California gas prices the highest in US, experts say

Written by By Niyati Shah, CNN Gas prices in California remain high and despite efforts from policymakers, it may be more difficult to reign in prices going forward. Gas in the Golden State has…

California gas prices the highest in US, experts say

Written by By Niyati Shah, CNN

Gas prices in California remain high and despite efforts from policymakers, it may be more difficult to reign in prices going forward.

Gas in the Golden State has been the most expensive in the United States since April when prices hit a three-year high of $4.63 a gallon in the Los Angeles area, according to GasBuddy data. Prices have since crept down a bit to $4.11 a gallon, but are still 35 cents higher than the national average. The average in California was also the fifth highest on a list of the top 10 most expensive states in the US.

Tim Evans, energy economist at Citi Futures Perspective, attributes the jump in California to the state’s new vehicle emissions standards and less desirable weather.

“The biggest driver of prices is the higher vehicle sales price in California,” Evans said. “California sales are a lot more expensive than the national average, and the weather changes in the West are definitely taking its toll.”

The Henry H. Waxman Bill, signed into law in 1997, prompted the California Air Resources Board (CARB) to impose tougher fuel standards. In October 2017, the state banned older-model gas guzzlers from California’s roadways — a move that experts said helped raise gas prices during winter months.

“Since the legislation took effect, California, along with most of the rest of the country, has seen considerable declines in gasoline consumption,” Energy Information Administration spokeswoman Sarah Gelman said in an email.

California is also out of synch with the rest of the country on atmospheric gases because of its coal-heavy electricity system, with CO2 emissions more than double that of the rest of the country. Combined with the recent closures of gas fields in Wyoming and Montana due to the Trump administration’s push for a clean coal policy, Evans said it’s “highly unlikely we will see prices come down.”

The state is also using more renewables than ever before — production from renewable sources grew 44% in 2018, and the state’s total renewable power increased to 1,000 megawatts. The problem is, the state is also importing more renewables, but not enough gas.

“California’s burning of fossil fuels is higher than it has been in 20 years, which is driving up gas prices,” Evans said. “However, there is limited gas to burn here, and California is also importing more renewables from out of state.”

The electric rates in California are also low because California is leading the way in electric vehicle adoption.

“The lower prices offset the higher gasoline price,” Evans said. “But they can’t help but trickle down because California is a large user of foreign liquefied natural gas (LNG) and they are not using a lot of LNG here.”

It all comes down to the basics: a warmer, drier weather combined with cleaner alternative fuels makes California a better place to shop, period.

“Californians are big consumers of LNG,” Evans said. “There are a lot of expensive ways to heat your house, and no cleaner way is better than LNG. The fact that you’re running on LNG is a valuable thing, and the fact that it is cleaner than gasoline is a good thing.”

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