CA Republicans proposed two bills aimed to stop a cap-and-trade program for transportation fuels which starts up in January that will increase gasoline prices for motorists across the Golden State.
The Sacramento Bee reported that since 2006 cap-and-trade laws, designed to reduce carbon emissions, have forced companies to purchase permits covering what they put into the air. Up until now producers of transportation fuels have been exempted from buying cap-and-trade allowances. The 2006 law calls for the expanded coverage in January 2015.
Patrick DeHaan a petroleum analyst for price tracker GasBuddy.com, predicts that the new cap-and-trade regulations could produce a 10- to 20-cent-per-gallon increase in fuel prices.
Claiming that the new program will push gas prices upward and burden individual drivers, businesses, schools and farms, Republican lawmakers selected the first day of the 2015-2016 legislative session to announce their bill.
Assemblyman Jim Patterson, R-Fresno contends that “we are all becoming accustomed to the free market working well with respect to the price of oil and natural gas and gasoline, and we are seeing some of the lowest prices for gasoline.” He added that “come January, the state of California is going to ratchet up those costs.”
Assembly Minority Leader Kristin Olsen, R-Modesto offered that “In many if not most areas of California, alternative transportation choices simply don’t exist.”
Gov. Jerry Brown and Democratic leaders in both the Senate and the Assembly have remained firm in letting the cap-and-trade system proceed as planned. However, there are some cracks in the support for keeping the cap-and-trade extensions. Recently 16 Democrats signed a letter criticizing cap-and-trade.
In 2012, Mike Wirth, a Chevron Corp. executive, estimated that the expanded cap-and-trade regulations will cost the transportation gas producing companies billions of dollars. Wirth said, that Chevron will not bear the cost but will pass it on “into the price of the product.”
According to analyst DeHaan “The producers are going to say that prices are going to go soaring, and the environmentalists say, “Oh, its no big deal.'” He added, “I think the truth lies somewhere in the middle. … It’s not the doom and gloom that the oil lobby would have you believe, and it’s not nothing, like the environmentalists would have you believe. It certainly will be felt by motorists.”
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