EDITORIAL: Greed isn’t raising gas prices

The ongoing attacks on corporate greed are a blatant attempt to distract voters from the left’s policy failures. Just look at California.

Last week, California Gov. Gavin Newsom called a special legislative session to address high gas prices in his state. He’s right that prices are high. Its average cost per gallon of gasoline is around $1.30 higher than the national average.

Mr. Newsom blames oil and gas corporations for this.

“Don’t buy the scare tactics from Big Oil. Our clean air policies aren’t the problem — greed is,” Mr. Newsom said in a recent video on X.

One problem should jump out immediately. Oil companies sell gasoline throughout the U.S. Presumably, those companies are just as greedy in Oklahoma and Tennessee as they are in California. Yet, in more than 10 states, including those two, the average price of gas is under $3 a gallon. Nevada drivers haven’t seen prices that low since the Trump administration.

A community note on Mr. Newsom’s post provided a better explanation.

“State leaders and experts … listed ‘the relative lack of competition’ among refiners, supply constraints of California’s ‘unique clean-burning gasoline,’ and higher state taxes as three of the main points driving up prices. They have found no hard evidence of price gouging,” the note stated, citing the Los Angeles Times.

This gets to the key problem. California has spent years attacking fossil fuels. In 2022, Mr. Newsom released a plan to make California carbon neutral by 2045. The state’s EV mandate even bans the selling of gasoline-powered cars by 2035.

Oil and gas companies have gotten the message. Last month, Chevron announced that it’s moving its headquarters to Texas. California’s hostility to fossil fuels has made companies reluctant to invest in things like refineries. The state only has 14 open refineries according to the California Energy Commission. Several opened more than 100 years ago. Eleven provide around 90 percent of the state’s gasoline and diesel. In the past 40 years, only one current refinery has opened. It’s tiny, producing just 0.1 percent of the state’s refining capacity. Over that same time frame, more than 20 refineries have shut down.

If there were more refineries, there would be more supply. If there were more supply, gas prices would be lower. This is Economics 101.

Mr. Newsom’s economic illiteracy is potentially a major problem for Nevada too. The vast majority of the state’s gasoline comes from California. If Mr. Newsom’s ill-conceived regulations further limit refineries, Nevada prices could soar even higher.

If Mr. Newsom wants to know who to blame for California’s high gas prices, he should look in the mirror.