According to a report on fuel price data from the California Center for Jobs and the Economy, the fuel price gap between California and the rest of the U.S. continues to grow:

In May, the average California price for regular gasoline was $3.752, or $1.034 above the U.S. average of $2.718. This is the largest cost gap since June 2000.

Diesel in California is also more expensive than the U.S. rate, at 37 cents higher than the national average. Prices are also widely differentiated by region, such as Sacramento, where the average price per gallon in May was $3.522, and Los Angeles, with an average May price of $3.903.

A prepared release from the Anderson Center noted that “the sharp increases in gasoline prices over the past two months have negatively affected consumers’ mood.”

The current economic conditions index is at 102.9 in May of 2015, a decrease of 2.0 points from the revised reading of 104.9 in February of 2015. The index measuring future economic conditions increased slightly with a reading of 102.5 in May, compared to the revised reading of 101.7 in February 2015.

The probe complicated an already politically charged environment surrounding California gasoline. Cap-and-trade rules were applied this year that extended taxation to gas. Meanwhile, criticism has mounted over the cost and availability of the special blend of gas required by law in California.

Exploring collusion

Although the push toward alternative fuels could have contributed to the spike, Senate Democrats have focused the legislative probe on a much different idea: industry price-fixing. “Sen. Ben Hueso, D-San Diego, chaired the hearing and returned several times to one suspicion: that the tiny pool of refiners responsible for producing California’s unique fuel blends may be colluding to keep prices artificially high,” the Los Angeles Times reported. “Do we have monopolies on fuel in California?” he asked. “We want to know if we don’t have a competitive-enough market to keep prices low.”

The line of inquiry could hit an unusual political sweet spot. Though Republicans have long sought to shield the energy industry from environmentalists’ sweeping regulatory objectives, California conservatives and libertarians have also maintained a strong pro-car and pro-consumer stance. The state gas industry would be left with few allies amid any price-fixing scandal that took advantage of California’s limited supply of special-blend gas.

The cleaner-burning fuel, mandated during an environmentalist push in the 1990s, has never been available outside California itself, creating serious supply problems in the event of an interruption or crisis. “We are one of 17 states using reformulated gas,” the San Jose Mercury News explained, “and about 30 percent of gas sold in the U.S. is reformulated. The problem is that there isn’t a single blend required, or otherwise California could use other states’ fuel when it’s running low, and vice versa.”

An environmental agenda

Tom Steyer

But Democrats have a bigger political interest in hitting up energy companies for money than they do keeping gas prices low. Party heavyweight and environmentalist donor Tom Steyer recently threw his support behind the probe. But as the Sacramento Bee reported, it has remained “unclear whether Steyer and his allies will get the answers they want. Political pressure from Sacramento over the years has resulted in few changes, and Democrats will not say whether they plan follow-up hearings or legislation in response to the latest price increases.”

Drawing cap-and-trade revenue from the gas industry has been seen as essential to distributing costs away from consumers alone. Although they’ll still pay at the pump, their driving habits have proven more responsive to policy nudges than their home energy use, where regulations and incentives have been seen as more invasive and unwelcome.

Republican countermeasures

In hopes of seizing the moment to revisit a key issue, Republican lawmakers have chosen to reintroduce their effort to roll back the cap-and-trade extension to gasoline, backing a proposal introduced by Assemblyman Jim Patterson, R-Fresno. Democrats were divided last year over the extension.

“With oil companies and the nonpartisan Legislative Analyst’s Office warning of a spike in gas prices, a group of Democrats last year sent a letter to the California Air Resources Board urging a delay,” the Bee noted. “While a bill doing so never got a hearing, the industry bankrolled advertisements during the election slamming candidates who support cap-and-trade.”

But the new Republican measure would go beyond what moderate Democrats had supported last year, leaving its fate, for now, still very much in question.

Six weeks ago gasoline in California averaged about $2.25 a gallon, the lowest price in years. Then prices zoomed up a buck and more. Today, according to GasBuddy.com, the average price in California is $3.38 a gallon.

That’s the highest in the country, above even the usual highest state, Hawaii, which is $3.15. The lowest is South Carolina, at $2.14.

Finally, relief should be coming. California uses special blends of gas unique only to our state to reduce pollution. So a strike by refinery workers caused shortages, driving up the cost for everybody.

