By Rock Zierman, CEO of the California Independent Petroleum Association
CIPA is a non-profit, non-partisan trade association whose members represent approximately 70% of California’s total oil production.
In California, energy prices continue to rise, keeping the state’s energy costs the highest in the nation, according to a recent report by the California Center for Jobs and the Economy. Furthermore, California’s energy policies are clashing with the state’s goals for an equitable recovery.
On July 1, California’s highest-in-the-nation gas tax automatically increased again. Even before this latest increase, the price of gasoline was $1.26 more per gallon, on average, than in the rest of the nation.
Residential electricity prices are 65% higher than the U.S. average, and commercial and industrial rates even higher. A recent UC Berkeley study found that in some parts of the state, it is more expensive per mile to drive an electric car than a fuel-efficient gasoline one.
On top of unaffordable housing costs, expensive electricity creates an added strain on monthly budgets that keep individuals and families trapped in poverty. High cost of living hinders low-income and middle-income households from moving ahead economically. Since the Great Depression, affordable and reliable energy have always been a key foundation of economic progress.
Today, 18.1% of California residents live in poverty, the highest poverty rate in the nation. In February 2021, the California Public Utility Commission reported that energy costs are outpacing the rate of inflation. As power costs become less affordable, the poor only become poorer. Instead of helping those most in need, California’s energy policies are inhibiting them.
Should America follow California’s lead, it should prepare for similar consequences.