Jumping fuel prices are a gas, gas, gas

Politico

2 days ago

With help from Camille von Kaenel
STEPPING ON THE GAS: Gov. Gavin Newsom and President Donald Trump are both basking in relatively low gas prices ahead of one of the country's biggest driving weekends.
But California regulators and lawmakers are also desperately scrambling to keep gas prices steady in an acknowledgement that Republican political attacks on the issue are sticking.
Tuesday could have been a doozy, after both the state's annual gas tax hike and closely watched amendments to the low-carbon fuel standard aimed at hastening the transition away from fossil fuels took effect — and didn't cause an immediate spike in gas prices.
'Republicans spent the last 6 months fearmongering that gasoline prices would 'increase by 65 cents on July 1,'' Newsom's office said in a press release Wednesday, pointing to data from AAA. 'Did this happen? The answer: No.'
But lawmakers are getting impatient. They advanced a bill Wednesday that would have the state immediately allow suppliers to blend more ethanol into gasoline — 15 percent, up from a limit of 10 percent now.
The move would make California the last state to switch to E15, a blend that a study last year by UC Berkeley and US Naval Academy economists found could lower gasoline prices by 20 cents per gallon.
It's something the California Air Resources Board has been studying since 2018 but hasn't yet greenlit. Ethanol, while less carbon-intensive than gasoline, comes with separate concerns related to growing corn for production. Assemblymember David Alvarez said needs to pick up the slack.
'The reason this bill is needed is due to regulatory delays that we've seen from the Air Resources Board,' he said at today's hearing.
CARB didn't immediately respond to a request for comment. But the concept dovetails with Newsom's budget language, which gives $2.3 million to help CARB finish the job.
Another idea, floated by Senate Democrats last week in a sweeping bill that also took aim at the low-carbon fuel standard, is to move away from another of the state's bespoke gasoline formulations: CARBOB, a '90s-era summer blend aimed at reducing smog, in favor of a West-wide blend that refineries in neighboring states would also produce.
That West-wide fuel standard concept has garnered a surprising amount of interest among environmental and clean transportation groups.
'I do think it's something worth examining,' said Katelyn Roedner, California director for the Environmental Defense Fund. 'Do we still need a special blend?'
And the E15 idea is getting good reviews, too. 'Generally speaking, it makes a lot of sense, provided we do it in a way that doesn't require expanding ethanol production capacity,' said Colin Murphy, co-director of the Low Carbon Fuel Policy Research Initiative at Davis' Institute of Transportation Studies.
But neither is a quick fix.
If California moves away from its low-smog formulation toward more reliance on outside sources, it would need to quickly build up its capacity to import more fuel while making sure not to undercut in-state refineries and potentially create more closures, Murphy said.
It's unclear, so far, what other states think of the idea, which would hinge on their buy-in to pull off. Spokespeople for the governor's office in Arizona, Nevada, Oregon and Washington didn't immediately respond to requests for comment on the bill.
But Arizona and Nevada rely on California for gasoline supplies and are the most likely candidates to have open ears. The governors of both states jumped into the Sacramento fray last year, lobbying against a special session bill that requires refineries to maintain backup fuel supplies for when facilities go down for maintenance.
And CARB cautioned that its E15 rulemaking could still take a while. CARB spokesperson Lindsay Buckley said that process could be finished sometime in 2026, 'assuming we get the staff and are able to start the rulemaking process later this year.' — AN
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CEQA HANGOVER: State lawmakers are still advancing a suite of one-off bills poking holes into environmental reviews days after Newsom signed a sweeping overhaul of the California Environmental Quality Act in the name of speeding up housing development — though at least one said she's had enough.
'At least for me personally, it's going to be very difficult for me to support any CEQA exemption or streamlining bills moving forward, just because I think we need to tip the balance the other way now, just because CEQA has been really dismantled,' Sen. Caroline Menjivar said at a Wednesday hearing on several more of them.
Menjivar voted for the CEQA overhaul on Monday but declined to support bills waiving more environmental reviews for wildfire prevention projects near evacuation routes and for exploratory geothermal energy projects in the Senate Environmental Quality Committee on Wednesday.
Both bills passed with little to no other opposition. — CvK
SUN BURN: The board of a powerful irrigation district in the desert of Southern California has had enough with solar panels replacing crops.
The Imperial Irrigation District passed a resolution on Tuesday opposing new utility-scale renewable energy development on farmland in the Imperial Valley, where farmers grow alfalfa, lettuce and other crops but face increasing water restrictions that have forced some to leave their fields fallow.
Renewable energy developers see potential in the desert region's open spaces and have already covered nearly three percent of the region's total farmland with solar panels.
'It's time to draw a line,' said IID vice chair JB Hamby. 'Farmland in the Imperial Valley feeds this country and anchors our economy. … We support renewable energy — just not at the expense of our future.'
Hamby is currently locked in multi-state negotiations over dwindling Colorado River supplies, which irrigate the Imperial Valley's farmland.
The irrigation district will pass along its recommendation to local, state and federal land use decision makers, including the Imperial County Board of Supervisors. — CvK
GRID GAMES, CONT: The Public Advocates Office, an independent organization within California's utility regulator that lobbies on behalf of ratepayers, has taken its stand on a controversial grid regionalization proposal winding its way through the state Legislature: yes, if amended.
The position, detailed in a letter on Friday, matters because the proposal has divided environmental and ratepayer groups, with some saying the proposal would reduce costs and improve grid reliability and others saying it could undercut California's renewable energy goals.
The director of the Public Advocate's Office, Linda Serizawa, is largely taking the side of the business and utility groups who want to see state lawmakers reverse recent amendments to the bill. Those amendments gave California more control of the regionalization, but Serizawa wrote that may risk alienating other states interested in linking up with California. — CvK
— Tesla posted another drop in vehicle deliveries for the second quarter of 2025.
— Between rising seas and raging wildfires, California may be running out of safe places to build the housing it needs.
— Recycling firm Redwood Materials is hooking up used electric vehicle batteries and solar panels to power a data center in Reno, Nevada.