Now the strike is over. Reported the Los Angeles Times:

The United Steelworkers reached a tentative contract with Shell Oil Co. on Thursday after more than a month of contentious talks and strikes, union officials said. …

The previous contract, which covered 30,000 refinery workers nationwide, expired at the end of January. On Feb. 1, the union called for work stoppages, which at last count included 6,500 workers at 15 facilities.

Two California plants owned by Tesoro Corp. in Carson and Martinez were affected. As a safety precaution, the company decided to idle production at the Martinez plant, half of which had already been undergoing maintenance.

Assuming the contract is ratified by workers and prices start dropping, that’s just in time for some fun vacation driving during Easter Break.

HOUSTON — Falling gasoline prices have sent oil company stocks tumbling, but oil experts say the boom in American energy production shows no signs of slowing down, keeping the market flush with crude and gasoline prices low.

Even after a drop of as much as 25 percent in oil prices since early summer, several government and private reports say that it would take a drop of $10 to $20 a barrel more — to as low as $60 a barrel — to slow production even modestly. …

The Energy Department this week reported that only 4 percent of shale production in North Dakota, Texas and other states needed an oil price above $80 a barrel for producers to break even on investments. One reason is that improved efficiencies in hydraulic fracturing and other modern production techniques have increased the output of each new well month after month in recent years.

Did you note the matter-of-fact, hysteria-free way the NYT refers to fracking? Quite pleasant compared with California’s newspapers, where all enviro reporters with one exception never even mention that the Obama administration considers it safe. Or that the environmental movement basically didn’t say squat about hydraulic fracturing — using underground water cannons to blast away rock and access oil and natural gas reserves — for the first 60 years it was used.

Only when fracking became far more efficient (and cleaner) in the past six or seven years has it emerged as something greens love to hate — and even then the greenest president in history won’t buy in.

Fracking: Sit back and enjoy the CA freakout

So as the U.S. oil boom continues, California residents who like good news and who don’t like the quasi-religious extremism of many environmentalists will have to listen to evidence-free wailing from people who benefit enormously from fracking. They’ll shout themselves hoarse about its evils and pursue local bans, as seen in various communities around the state.

This would normally annoy me because I think fracking is being slandered and that it would be great for California. But I’m now doubtful it will ever come to pass in a major way in a place where the green religion is so strong. Anyone who started a petition drive for an anti-fracking California ballot initiative would have millions of dollars quickly pouring in from the usual billionaire lefties. I’m surprised some lefty consultant doesn’t start up such a drive without even having a client first; it wouldn’t take long to find a deep-pockets patron.

So instead, I will choose to enjoy the discomfiture of CA greens as fracking continues to be one of the world’s great economic phenomena, despite their stern and pious disapproval. Outside of California, billionaire lefties don’t stand a chance against public opinion (very, very, very pro-cheap energy) and Big Oil. Schadenfreude is going to be fun.

But I will also enjoy the CA green freakout because the longer that fracking goes on without anything close to a Love Canal-level enviro disaster, the tougher it will be for the public to take seriously the sky-is-falling rhetoric from fracking haters.

The traditional, much dirtier, much less efficient version of hydraulic fracturing that was used from the 1940s until 2006 or so didn’t lead to a Love Canal. If one happened now, it would in goofy ways be akin to a religious miracle.

For example, according to GasBuddy.com, the average price of a gallon of petrol today in St. Louis is $2.98, but in Los Angeles it’s $3.68 — 70 cents higher.

This just in from the WSJ:

For the past decade, the U.S. shale boom has mostly passed by California, forcing oil refiners in the state to import expensive crude.

Now that’s changing as energy companies overcome opposition to forge ahead with rail depots that will get oil from North Dakota’s Bakken Shale.

Thanks in large measure to hydraulic fracturing, the U.S. has reduced oil imports from countries such as Iraq and Russia by 30% over the last decade. Yet in California, imports have shot up by a third to account for more than half the state’s oil supply.

“California refineries arguably have the most expensive crude slate in North America,” says David Hackett, president of energy consulting firm Stillwater Associates.

It’s inspiring how private industry comes up with solutions to problems caused by government.

