Gas is already expensive in California, and upcoming changes to the state’s cap and trade program could increase prices at the pump even more. That could be bad news for drivers and politicians.
Beginning in January, fuel suppliers in California will have to comply with the Cap and Trade program. The 2006 initiative seeks to reduce greenhouse gas emissions in the state. And it seems generally expected that the coming change will lead to higher gasoline prices.
Projected increases range from 10 cents to 69 cents a gallon. In San Diego County, where the average price on Friday of a gallon of self-serve regular gasoline was $3.894, that would be a significant jump into the $4 or more territory.
Some politicians are worried about possible spikes in gas prices. Sixteen Assembly Democrats have sent a letter to Gov. Jerry Brown’s administration asking for a delay in the program, and a bill has been introduced that would postpone the change.
Political consultant Mike Madrid said politicians have good reason to be concerned. Voters would likely blame incumbents if gas prices go up, Madrid said.
“If gas prices were to go up 15 cents, you would start to see some political shake out. If it goes up 25, 30, 40 cents? You would see an earthquake," he said.
And California’s been though a similar political earthquake before during the state’s 2000 energy crisis.
“Good example of that would be when Gray Davis is governor and the lights go out in California. Whether or not he was responsible for it or not is of absolutely no consequence," Madrid said. "The voters are going to want someone’s head on a platter, (and) they’re going to get it.”
Several business groups are worried. A recent event by the National Federation of Independent Business featured small business owners such as Travis Hausauer. He runs a chain of hamburger restaurants and says his suppliers would likely pass any cost increases onto him and he’d have to pass them on to his customers.
“What’s gonna happen is we’re going to get to a point in California where we’re gonna have $20 hamburgers," Hausauer said. "People won’t be able to afford them and I won’t be able to sell them so we’ll have to close our doors.”
The Western States Petroleum Association paid for a study that found prices could rise from 14 cents to 69 cents a gallon. And the state’s independent Legislative Analyst’s Office says prices will likely go up 13 cents to 20 cents a gallon by 2020.
In response to a letter from Assembly Democrats, the state Air Resources Board said petroleum-based transportation fuels make up almost 40 percent of California’s greenhouse gas emissions. The board said leaving them out of the program would undermine efforts to create cleaner fuels.
UC Davis’ Amy Jaffe said staying the course is the right call. Jaffe is the University’s Executive Director of Energy and Sustainability and an expert on energy policy. She doubts that the change will actually cause gas prices to rise.
“The United States is a major exporter of gasoline and diesel fuel," she said. "And so we’re not in a situation where there’s a shortage of fuel and so the market should be able to respond.”
Jaffe’s prediction is backed up by other academic opinions that suggest gas prices could go up about 10 cents a gallon, well within normal price fluctuations. And the Air Resources Board is now saying it doesn’t anticipate any discernible rise in prices. That would be good news for drivers, and perhaps even better news for politicians.
