California Bill Will Create Artificial Gas Shortages

And higher prices at the pump for Arizona and Nevada

Gas prices could go up even more if California passes a new ABX2-1 BillPhoto byDawn McDonaldonUnsplash

A bipartisan alliance between Nevada Governor Joe Lombardo (R) and Arizona Governor Katie Hobbs (D) called on California Governor Gavin Newsom (D) to stop legislation on a bill they say will make gas prices in their respective states increase.

California Assembly Bill ABX2-1 - is legislation that could have profound effects on the price of gas in the western states. This bill, which is currently under discussion in California’s special legislative session, is designed to regulate refinery inventory supplies. Unfortunately, it is setting off alarm bells among California's neighboring states.

Arizona and Nevada say that it would artificially create shortages in downstream markets. This would result in much higher gas prices for customers at the pump outside of California, particularly in their respective states.

In a statement, Governor Lombardo said, “The people of Nevada and Arizona should not have to foot the bill for California’s misguided policies — especially when it comes to higher gas prices,” attempting to call attention to the bipartisan nature of the issue.

“Lowering fuel costs is a bipartisan issue, and I’m grateful to partner with Governor Hobbs as we fight back against policies that will raise prices and cause regional economic disruption."

Both Arizona and Nevada, already have above-average gas prices due to their dependence on the refineries in California. Unfortunately, this legislation could cause further price spikes.

The ABX2-1 could cause a cascading sequence resulting in increased prices for the consumer due to the lack of available gas or limiting its flexibility.

"This conclusion alone is deeply troubling and warrants bipartisan, regional communication on this legislation before proceeding,” the letter from the two governors reads.

The two governors offered the expertise of their respective state energy offices—the Arizona Governor’s Office of Resiliency and the Nevada Governor’s Office of Energy.

Hopefully, they will be able to work collaboratively and find a viable solution that can benefit all three states.

References:

Thumbwind - California’s New Gas Law: A Pump Price Nightmare for Arizona and Nevada? (newsbreak.com)

Nevada Governor Joe Lombardo - 2024-09-10_governor-lombardo-and-hobbs-urge-governor-newsom-to-halt-legislation (nv.gov)

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