Of course, the price could be reduced further still if the state tapped the vast oil in the Monterey Formation. Earlier this year the Legislature passed, and Gov. Jerry Brown signed, SB4, which allowed greater oil development there and elsewhere in the state. But the amount that will be developed is disputed; and in any case will take decades to develop. At least it’s a step in the right direction.

Meanwhile, unemployment in North Dakota is 2.8 percent, best in the nation, which basically means people between jobs. By contrast, California’s rate remains at 7.4 percent — 44th worst. At least here we don’t pay nearly as much for heating oil in January.

So, could California gas prices drop?  Oh, wait. There’s this: On Jan. 1, the price will jump 76 cents from the AB 32 tax Gov. Jerry Brown supports.

Typically, a gallon of regular gasoline costs between 30 and 35 cents more in California than it does in other parts of the country. However, throughout the summer and fall, that difference per gallon has reached up to 50 cents. So why exactly has the price of gas up more in California?

To start, California uses a different formula for its fuel. Environmental regulations require that the gas here must burn cleaner than in other states. In fact, California has some of the strictest pollution standards in the nation. The cleaner-burning gas is more expensive to produce, so California sees an increase in prices of about 10 to 15 cents per gallon.

On top of the more expensive fuel come California’s gasoline taxes — the highest in the country. (New York was ahead last year, but California caught back up.) Drivers in the state pay around 72 cents per gallon of local, state and federal gasoline taxes. Other states have less than half of that burden.

Growing gap

Those factors — taxes and environmental regulations — have always affected gas prices, though. So why is the gap growing?

From SFGate:

This summer, several developments helped widen the gap between gas prices in California and the rest of the country.

The state’s excise tax on gasoline increased 3.5 cents per gallon on July 1, as part of an annual adjustment required by state law.

Refineries elsewhere in the country were churning out copious amounts of gasoline, more than drivers needed. And in some regions, refineries were able to take advantage of the surge in U.S. oil production triggered by hydraulic fracturing.

Although oil is priced on the global market, the U.S. surge has happened so quickly that the country lacks the pipelines needed to move all that oil to the coasts. So refiners in some places, such as the Midwest or the Rocky Mountains, have been able to buy “stranded” oil at a discount.

For example, Rocky Mountain refineries paid $96.63 per barrel of oil in August, according to the U.S. Energy Information Administration. During the same month, California refineries paid $108.05. With no oil pipelines connecting California to other states, refineries here often pay more for petroleum than do their counterparts elsewhere. The difference rises and falls over time.

Finally, several California refineries experienced technical problems this year that trimmed their production, said Gordon Schremp, senior analyst with the California Energy Commission. But the state’s current gasoline inventories are normal for this time of year, he said.

The good news is that gas prices will probably continue to slump for the remainder of the year. The bad news is that they’ll slump back down to what is considered inexpensive only in California.

By Katy Grimes

While nearly every politician in America publicly decries the high cost of gasoline and fuel costs, most are also strangely silent about the soaring gas tax revenues that states are currently enjoying.

Californians always seem to pay the highest gas prices in the country. On top of record fuel prices, the state should be reporting how enriched it is by record gas tax collections.

Yet even with this record gas tax collection, Gov. Jerry Brown and state Democrats continue to claim that the state doesn’t have enough money and needs even more tax increases.

Having and eating your cake

Californians paid $8.3 billion to the state government in gas taxes last year. That’s the bad news.

The worse news is that the Tax Foundation just came out with a new report finding that Californians are not only overtaxed, we shoulder one of the highest tax burdens in the country. Should Brown’s Proposition 30 pass, increasing sales and income taxes, we easily slide into the number one spot for the highest taxed state in the nation.

“At a time when Californians could least afford it, our state and local tax burden was among the highest in the nation,” said former state Sen. George Runner, now an elected member of the state Board of Equalization. “This new report provides further proof that by every measure Californians are overtaxed.”

The Board of Equalization administers the motor vehicle fuel tax, diesel tax and 32 other tax and fee programs.

Adding to Californians’ overall tax burden, “Our latest numbers show that high gas prices resulted in a record windfall for government at the expense of California consumers,” Runner said. “It’s bad enough that California’s gas tax is among the highest in the nation. It’s even worse that gas taxes goes up whenever gas prices rise.”

