You may have heard the popular saying, that “Under socialism, you line up for bread. Under capitalism, bread lines up for you.” The joke highlights the abundance of free markets versus the scarcity created by heavy-handed government control. Now, the editorial board of Issues & Insights is worried that Californians could soon be waiting in line for gasoline, as the state government, led by Gov. Gavin Newsom, pushes refineries out. I&I writes:
California has the trendiest, and most foolish, energy policies in the U.S. The result is a return to the early ’70s, when drivers lined up around the block, hoping and praying the gasoline wouldn’t run out before they got to the pumps.
“California’s oil industry now sits at the precipice of complete collapse,” says Edward Ring, director of water and energy policy at the California Policy Center, “and if that happens, more imports will not prevent lines at the pumps.”
How could California, which has the sixth most proved crude reserves in the country, be looking over the edge of a gasoline crisis?
California is hurtling toward the gas panic of ’25 because it has been at war with fossil fuel for decades. In the case of motor fuel, “the state legislature has disincentivized the production, distribution, and refining of oil in California,” says Ring, while “cities and counties have followed suit.”
Two refineries are closing their facilities, the companies that own them having determined that it’s become too difficult to do business in California, which is hostile to energy companies that aren’t sucking up taxpayer-provided dollars to build politically preferred solar and wind projects.
“By this time next year,” says the Pacific Research Institute, “there might not be even a dozen refineries left in the state to produce the 38 million gallons of California’s boutique blend that’s consumed every day.”
A quarter of a century ago, there were 23 refineries in California, 40 in 1983. The remaining sites are the only ones in the country that make California’s special formulation – which adds 10 to 15 cents to the cost of a gallon of gasoline – so importing fuel from other states is not a readily available option.
Action Line: What happens when California, the nation’s largest state economy, is crippled by its own regulatory burden? It could drag the entire country down. Gavin Newsom is obviously planning a run for president in 2028. Bringing California’s burdensome government to the rest of America would be a disaster. Click here to subscribe to my free monthly Survive & Thrive letter.
