I'll put this in the Enviro forum. I am looking here at GasBuddy Gasoline Price data versus time, and inferring impact of California carbon taxes, which are not shown at the pump. The graph below looks at USA Average Price, California Avg, and Roanoke, Va (Southern Virginia) versus time. I actually live in NoVA (Northern Virginia) which is close match to USA Average price. New Jersey (my former home) is now also close to USA average as well. So we can see Ca price now is about $4.70 vs. $3.19 in Roanoke vs. $3.38 USA average. Sheesh! OK but lets now subtract out State+Fed taxes: Ca is now paying net $4.70-0.854 = $3.85 before *pump* taxes Let's compare to New Jersey because NJ and Ca are both 100% RFG (reformulated gasoline) which costs a little more, so by using NJ we cancel out that difference. NJ is now paying net $3.38-0.6910 = $2.68 before *pump* taxes The difference $3.85 - $2.68 = $1.17/gal I infer is mostly the Ca carbon tax as of 2021. If we go back to 2017, we see California was only approx. 50 cents more than the USA Average, now we are closer to $1.50/gal more in Ca. inclusive of the (hidden) state carbon tax plus say 30 cents higher than average state pump taxes. There could be other factors, NJ price is on low side due to favorable supply factors. But unless there are some new Ca price factors I am missing (pls advise) I assert the hidden carbon tax is now making a humongous price impact in Ca. A few years ago it was harder to see the impact of the carbon taxes.
This report pegs the carbon fees at 37 cents, https://ktla.com/news/taxes-fees-make-up-1-18-per-gallon-of-gas-in-california/ What you may be missing is that California RFG isn't the same as EPA RFG. California Reformulated Gasoline | California Air Resources Board While NJ enjoys a supply advantage, California is a captive market to gas producers. There is only a few refineries that make gasoline to CARB's specs, and current laws don't allow the use of 'lesser' formulas when those refineries can't supply demand. Then there is also inflation. 2017 to 2021 is at 12.8%, or 13 to 14 cents more per dollar. CPI Inflation Calculator Inflation Calculator | Find US Dollar's Value from 1913-2021
Even the Feds call put California RFG as different than federal RFG: "A note about federal RFG requirements in California: All counties implement a version of the California Reformulated Gasoline Program, not just those listed here as Clean Air Act-required areas. Standards differ from federal RFG requirements, and compliance periods vary by air basin. Please refer to the California Air Resources Board website for additional details: https://ww2.arb.ca.gov/resources/documents/federal-reformulated-gasoline-rfg." Separately, when comparing California to other prices, California's fellow West Coast states are a more meaningful baseline than the U.S. national average, unless you want to blame California's taxes for the entire Western region having above national average prices.
As far as Ca RFG specs, historically say 10 years ago, there was the significant difference of ultra low sulfur in Ca and not elsewhere. But ultra low sulfur was later mandated for all RFG (and CBOB?) and should be phased in .mostly everywhere by now. So I would not be aware of a costly RFG difference today, I am feeling qualitatively, if you go back 5-10 years, the main difference was higher state pump taxes in Ca. Now we seem to have a new reality. Of course, when we say gaso prices are highest in 10 years, part of that is Ca, Pa, and many states have substantially upped the pump taxes. NJ, Va have both gone from low gaso taxes to higher. The big part is crude oil price of course.
Good article! the carbon tax data they say is March-21. To my knowledge, the Ca carbon taxes are not itemized per gallon as shown. So somebody (Stillwater Assoc) has probably made an estimate. I wonder if accurate? If accurate, there probably needs to be another new factor to explain why Ca gaso price has skyrocketed more than other states.
Got to run out the door, so this is the quick post. Look into what is happening to refineries. Some are being shutdown, including one in California, where the loss will have a larger impact than one in the rest of the country. Then Ca refineries are getting hit with tighter pollution regulations for their operation. There is also the regular halts for maintenance or repairs that always spike prices in Ca. California gas prices spike after refinery problems @austingreen is more knowledgeable on the subject than I.
The cost of low carbon gas and greenhouse gas program are ball park but definitely in the right range for today. These vary depending on the markets for the credits. But true cost of those and other regulations are probably under counted. California refineries are badly maintained compared to gulf coast refineries, as buying capital equipment is risky if California really does seriously reduce gasoline consumption from here. When refining capacity goes down other California refineries take advantage and make higher profits, so it is profitable to do poor maintenance. This would be less profitable if it was easy to import gasoline from the gulf coast, but other California regulations make that unprofitable for refineries. It almost appears that regulators in california want refiners to do a bad job and spike prices.
No, I didn't see any of the Doodles for several days. So, looking back through Google's Doodle Archive ... Dec 1: Great Union Day? No Dec 1: Summer (Australia)? No Nov 30: Janaína Dutra's 61st Birthday? No Nov 30: St. Andrew's Day? No Nov 30: Celebrating Lofti Zadeh? Yes, that's it. Good to see the history. But no, my handle here has nothing to do with that. When signing up here, I was having a more serious than usual case of creative block. For some bizarre reason, the nickname of someone I knew long before (and hadn't seen in over a dozen years) just popped into my head, and nothing could displace it. So I went with it. After appending a digit, because someone else had already taken the first try.
There have been active investor efforts to manipulate oil producer decisions since 2015ish The active efforts to reduce active wells, reduce exploration and reduce supply stability are starting to pay dividends, I have no doubt late 2020 prices would have crested $4 if we hadn’t had a pandemic. But here we are, my guess is a repeat of 2006+ with the following crash if they continue
Do you think that explains the difference for Ca? I think Cramer (Mad Money) observed that Trump was bad for oil companies because he was so bullish on pumping oil, the supply got ahead of the consumption...prices dropped...profitability was issue. I do not blame Biden for current prices. Industry was hurting after the price drops pre-COVID and then COVID was killer and crude price went negative, of all things. So yes they are trying normalize. I think OPEC likes $80 crude as the ideal, but of course public wants lower price.
Would a chart of US petroleum production history help here? There are many sources and the ones I've seen have no obvious inconsistencies. So source selection would not matter. They all show "active investor efforts to manipulate oil producer decisions since 2015ish" neatly in context.
It looks like Ca carbon tax does not account for the whole price difference that Ca now seems to show. What might be interesting is avg USA pump price vs. crude price, which might show we are higher taxes now, so that is part of the "highest pump price in 10-yrs explanation".
According to New York Times, the recent Ca storms is part of the answer, so I will have to go back a few months on Gas Buddy to see if that is true. "Here in California, hefty taxes have long made gas prices the highest in the nation. But fuel got even more expensive after an atmospheric storm pummeled Northern California last month. The heavy rains inundated oil refineries with water, which affected gas production in the region, The Los Angeles Times reported. The subsequent cost increases then trickled south to the rest of the state." Why Gas Prices Are So High in California - The New York Times