California’s high taxes

California’s 2009 state and local tax burden of 11.8 percent of income is well above the national average of 9.8 percent. California’s top individual income tax rate is 10.3 percent. The corporate tax rate is an 8.84 percent flat rate. The state sales tax is 7.25 percent, with many counties adding onto that rate. And California collected $1,465 per capita in state and local property taxes in fiscal year 2009, according to the Tax Foundation.

The once-Golden State of opportunity and innovation now ranks 48th in the Tax Foundation’s State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property.

Gas tax for gasbags

From July 1, 2011 through June 30, 2012, the Board of Equalization reported that it collected $6.9 billion in motor vehicle fuel taxes, up from $6.7 billion the prior year. Excise tax revenues accounted for $5.2 billion, while sales tax revenues accounted for $1.7 billion, Runner explained.

Over the same time period, the state collected $1.4 billion in diesel fuel taxes, up from $1.2 billion the prior year. Excise tax revenues accounted for $343 million, while sales tax revenues accounted for $1.1 billion.

California’s gasoline tax is 68.8 cents on every gallon of gasoline, and 77.1 cents on every gallon of diesel fuel, according to the American Petroleum Institute.

“What’s particularly concerning about these numbers is that they would have been even higher had the governor been successful in extending the higher sales tax,” said Runner.

Runner said that had Gov. Arnold Schwarzenegger’s 1 percent temporary sales tax increase from 2009 not expired on July 1, 2011, Californians would have paid an additional $96 million in diesel taxes last fiscal year.

Runner also explained that California’s 2010 fuel tax swap law would have required a larger motor vehicle fuel excise tax rate increase, costing Californians more than half a billion dollars extra in the 2012-13 fiscal year.

According to the BOE, these taxes and fees include:

* A federal excise tax of 18.4 cents per gallon;

* A state excise tax of 36.0 cents per gallon, up from 35.7 cents effective July 1;

* A sales tax averaging 3.12 percent when local taxes are included.

Runner said that it is important to note that the sales tax is calculated on the total price of the fuel sale including excise taxes, resulting in double taxation.

The breakdown for diesel is similar:

* The federal excise tax is 24.4 cents per gallon;

* The state excise tax is 10 cents per gallon, down from 13 cents effective July 1;

* The sales tax is 9.42 percent, up from 9.12 percent, plus applicable local taxes.

Race to the top tax bracket

“This is a race to the top, not in education, but in taxing. It shouldn’t take a genius to see how other states are doing it,” Runner said. “California’s economy is now full of man-made obstacles; that’s what caused the absolute devastation of this economic machine.”

By John Seiler

The following picture is from GasBuddy.com, which tracks gas prices nationally. The cheapest gas, as you can see, is in Texas and the Southeast. The most expensive by far is in California during the ongoing crisis because of the refinery fire and whatever nuttiness otherwise goes on in this state. Even thought California has a special blend of gas, during crises the state regulators could allow imports from other states for a brief time. Nothing would be hurt. Consumers would benefit.

But Noooooooooooooooooooooooooooooooooooooooooooo.

California has to be special and take another club to the backs of consumers. The only good thing to come out of this is that voters, having been gouged at the pump and with their wallets emptied, might be in no mood to increase taxes in November.

By John Seiler

The following chart I made from GasBuddy.com, which also lets you find the cheapest local gas prices. The chart shows gas prices in three areas for the past eight years. Note that Los Angeles (blue line) and San Francisco (orange line) usually have the same prices, with S.F. sometimes a little higher, reflecting the high taxes and extra regulations of the Pyrite State.

By contrast, Houston (green line) prices are markedly cheaper all along. True, Texas is an energy state. But so is California. We just restrict development and refining here because we are creating an eco-utopia in which everyone will drive cars powered by perpetual-motion machines to the High-Speed Rail system.

It’s too bad the chart doesn’t go back 13 years, to 1999, when gas gas 99 cents a gallon or less even in California.

Governments at all levels and the eco-elites want us out of our cars and into mass transit. The high prices punish people who want to live in the dreaded “sprawl” of the suburbs. Nice homes and cars are reserved nowadays for the governmental, bureaucratic and “1 percent” elite. Especially in California, the middle class is being destroyed by taxes, regulations and artificially high energy prices.