Closing the AB-32 Communications Gap – Fuel Prices Going Up

I have written before about the fuel price increases that an expansion of AB-32 is going to bring HERE. Catherine Reheis-Boyd, President of the Western States Petroleum Association, thinks that it time you became more informed on these prices increases, which will range from 16 to 76 cents a gallon come 1 Jan 2015.

 

According to economic analysis by the California Air Resources Board (CARB), this expansion of cap and trade will increase gasoline prices by as little as 4 percent and as much as 19 percent. With gasoline prices currently averaging around $4 a gallon, that is a price impact of 16 cents to 76 cents.

The Western States Petroleum Association has long supported California’s clean air goals and believes a well-designed market based system is the most effective way to reduce overall greenhouse gas emissions. Our members’ refineries have been regulated under the state’s cap and trade program for stationary sources since 2012 and have been paying hundreds of millions dollars into that program each year.

The expansion to transportation fuels, however, is a significant departure from the current cap-and-trade program, both in terms of costs and impacts to businesses, consumes and the economy at large. This expansion will be the first time anywhere in the world that gasoline and diesel sales have been regulated under a cap and trade system.
Because California is entering uncharted territory, WSPA has been expressing concern for some time that California has done nothing to educate consumers and businesses that will be impacted by the fuel prices increases CARB says will result from this program.

 

You can read the rest of the article HERE.  Let’s do a little mind exercise. Let’s say your average vehicle fill up is 20 gallons at $4.00 a gallon. That is $80 bucks worth of fuel.  Now at $4.16 a gallon, that is just a $3.20 increase. But, what about $4.76 a gallon at $95.20 a fill up. Assume you fill up once a week, and take the worst case, have you budgeted an extra $15.00 bucks a week for fuel, $60.00 more a month?  What else could you buy with that $60.00 dollars? By the way one worst case estimate is $1.00 a gallon increase, a $100.00 week fuel bill.

Will families spending an extra $60.00 a month on gas be will to use some of that fuel for a day trip, or week end, in Nevada County? Even at $4.00 a gallon there will be some reluctance to come to the County. It will interesting to see what the County Fair attendance is this year, with cooler weather. Passed attendance declines have been blamed on hot weather. Stay tuned, we will know the results next week.

 

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About Russ Steele

Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.
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5 Responses to Closing the AB-32 Communications Gap – Fuel Prices Going Up

  1. Stu says:

    Considering gas was less than $2 a gallon when current occupant took office, the past 6 years fuel prices have already taken a massive chunk of household budgets – I’ve been driving the same truck for a decade and seen the fill up cost go from $30 to $100,

    my income has not done likewise…

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  2. Sean says:

    What surprises me is the range of the cost increase, 4-19%. Thai is a factor of almost 5. I suppose this might reflect the volatility of carbon prices but California has a floor of $12 per ton of co2 and I don’t see carbon pricing this high anywhere in the world. Places like Europe where it has been imposed, have seen such a decline in industrialization that excess permits keep a tight lid on carbon prices. California is introducing its cap and trade regime into an economy that has already lost most of its heavy industries so that relief valve will not come into play. Also with nearly a third of its population in poverty, the extra money for fuel, which will in turn lead to cost increases throughout the economy, will likely push many more over the edge. Let’s hope that the effects of the law on fuel prices will be at the lower end of the range as the regressive nature of AB 32 will impact the poor most.

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  3. kakatoa says:

    Propane is going to be part of the cap and trade program starting next year as well.

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  4. Mark Miller says:

    Russ,

    Propane and natural gas are going to fall under the cap and trade program starting next year as well. I haven’t been able to find out how much the cost of these fuels are likely to go up.

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