Shipments on the circuitous route are increasing. California imported more gasoline in November than ever before, with more than 40% coming from the Bahamas.
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Now for the really bad news: Newsom’s California will continue to import more gasoline from the Bahamas, and the price of a gallon will continue to rise. Here’s an explainer:
The lengthy journey adds another layer of cost to California’s already expensive gasoline market. Yet the phenomenon isn’t likely to disappear soon, thanks to a combination of disappearing oil refineries, a lack of interstate pipelines and a loophole in a 106-year-old maritime law.
California has among the strictest environmental regulations in the US, making it costly for energy companies to operate in, though a wave of upcoming refinery closures is prompting officials and regulators to soften their stance. On average, the closures could raise the cost of gasoline for consumers by between 5 and 15 cents a gallon, said Patrick De Haan, GasBuddy’s head of petroleum analysis.
I suspect the price hike will be even steeper than that, but for now, I’ll go along with Mr. De Haan—noting that a 15-cent increase is still a serious blow. This will make it even harder to do business in California, which is already a challenging environment. After all, energy costs influence the price of everything, and in recent years, California has made some pretty insane choices when it comes to energy policy.
This is a challenge that the GOP could potentially capitalize on, even in California, especially in certain swing districts where seats might turn red if this nonsense continues. It’s worth mentioning that while the gas from the Bahamas arrives indirectly in some cases, there’s an old law that adds some complexity to the situation:
Under the Jones Act, any goods shipped between US ports must travel on US-built, owned and operated vessels. Those tankers are in short supply and expensive to charter. There are about 55 Jones Act-compliant oil tankers worldwide, compared with more than 7,000 oil tankers globally.
“Even if there are such vessels, they would charge more than a foreign-flagged vessel would,” said Martin Davies, director of Tulane University’s Maritime Law Center.
California Republicans, it’s time to take action: Highlight the current costs of gasoline and diesel, and use them to hold California Democrats accountable. This issue could be the key that shifts public opinion. California is rich in petroleum resources, yet Democratic policies have prevented it from tapping into them. Refineries are shutting down due to these same policies, and the once-prosperous state, indeed, a wealthy state, has seen its productivity fall off a cliff due to Democrat policies. Instead of benefiting from the plentiful natural resources, they’re now forced to import gasoline at exorbitant prices, all because of the decisions made by Democrats.
California won’t change instantly, but this can be the kickoff to a shift. With the upcoming fall elections on the horizon, it’s likely that gas prices will spike even more. Now is the time, California Republicans. Seize this opportunity.
