California bill to suspend gas tax fails despite rising prices

“Here in California, because we rely so much on foreign oil, we put ourselves in this position,” Strickland said in response to a question from The Center Square. “Because of anti-business policies, we just lost Phillips 66 and Valero’s shutting down. Now my bill is the only thing we really have right now to give immediate relief to hardworking California families.”

The bill was rejected Wednesday by the Senate Environmental Quality Committee.

In addition to suspending the state’s gas tax for one year, SB 1035 would have suspended California’s low carbon fuel standard and exempt transportation fuel suppliers from the state’s cap-and-trade program for one year, according to a legislative analysis.

Other bills to help ease the pain at the pump have been introduced in the California Legislature this year. Among them is a bill similar to Senate Bill 1035 – Assembly Bill 1745, authored by Assemblyman Jeff Gonzalez, R-Indio.

That bill also proposes to suspend the state gas tax for one year. As of Feb. 23, it had been referred to the Assembly Committee on Transportation for a hearing. Gonzalez’s bill was announced alongside several Republican lawmakers this year.

California has regularly seen the nation's highest gas prices for several years. 

Prices recently have exceeded $5 a gallon. In fact, gas could hit $8 to $10 a gallon in the state, according to an oil and gas expert who testified this week in support of SB 1035.

“It’s quite possible – even the [California Energy Commission] has said that,” Michael Mische, CEO and managing Member of Synergy Consulting Group, Inc., told The Center Square on Wednesday.

Tanker prices have gone up to roughly $300,000 a day, well over the most recent price of $130,000 a day, Mische told The Center Square.

“You’re moving the gasoline over on that tanker at one price, and now you’re moving it over at a higher price, and those prices will be reflected in the price at the pump,” Mische added. “So it’s quite considerable that we’re looking at $7, $8 a gallon, and worst-case scenario, that could go over $10.”

The bill’s failure to pass in the Senate Environmental Quality Committee comes as gas prices in California get progressively higher. The average price of gas in California on Thursday hit $5.61 a gallon, well above the national average of $3.88 a gallon, according to AAA’s fuel prices tracker.

Other states with some of the highest gas prices in the country included Washington state, at $5.14 a gallon; Oregon, at $4.70; Nevada, at $4.66; Arizona, at $4.43; Alaska at $4.42 and Idaho, at $3.98. The lowest average price in the country on Thursday was Oklahoma, at $3.24 a gallon.

An official with the California Independent Petroleum Association wrote in an email to The Center Square on Thursday that the organization supported Strickland's bill and testified in favor of it this week. According to the association, California's gas prices are consistently $1.50 more than the national average because of the state's low carbon fuel standard and cap-and-trade. 

"Those programs are causing refineries to close," Rock Zierman, CEO of the California Independent Petroleum Association, wrote to The Center Square via email. "We have the resources and infrastructure here. We should employ California citizens to producer California energy under California rules, not ship our wealth and jobs to other countries that don’t share our values.

The Center Square reached out Thursday to a variety of oil and gas associations, as well as the Sierra Club, but responses did not come before deadline.