Thursday, October 18, 2012

California Gas Prices: A Cautionary Tale for Texas

"All In Perspective" Column for the week of October 15.  "All in Perspective" is published bi-weekly in the Hill Country News, Georgetown Advocate, and Jarrel Star-Ledger print editions.  
It’s been a tough year for California. Stockton and numerous other Golden State cities have filed for bankruptcy. The state government, already struggling under $618 billion in debt, has created a budget that includes as much as $28 billion in deficit spending, and residents are being asked to approve a slew of tax increases for the coming year. Now, Californians are paying the highest gas prices in the nation.

Although fuel prices in California have been rising faster than the rest of the nation for some time, this month the state’s average price reached a record high of $4.67 per gallon. The immediate cause for the latest price surge was a temporarily disabled refinery in the southern part of the state, however, this is only the tip of the iceberg.

As even the left-leaning New York Times has noted, California’s stringent environmental policies and high gas taxes are underlying causes of this latest crisis. The state’s tough emission standards effectively eliminate use of gas blends from other states, and therefore California must rely heavily on in-state refineries. Additional regulations have reduced the number of refineries by 20% since 1985. To make matters worse, California touts the second-highest gas tax in the nation.
These policies have drastically reduced fuel supplies while demand has continued to climb, a dynamic that ultimately leads to higher prices. Higher fuel costs mostly impact the middle class and poor, and, as in the case of ethanol mandates, actually contribute to higher pollution rates while driving up food costs too.

While Senator Diane Feinstein has been quick blame energy producers for the crisis, it’s no secret that the goal of the Democrat’s radical environmental policy is higher prices. Barack Obama stated in 2008 that he actually wanted to “boost” the price of gasoline to European levels, and since the price per gallon has more than doubled since 2009, I guess this is one of the few campaign promises the President did keep.

Although certainly feeling the effects of the Obama economy, Texas has fared better than the rest of the nation. Not only has the state economy grown during the recession, gas prices have remained lower than the national average. ($3.53 per gallon as of October 12.) Taxes on gas are relatively low, and the state has much more reasonable environmental policies. Common-sense environmental regulation has kept gas prices manageable and has improved air quality. In fact, in the last decade, Texas reduced NOx and ozone levels at more than twice the national average.
Unfortunately, there are those who want to impose California-style energy and tax policies on Texas. Locally, Democrat candidate for the legislature Matt Stillwell has suggested raising state gas taxes. He has complained that state tax revenues are not enough to maintain and construct roads, but does not mention, that only half of the state’s fuel taxes are used for highway construction and maintenance, while the rest is diverted to other uses, some of which have little to do with transportation.

Despite Texas’ environmental successes, Democrats in the state want much more stringent, California-style environmental restrictions. The aforementioned Mr. Stillwell even questioned if Texas should impose further regulations on the proven technology of fracking for domestic oil exploration, even though the United States Geological Survey, the EPA, and the University of Texas have all concluded that there is no evidence that fracking causes groundwater contamination. (Or earthquakes, tornadoes, or hurricanes, for that matter.) Stillwell also rejects local and state conservation efforts, and desires federal intervention in Williamson County on behalf of salamanders.

Clearly Texas has been doing something right; we are consistently ranked one of the top states for business, and the Lone Star State created about 37% of all new American jobs last year. At the same time, that notorious Texas pride has led to sound conservationist policies that strive to preserve the state’s natural beauty and resources. The key factor has been a balanced approach to policy. The last thing Texans need is to become more like California. Seriously, don’t mess with Texas.

No comments: