Gas storage law is Newsom’s latest backwards stunt for president
Immediately after Governor Gavin Newsom’s rushed gas storage bill, Newsom released a political campaign ad in a desperate attempt to stay relevant for 2028. Here is what Newsom’s latest political stunt is about, how it will harm California, why he is unqualified to be Governor, and will never be President of the United States.
On Monday, the California State Legislature passed and Newsom signed Assembly Bill 1 (ABX2-1), which empowers the California Energy Commission to mandaterefineries maintain an unspecified amount of gas and diesel inventories. As typical in the Democrat 80% supermajority legislature, it was rushed in a month, passed with minimal debate, and vulnerable members excused from voting. When the ruling party actually wants something to happen, it does.
ABX2-1 doesn’t define the inventory refineries will need to maintain. The energy commission in August, before the bill was introduced, suggested a 15-day supply to reduce price fluctuations. The Legislative Analyst’s Office didn’t have an analysis either. Instead, Newsom solicited Democrat “experts” that could not have legitimate testimony without an amount. Not that analysis and debate matters in the current legislature and given that every state commission appointee is a Democrat apparatchik. Nothing is independent or accountable.
Besides the unlimited mandate, Newsom’s gas storage law physically won’t work. The closest comparison is the U.S. Strategic Petroleum Reserve. The petroleum reserve holds up to 714 million barrels of crude oil, a 90-day supply of imports, in salt caverns in Texas and Louisiana. It is politically popular.
However, refined products such as gas and diesel cannot be stored underground. Most of California’s refineries are located in built up urban areas along the coast in Contra Costa and Los Angeles Counties. Increased storage will be either impossible or parts of the Central Valley and Inland Empire will have to be dedicated to fuel storage.
Refineries are unlikely to make capital investments in the hostile regulatory environment, and the state won’t pay for its storage mandate either. Therefore refineries will likely reduce production to meet required inventory. Lower supply, the same demand, fuel prices increase.
This will impact transportation costs. Consequently, food prices will increase and all economic activity will decrease. In the current economy, Californians will prioritize driving to work at the expense of everything else, hurting the middle class and small businesses.
Additionally gas and diesel are only two types of petroleum products refineries produce. Others include asphalt, so the cost of roads for state and local governments will increase. Construction materials such as plastic pipes will go up or move out-of-state, increasing the cost to build homes and infrastructure.
Reduced supply and increased costs will also affect downstream industries and cost Californians jobs. For example Pelican hard cases, standard for equipment in film, is based in Torrance because of the refineries. Others such as medical products, plastic pallets, and food packaging are among the few manufacturing jobs left in California.
Gavin Newsom should have realized when he abandoned California for his failed shadow campaign that he will never be president. Besides California, his gas storage law harms swing states Nevada and Arizona. However, Newsom isn’t the only problem. State Senators Bill Dodd, Dave Min, Josh Newman, Susan Rubio and Assemblymembers Rebecca Bauer-Kahan, Sabrina Cervantes, Mike Gipson, Tim Grayson, Brian Maienschein, Blanca Rubio, and Akilah Weber, didn’t cast a vote because they are vulnerable or are in districts with oil infrastructure, and to avoid accountability.
Democracy is on the ballot and it begins with voting out them and Gavin Newsom.
Matt Quan has a Master of Public Policy and Public Finance from the University of Southern California.