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Rising Gas Prices Could Be Bad News For Politicians

Aug 7, 2014

California’s Cap and Trade program could lead to an increase in gas prices next year. That’s causing some to call for a delay. (file photo)
Credit Andrew Nixon / Capital Public Radio

Gas is already expensive in California. And upcoming changes to the state’s Cap and Trade program could increase prices at the pump even more. As Capital Public Radio’s Katie Orr reports, that could be bad news for drivers and politicians.

Katie Orr:  “I’m standing at a busy Arco station in Sacramento. And with regular gas going for $3.69 a gallon, filling up my 15 gallon tank is going to be pricey. And coming changes to California’s Cap and Trade program may make it even more expensive.”

Beginning next January, fuel suppliers in California will have to comply with the Cap and Trade program. The 2006 initiative seeks to reduce greenhouse gas emissions in the state. And it seems generally expected that the coming change will lead to higher gasoline prices.  

Cassandra Appel laughs as she cleans her windshield. She says gas prices are already too high for her. And she doesn’t know how she might deal with any increase after January.

Appel: “I’d have to start riding a bicycle…”

Projected increases range from 10 cents to 69 cents a gallon. That doesn’t really worry John Lovell. He says he’d probably be more thoughtful about his driving.

Lovell: “Like, on the weekend I’ll run all the errands in the family. I’ll do all the shopping. What I’ll do a lot is I’ll split it up during the day. I’d probably do it all as one trip. You know, just little things like that.”

But some politicians are worried about possible spikes in gas prices. Sixteen Assembly Democrats have sent a letter to Governor Jerry Brown’s administration asking for a delay and a bill has been introduced that would postpone the change. Political consultant Mike Madrid says those politicians have good reason to be concerned. He says voters would likely blame incumbents if gas prices go up.

Madrid: “If gas prices were to go up 15 cents, you would start to see some political shake out. If it goes up 25, 30, 40 cents? You would see an earthquake.”

And he says California’s been though a similar political earthquake before during the state’s 2000 energy crisis.

Madrid: “Good example of that would be when Gray Davis is Governor and the lights go out in California. Whether or not he was responsible for it or not is of absolutely no consequence. The voters are going to want someone’s head on a platter, they’re going to get it.”

Several business groups are worried. A recent event by the National Federation of Independent Business featured small business owners such as Travis Hausauer. He runs a chain of hamburger restaurants and says his suppliers would likely pass any cost increases onto him and he’d have to pass them on to his customers.

Hausauer: “What’s gonna happen is we’re going to get to a point in California where we’re gonna have $20 hamburgers. People won’t be able to afford them and I won’t be able to sell them so we’ll have to close our doors.”

The Western States Petroleum Association paid for a study that found prices could rise between 14 to 69 cents a gallon. And the state’s independent Legislative Analyst’s Office says prices will likely go up 13 to 20 cents a gallon by 2020.  

But Democratic Party leaders are not swayed. And in response to the letter from Assembly Democrats, the Air Resources Board points out petroleum-based transportation fuels make up almost 40 percent of California’s greenhouse gas emissions. The board says leaving them out of the program would undermine efforts to create cleaner fuels.

UC Davis’ Amy Jaffe says staying the course is the right call. Jaffe is the University’s Executive Director of Energy and Sustainability and an expert on energy policy. She doubts whether the change will actually cause gas prices to rise.

Jaffe: “The United States is a major exporter of gasoline and diesel fuel. And so we’re not in a situation where there’s a shortage of fuel and so the market should be able to respond.”

Jaffe’s prediction is backed up by other academic opinions that suggest gas prices could go up about ten cents a gallon, well within normal price fluctuations. And the California Air Resources Board is now saying it doesn’t anticipate any discernable rise in prices. That would be good news for drivers, and, perhaps, even better news for politicians.