable was that 2030 deadline. Okay, I can make it to 2030. Then Newsom comes along and — boom — no, we’re gonna keep shrinking the pie for another 15 years.
Then you add this insane wealth tax proposal, which could even be retroactive.
Cap-and-trade has nothing to do with the environment. The environment is fine. It’s just a money grab, which isn’t anything new. But with taxpayers fleeing and deficits looming, Newsom and Sacramento’s Democrats are becoming so greedy and desperate that they are undermining certainty with these proposals, and that’s the one thing Big Business cannot tolerate.
Let us all sit back now and enjoy the spectacle of California getting what it voted for.
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