Editorials

August 17, 2014

Editorial: Gasoline prices are sure to rise; Senate ought to hear by how much

There is little no doubt that there will be increased pump prices in 2015 when fuels come under the cap. The question is how much.

Most Californians worry about climate change and support efforts to reduce greenhouse gas emissions.

But for some reason, and there isn’t a good one, the California Senate is balking at holding a hearing on legislation that would lead to an airing of the coming increases in the cost of gasoline.

The legislation, Assembly Bill 69 by Assemblyman Henry Perea, D-Fresno, seeks to delay placing gasoline under the cap-and-trade program. The bill stalled in the Senate Rules Committee. Opponents of Perea’s bill have lobbied to keep it bottled up.

The bill, supported by the oil industry, has little chance of winning Senate approval, and it shouldn’t. So long as cap and trade is part of California’s effort to limit carbon emissions, policymakers should not exempt gasoline. Vehicle exhaust is the largest source of greenhouse gas.

There is little to no doubt that there will be increased pump prices in 2015 when fuels come under the cap. The question is how much.

UC Berkeley energy experts Severin Borenstein, Frank Wolak, Jim Bushell and Matt Zaragoza-Watkins collaborated on a paper in which they estimate gasoline prices will rise by about a dime per gallon in January.

“To put that in context,” they wrote, “the average Californian uses about 40 gallons of gasoline and diesel per month (directly in their own cars and indirectly through transportation of products they purchase), so this will raise their cost of living in California by about $4 per month.”

They write that $4 is not nothing. Nor is it enough to break many household budgets.

If your office is a pickup truck, however, or you operate fleets of delivery trucks, a rise of 10 cents per gallon will hurt far more than if you drive a Volt or a Prius from your home to a high-tech campus, or to the parking lot of a high-rise.

Perea said in an interview that his goal is not to destroy environmental law, but to figure out how to expand cap and trade “in a way that doesn’t impact the working class.” Among his suggestions: Grant income tax breaks to ease gasoline cost increases on low-income Californians.

Although we disagree with Perea’s view that the fuels be omitted for a time from the program, he raises important points. His Fresno district includes some of the poorest and most polluted parts of the state, but has received few benefits from green policies.

California Air Resources Board data show the state has granted a mere 1,405 rebates worth a total of only $3 million for zero-emission vehicles, plug-ins and other qualifying vehicles in the San Joaquin Valley.

In the wealthier Bay Area, where ocean breezes blow smog east to the valley, there have been 26,367 rebates worth $57 million. Motorists in the South Coast Air Basin received 31,000 rebates worth $61 million. Clearly, California must do a better job of getting clean vehicles into poorer parts of the state.

Californians have debated the climate change before. In 2010, oil and coal producers pushed an initiative that sought to roll back Assembly Bill 32, California’s landmark 2006 law to reduce greenhouse gases. Voters overwhelmingly rejected it.

Four years later, what exactly would be the harm in rekindling public discussion? Oil industry experts would warn about coming gasoline price hikes, and cap-and-trade supporters would explain the wisdom of adding fuels to the cap.

Perhaps there would be an honest discussion about how the one sure way to reduce use of gasoline is to raise the price. At a minimum, the public would have access to information, and that is never a bad thing.

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