California airline regulators consider raising gas prices

As Gov. Gavin Newsom wages a high-profile campaign to prevent sudden increases in gasoline prices, California air regulators are quietly pushing a policy change of their own that could raise prices at the pump by nearly half a dollar per gallon or more. .

Newsom recently called a special legislative session to consider controversial new controls on state-owned oil refineries, and the California Air Resources Board — the state agency charged with regulating planet-warming emissions — will soon consider stricter limits. for the carbon intensity of fuels.

In September of last year, CARB estimated that the change could increase gasoline prices by 47 cents per gallon, or $6.4 billion per year.

Other analysts put the price even higher – 65 cents per gallon, or $8.8 million per year.

Now, as CARB approaches a November vote on its low-carbon fuel standard, or LCFS, the agency is backpedaling on its price increase forecast. Recently, an airline board official told lawmakers that the 47 cents per gallon estimate was just a “snapshot” based on a forecast model that “can never capture real-world conditions.” However, the agency declined to offer a revised estimate to the public.

Lawmakers from both parties are now expressing their frustration with what they consider to be CARB’s troubling lack of transparency.

Some lawmakers question whether the air board has become too powerful and requires more oversight from elected officials.

“To me, this special session is all about making sure gas prices go down,” said Assemblymember Corey Jackson (D-Perris). “And certainly, if CARB is creating regulations that will increase gas prices, we will have to look at that and see if we have to rein in their authority.”

What concerns him most, Jackson said, is the board’s resistance to acknowledging the consumer costs of its future policies. “The higher quality of our air may be worth higher prices,” he said, but he doesn’t understand how keeping predictions secret encourages public debate about government policy.

Assemblymember Joe Patterson (R-Rocklin) shares Jackson’s concern. “Maybe the cost will be worth it because we will have cleaner air,” he said. “But how can you make informed decisions if you don’t want to know about every possible outcome?”

He also questioned the timing of the special session. “It appears the governor is more concerned about imposing this on oil companies than he is about the actual costs of gasoline.”

Rep. Blanca Rubio (D-Baldwin Park) was traveling and unavailable for an interview, but sent the following email: “While the Legislature is currently working to address oil price increases through the public process, It is unfortunate that CARB is unwilling to provide an estimate of the monetary impacts that changes to the LCFS will have. This process is intended to be public and collaborative, but the Legislature will have difficulty making significant positive impacts on fuel prices if CARB is unwilling to address the role its regulations play in determining prices.”

The airline board’s vote in November focuses on changes to the LCFS, a carbon trading program that came into force in 2011. The program penalizes refineries that produce high-carbon fuels such as diesel and gasoline, and benefits manufacturers of low-carbon fuels such as renewable diesel.

The changes would impose much stricter limits on the carbon intensity of fuels, leading to much higher costs for refiners to purchase credits to comply with the law. The extra costs are passed on to consumers at the pump. But the airline board won’t talk about how much it might cost.

CARB chief Steven Cliff says the agency will not predict the effects of climate policy on gasoline prices.

(Associated Press)

CARB chief Steven Cliff told The Times that no new figures will be released because “what we are not equipped to do is analyze what the effect would be on retail gasoline prices.” Instead, we “look at all economic impacts,” including economic growth, job creation and public health.

On that basis, Cliff said, the changes are positive for Californians.

Asked whether estimating fuel costs and releasing the numbers could help inform public policy, Cliff said: “We present the analysis that is required by law.”

Critics of CARB believe that fuel price transparency is necessary so that policymakers can evaluate climate policy tradeoffs and ultimately respond to their constituents.

However, it’s not just lawmakers who are concerned about CARB’s approach.

Danny Cullenward is a carbon markets expert and vice chair of the California Independent Emissions Market Advisory Committee. He is the analyst who used data also available to the air board to arrive at his estimate of per-gallon costs of up to 65 cents in the short term and possibly much higher in the long term for policies under the air board’s consideration.

Cullenward said CARB needs to release more information and that the airline board will make an “opaque regulatory decision in November that will occur three days after the election,” when media attention will be elsewhere.

On Monday, Cullenward released a paper written for the University of Pennsylvania’s Kleinman Center for Energy Policy on the issue of fuel standards. “Instead of openly discussing these implications, the regulator distanced itself from its own initial assessment of costs,” he wrote.

Cullenward is considered an advocate of carbon reduction, but is sometimes criticized when he questions the effectiveness of some carbon market programs. The airline board’s fuel standards policies, he believes, favor low-carbon biofuels over the much cleaner electrification of transportation.

He’s not surprised that the Legislature is suddenly paying more attention to CARB. Although the fuels program “is regularly reviewed and updated every few years, it has not been guided by specific legislation since its implementation – despite its evolution into a multi-million dollar market with substantial environmental and economic consequences,” he wrote in his article.

This could change.

“I think we will start to see more discussion about our willingness to give our authority to CARB executives and even rein in the powers we have ceded in the past,” said Jackson, the assembly member.