California’s government is terrifyingly stupid.
Take, for example, Gov. Gavin Newsom’s recent bullying of the legislature into a special session to throw together a new law attacking the energy industry.
The new law puts politically appointed state regulators in charge of layering on new rules and mandates to control fuel inventories and the timing of refinery maintenance.
What could possibly go wrong?
After he signed the bill, Newsom released an animated cartoon about the oil inventory law, showing himself as a hero and former President Donald Trump as a villain. It was paid for by “Newsom for California Governor 2022.” It wouldn’t be legal to use public funds to produce that cartoon. Only campaign committees can pay for political ads.
Newsom didn’t pay for the ad out of his federal political action committee, which he named “Campaign for Democracy.” He used funds from his last campaign for governor, which is over, but the committee is still active. As of June 30, Newsom’s 2022 committee had more than $3 million on hand.
No doubt there’s some intricate legal reason that it’s not unlawful for a governor to use a state campaign committee to buy an ad criticizing a federal candidate within a month of a presidential election. Perhaps that’s an investigation for another day.
Today we should be concerned that our idiotic state government has once again delegated decisions that will have a massive effect on the economy of California — and also Nevada and Arizona — to unelected bureaucrats who are appointed by politicians but not accountable to them. The California Energy Commission is now responsible for implementing two laws, passed in two consecutive years, to limit the “excess profits” of oil companies and to control their inventory levels.
Newsom says this will reduce gasoline prices to the consumer. The oil industry says it will have the opposite effect. We’ll all find out together, but by then it will be too late. The new regulatory framework will be locked into place, and everyone will say it’s someone else’s responsibility and there’s nothing they can do about it.
Welcome to the Administrative State of California.
Perhaps you’ve heard about the huge price increase in gasoline that is about to be unleashed by the California Air Resources Board. CARB is set to vote right after the election on a new update to the Low Carbon Fuel Standard. Previously the agency estimated that this would add 47 cents per gallon to the price at the pump next year, but more recently they’ve withdrawn that estimate and declined to issue a new one.
What is the Low Carbon Fuel Standard? It’s complicated. In essence, it’s a credit-trading scheme designed to promote biofuels and the like. The idea is to force companies that make useful energy to buy credits to compensate for their sin of high carbon. Companies that make low-carbon energy have credits to sell. Thanks to California’s idiotic law, there’s more money to be made selling credits than energy.
How CARB rates the various types of energy and manipulates the calculations affects the price that oil refiners pay for credits, which affects the price of gasoline, diesel and jet fuel.
The fact that the regulators are voting on this after the election and won’t answer questions beforehand tells you everything you need to know.
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Newsom bragged at his bill-signing event that California is leading the world with these market-making activities. It’s nothing to brag about.
CARB also runs the cap-and-trade program, another credit-trading scheme that’s raising the cost of energy in California. This one requires refineries, utilities and manufacturers to buy permits to emit greenhouse gases, effectively a tax on their operations. The cost is passed through to the consumer in higher electricity bills, fuel prices and the cost of living in general. A quarter of the revenue goes toward building the bullet train.
An initiative that had qualified for the November ballot, the Taxpayer Protection and Government Accountability Act, would have required administrative taxes like these to be approved by an elected body, in this case, the legislature. But Newsom sued to take it off the ballot, and the state Supreme Court went along with him.
That’s how California’s energy policy became a campaign ad. Paid for by you.
Write Susan@SusanShelley.com and follow her on Twitter @Susan_Shelley