Clock Ticking on California 'Experiment'

Global warming law could close hundreds of stations, double pump prices, says Lundberg

Greetings from California

CAMARILLO, Calif. --The continued rollout of the Global Warming Solutions Act in California could double retail gasoline prices, force hundreds of fuel stations to close and force refiners out of the state, according to a new report from Lundberg Survey.

The consequences could be farther reaching, the report said. California does tend to serve as a bellwether for legislation and societal changes outside the state.

In 2006, then-Governor Arnold Schwarzenegger signed the Global Warming Solutions Act into law. By 2020, greenhouse gas emissions must be reduced in California to 1990 levels.

"For the better part of a decade, California refiners and marketers have been warning regulators and politicians that the … act will, if left as is on the books, wreak devastating effects," said the report. "The clock is ticking for California's Low Carbon Fuel Standard (LCFS) to slash fuel demand and raise prices in a nightmare for consumers and the industry. If allowed to proceed, the regs could easily double retail gasoline prices, close several hundred stations and send refiners fleeing the state."

The law was a hot topic at the California Oil Marketers Association's (CIOMA) Pacific Oil Conference in Los Angeles earlier this month.

Unbranded fuel supply will be restricted due to reporting requirements, as well as refinery closures, Jay McKeeman, vice president of government relations and communications for CIOMA, told attendees.

"We are heading toward an LCFS cliff in 2015," added Western States Petroleum Association (WSPA) vice president of strategic communications Tupper Hull. "Changes to the law must be made now to fix this and avoid disaster."

The Pacific Legal Foundation (PLF) has filed a lawsuit on behalf of companies, trade groups and individuals challenging this "extreme anti-petroleum" program as illegal taxation.

Click here to sign up to view the full Lundberg Survey report, which details the Global Warming Solutions Act and its consequences.

Camarillo, Calif.-based Lundberg Survey Inc. is an independent market research company specializing in the U.S. petroleum marketing and related industries.

Click here for previous Lundberg Survey reports in CSP Daily News.