Late Friday, November 8, the California Air Resources Board (CARB) voted to update its Low Carbon Fuel Standard (LCFS). At last tally, California was the second-highest state in the nation in terms of pump prices. And CARB’s chairman admits the new update will indeed increase the cost of fuel at the pump. How much will California gas prices rise? What’s behind the LCFS tweak? And, hold on to your hats—and wallets. The California change may affect those outside of the Golden State.
Why California gas prices will go up
California’s LCFS plan is in place to “wean” California drivers off fossil fuels and promote non-polluting cars like EVs. In CARB’s words, “The LCFS reduces air pollution and greenhouse gas emissions by setting a declining carbon intensity target for transportation fuels used in California; producers that don’t meet established benchmarks buy credits from those that do. This system has generated $4 billion in annual private sector investment toward a cleaner transportation sector.”
In other words, refinery owners will need to reduce the amount of high-carbon fuels they produce, or spend money to buy fuel credits from other companies. For the final consumer, you and me at the gas station, the cost of those credits will be passed right on to us. How much will it cost?
How much will California gas prices rise?
It depends on who you ask. CARB suggests that the price hike would be relatively small. “How oil producers pass through compliance costs for required pollution reductions is a business decision they make and they have several options to meet targets. Current self-reported data from fuel producers points to a pass-through cost of $0.08 – $0.10 a gallon due to LCFS,” said Lys Mendes in an email to ABC7 news. Mendes is CARB’s communications director.
But a report by the Kleinman Center for Energy Policy states Golden State gas could require a lot more gold to buy—and very soon. The center issued a report that says, “If LCFS credit prices reach their maximum allowed levels, as has occurred in the past, then retail gasoline price impacts could be $0.65 per gallon in the near term, $0.85 per gallon by 2030, and nearly $1.50 per gallon by 2035.” The Kleinman Center is a research group, part of the University of Pennsylvania.
Just because you’re not in California doesn’t mean you won’t get hit
Not a California resident, and don’t plan to drive in the state? You may be thinking the CARB changes won’t affect you. But hold on, even California’s neighbors may be hit by the tweak. Neighboring states Nevada and Arizona obtain much of their gasoline from California refineries. That pass-through of up to 65 cents “in the near term” could be etched on fuel pumps in those states, too.
But the effects of the California regulation change may reach out even farther—to states clear across the country. California gas prices have a much broader reach. Do you buy produce or other foods grown in California? Is any of the stuff you buy off store shelves or on the internet shipped to the U.S. through California ports? The higher fuel costs coming from the tweak in the California regulation will hit both producers and transporters of food and imports. You can bet the bank that those higher costs will come down to you in an unexpected bit of inflation.
CARB says its new regulatory tweak will increase California gas prices eight to ten cents a gallon. Others say look to see an immediate jump of 65 cents a gallon, and up to $1.50 in ten years. Which figure is right? It won’t be long before all of us see.
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Allot of MAYs, MIGHTs and COULDs in this article. Unless you live in CA, I don’t see this having much of an impact on fuel or other prices in my state (PA). In my opinion, one upside to all these folks buying EVs (over 1M/yr in US)- this is permanent demand destruction for fossil fuel for transportation. Less demand – lower prices. This should help keep fuel prices in check for those of us who still purchase diesel/gas.
I completely agree with your market manipulation assertion even though the driving force for it is artificial in as much as coal powered autos create more pollution than gas and diesel powered autos.
Real pollution is the billions of tons of CO2 and particulates going into everyone’s air from Cali constantly being on fire. Perhaps a national tax on Cali for all that green house gas/global warming impact ! 😉🙂
Beautiful!!!!!
I think you’re on to something! 😄
Sigh! Unelected officials making decisions with heavy consequences for the end users, with nothing but pats on the back for themselves..
Is California trying to get their “air quality” down to pure oxygen?? Naw, that ain’t gonna work either. Is there more helium in California air than in the rest of the nation?
I think it’s probably cannabis in the Sacramento air..🤫
Ohhhh…yeah, man! That’s cool……. ya breathe California air and you don’t care about gas price man …. Cool ….
LOL. 😅🤣😂
By design, maybe? keep everyone numb and the pain being inflicted seems lower?
Seems to work at the ballot box for the majority (😢) of voters anyways
Sorry M.M, but it really does seem to be a political issue.
🤐 Isn’t just about everything these days?🫤 Have a good night, Bill. 😀 –M.M.
Sadly, it sure seems so. Enjoy your evening as well
I am. Thanks, Bill.🤗 –M.M.
There isn’t anything that isn’t political anymore. I agree with Diane.
Thanks, Tommy and Bill. Yes, we can write about the most innocuous topic and within a short time the comments turn into political rants and folks are bashing each other. Sheesh!🫤 Have a great day. 😀 –Diane
Guess who says he will “fix it”.
And he will, promises made promises kept, don’t like it continue to pay your high prices for gasoline and get over it.
GOD?
Unelected bureaucrats destroying a State. How wonderful!
They hide in their Ivory Towers and dream up new ways to make the taxpayers suffer.
Exactly! Those all worried about the loss of democracy apparently don’t understand the definition. This is exhibit A
Do any of the rv travel readers any other news sources. Just look at the weather around the world. Global warming is real. I realize most of the current readers won’t be around when it gets really bad. But my kids and grandchildren will be. SOMETHING NEEDS TO BE DONE SOONER RATHER THAN LATER.
Did you know the USA is not even in the top TWENTY air polluting countries? We have the nearly the best air quality in the world. It’s countries like Pakistan, India, China, Chad Bangaladesh UAE that need to get a handle on pollution Bob.
Sure do. Check out what Energiewend has done Germany. Destroyed the most powerful economy in Europe while sending their high-carbon manufacturing jobs to China and India, where they couldn’t care less about carbon boot prints.
Suckers!
Climate change has been occurring for millions of years. The debate is, can humans alter change.
Awesome. Making fuel 2 or 3 more times expensive will finally get the poor people off the highways and out of the campgrounds, making my experience so much better. And I get to feel good about saving the planet. Thanks!
/sarc
As a life long North California resident, don’t be fooled by the soft pedaling. This is another of Gavin News**ms penalties for using fossil fuels. We will probably see $6.50 to $7.00 a gallon gas become “normal”.
Thank you, Russ and Tina! Interesting. Yes, could and probably will be an increase in prices, but only in relative prices, not economy-wide prices. So, is not “inflation” in an economic sense. Have a great day and safe travels!
Thanks again, Russ and Tina! The warning that California regulation changes will affect surrounding states is real. Fourteen of the 26 west coast refineries are in California and they have about two-thirds of the production capacity of the west coast (i.e., PADD 5). Happy new year!
The common denominator here in CA is Carb’s thinking is that the end will always justify the means. To me, this means that there is no limit to what new taxes they will impose on us here in California in order to create their ‘utopia’!.