Newsom Regulators Vote to Hike Gas Prices in California, Nevada, and Arizona

Late Friday evening the California Air Resources Board (CARB) approved new amendments to the Low Carbon Fuel Standard (LCFS), likely sending gas prices in California, Arizona, and Nevada higher beginning next year. 

California’s LCFS program was established in 2011, ostensibly to reduce emissions from transportation. However, the new amendments – , which target a 30 percent% reduction in carbon intensity by 2030 and a 90 percent% reduction by 2045 – , will increase a variety of costs for energy producers and are anticipated to materialize in higher prices at the pump, an especially painful reality in California where gas prices now average $4.52 per gallon.  

LCFS Amendments Increase Gas Prices As Much as 65 Cents Per Gallon 

While CARB regulators largely avoided talking to the media and providing clear cost estimates prior to the vote, it is estimated the new amendments will result in as much as a 65 cents per gallon cost increase beginning next year. All told, that means typical California drivers can expect anywhere from several hundred dollars to over $1,000 in new yearly transportation costs, potentially wreaking havoc on lower income households.   

CARB has approved a significant reduction in carbon intensity for fuel produced in California, forcing refiners to figure out how to achieve said redux. Don’t be surprised to see older refiners throw in the towel, exacerbating California’s #gasprices and supply.

— Patrick De Haan (@GasBuddyGuy) November 9, 2024

LCFS gas price increases will also extend to neighboring states like Nevada and Arizona, the former of which relies on California for 90 percent of its gasoline imports.  
Arizona and Nevada governors previously expressed concern to Newsom about a new refinery storage law passed during California’s special session last month over fears it could further hike gas costs in both states. 

Newsom Regulator Lashes Out at Media For Asking Questions About Gas Prices 

During the meeting Hector De la Torre, a CARB board member, lashed out at the media for asking why the board refused to offer an updated gas price estimate after previously indicating LCFS amendments will hike gas prices only to later withdraw the estimate. 

To be clear he said “it’s too bad” that “the media and some electeds” followed the oil company deflection.

It was actually Democrats in the Legislature bringing up the issue of LCFS during Governor Newsom’s special session that put this on my radar. https://t.co/QbOaeH6UcN

— Ashley Zavala (@ZavalaA) November 9, 2024

CA State Senate Minority Leader Brian Jones blasted the 11-2 vote approving the amendments, accusing Newsom-appointed CARB regulators of price gouging at the pump, a nod to the California Governor’s baseless attacks against the state’s energy refiners and gas station operators over the last year. 

The Air Resources Board’s 65-cent gas price hike is a direct assault on hardworking Californians. This evening’s vote is nothing short of blatant price gouging by the Newsom Administration.

This unelected group of wealthy bureaucrats, handpicked and directed by Governor Newsom,…

— Brian W. Jones (@SenBrianJones) November 9, 2024

The new LCFS amendments, along with California’s new refinery storage mandates and ongoing frivolous climate suits, all threaten to further exacerbate energy costs in a state where a diverse bloc of voters, spurred by inflation concerns, shifted dramatically to the right this November.  

Leading Democrats in the California legislature are also voicing concern this week about the cost impacts of the LCFS amendments, KCRA reports:  

While Californians already pay an extra 10 cents for the current standard, the updates that go into effect in 2025 are expected to raise gas prices even more in the state with the second-highest gas prices in the nation.

“I have concerns about reports that gas prices may be adversely affected by the recent vote,” said Assembly Speaker Robert Rivas in a statement on Monday. “In my district alone, tens of thousands of commuters hit the road every day, and they’re already paying record prices at the pump. I expect the Air Resources Board to be responsive to the public and the Legislature, which includes reviewing gas blends that could bring down prices. My Assembly colleagues and I are committed to lowering the cost of living in our state.”

“Climate change is an existential threat to all of us, and in the coming years, we must continue to buckle down to meet our goals,” said State Senate Pro Tem Mike McGuire. “That said, any new regulations must be open and transparent which is why we’re analyzing their actions and will do so in earnest come January when the Legislature convenes.”

The concern expressed by these lawmakers is a tremendous reversal given Assembly leadership previously rebuffed previous efforts to prevent the LCFS amendments from being enacted, according to State Assemblyman Joe Patterson: 

Would have been cool if they had these concerns at any prior point this year. I introduced legislation to freeze it & Democrats would not even give me hearing. Now decision is made by their appointees on @AirResources, they express concern. Too little, too late. Hard to walk back https://t.co/sM6mO7vyhB

— Joe Patterson (@Patterdude) November 12, 2024

It is unclear whether the California legislature will take up formal efforts to reverse or mitigate the impacts of the LCFS amendments when lawmakers reconvene. However, these statements make it evident that even many of Newsom’s allies in Sacramento are coming to the realization that the LCFS amendments will prove “economically unsustainable.” 

BOTTOM LINE: California’s new LCFS amendments will drive up gas prices by as much as 65 cents per gallon, burdening drivers in California and neighboring states like Nevada and Arizona that rely heavily on California’s fuel. This price hike, combined with new refinery mandates and frivolous climate lawsuits, could add hundreds to thousands in annual transportation costs for consumers, and disproportionately crush low-income households. 

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