In the ongoing political battle over gasoline prices, California Governor Gavin Newsom has found himself in a tricky situation. With an eye on a potential presidential run in 2028, Newsom is facing a delicate balance between his state's energy policies and the economic fallout of the war in Iran.
Newsom's recent offensive against Donald Trump's handling of gasoline prices is a strategic move to shift the narrative away from his own state's challenges. However, this strategy may not be as straightforward as it seems, as his fingerprints are all over California's oil and gasoline industry regulations.
The High Cost of Energy Dominance
The Trump administration's 'National Energy Dominance Council' has been touted as a game plan to stabilize energy markets during Operation Epic Fury. Yet, the reality on the ground in California tells a different story. Newsom's state is facing the consequences of its own policies, with two major refineries idling, hundreds of workers laid off, and the highest gasoline prices in the nation.
While Newsom's administration has made some efforts to extend olive branches to the industry, the long-term goal of phasing out gasoline by 2045 remains. This has led to a complex web of environmental rules and an increasing reliance on imported gasoline.
A Global Oil Price Whipsaw
The international situation has not helped matters. Since the U.S.-Israeli strikes on Iran, global oil prices have been volatile, reaching a four-year high and prompting an unprecedented emergency oil release by an international coalition. This has provided ample ammunition for Democrats to attack the White House on affordability concerns, with even Republicans expressing anxiety.
A Political Tightrope
For Newsom, the political imperative to focus on gasoline prices outside his home state is clear. Veteran Democratic strategist Matt Rodriguez highlights the potential vulnerabilities in Newsom's record on homelessness, crime, and affordability, with the oil refineries right at the heart of this debate.
Republicans in California have been capitalizing on this, keeping the pressure on Newsom. The state's Democratic-controlled legislature has largely ignored calls for a special session on gasoline prices, but even some Democrats acknowledge that Newsom's history of antagonizing the oil industry could be a liability in 2028.
A Special Session, A Special Problem
Newsom's special legislative sessions on gasoline prices, which opened the door to capping refiner profits and requiring additional storage, have made him 'directly responsible' for the state's high prices, according to former California Assembly Majority Leader Ian Calderon.
The Newsom administration argues that price spikes are not new and that the special session laws have helped stabilize the situation. However, the closure of refineries like Phillips 66 and Valero has led to an increased reliance on imports, making California more vulnerable to international commodity market fluctuations.
A Complex Web of Factors
The reality of gasoline economics in California is complex. The state has been importing more gasoline than it exports since 2015, tying its prices to international fluctuations. This complexity is a challenge to communicate to voters, who are more likely to remember that California has the priciest gasoline in the country.
As Newsom navigates this delicate situation, the question remains: Can he find a credible solution to the gasoline price crisis before it becomes his Achilles' heel?
