Golden State Today

Governor Gavin Newsom has called on the California Air Resources Board (CARB) to speed up the process of studying increased ethanol blending in gasoline. This move is aimed at reducing gas prices without harming environmental protections.

The Governor's directive builds on recent legislation designed to prevent price spikes and enhance transparency in the oil industry. By increasing ethanol content in gasoline, specifically E15 which includes 15% ethanol, prices could drop by as much as $0.20 per gallon, potentially saving Californians up to $2.7 billion annually.

Governor Newsom stated, “There’s massive potential for this to be a win-win for Californians: lowering gas prices by up to twenty cents per gallon while keeping our air clean.” The governor emphasized that this initiative complements efforts to hold oil companies accountable and prevent unexpected price hikes at fuel stations.

Studies from institutions such as the University of California, Berkeley, and the United States Naval Academy support these claims but highlight necessary strategic market adjustments and infrastructure updates. Another study from the University of California, Riverside indicated that increasing ethanol levels would not affect NOx emissions and might reduce particulate emissions.

In addition to urging CARB's action, Governor Newsom recently signed legislation requiring oil refiners to maintain a minimum inventory of fuel. This measure aims to avoid supply shortages that can lead to higher consumer prices and profits for refiners. The law also empowers the California Energy Commission to enforce planning requirements during refiner maintenance outages.

Last year’s gasoline price spikes prompted Governor Newsom and lawmakers to implement reforms targeting accountability within the oil sector. Investigations revealed suspicious market transactions and inadequate refinery maintenance planning contributed significantly to price increases.

A state watchdog identified these issues early this year and suggested measures including a minimum inventory requirement for stable supply maintenance. These findings pointed out that refinery margins were responsible for most price spikes observed between July and September 2023 due to offline refineries failing in backup supply arrangements.