How ‘$300 million just went poof'

Politico

18-07-2025

With help from Alex Nieves, Seb Starcevic, Josh Siegel and Zack Colman
LCFS STRIKES AGAIN: Gov. Gavin Newsom has been fighting for more than a year with Republicans and members of his own party about whether the low-carbon fuel standard amendments will raise gas prices for Californians.
Turns out, they already have. But no one noticed.
According to two industry sources granted anonymity to discuss proprietary market data, refiners started incorporating the new rules into their prices in January. As a result, California's gas prices have been roughly 5-8 cents per gallon higher at the pump since then, despite the underlying regulations not taking effect until this month. And drivers are out roughly $300 million that they shouldn't have been charged, according to their calculations.
The episode illustrates the degree to which rhetoric and reality are almost entirely divorced in California's interminable gas-price wars — and the difficulty of puncturing the curtain that separates the two.
At the same time that Senate Minority Leader Brian Jones launched his petition to repeal the '65-cent gas price hike,' GOP gubernatorial candidate Steve Hilton was holding a press conference at a gas station in San Jose to call for rolling the LCFS back and replacing the California Air Resources Board, and Senate Democrats were introducing a bill to freeze LCFS credit prices, the thing they were trying to prevent had already happened.
'It was priced in on Jan. 1, and no one really knew about it,' said Will Faulkner, a carbon market analyst.
How did this happen? It goes back to when the California Air Resources Board approved the amendments in November and then submitted them to the Office of Administrative Law a month later — too late for them to be approved to take effect Jan. 1 as intended. Then, OAL rejected them, pushing the timeline back further.
But OPIS, the third-party energy price reporting service that converts carbon prices into cents-per-gallon prices for fuel trading purposes, started factoring in the amendments in January, on the assumption they would be retroactive once OAL approved them. CARB announced in May that wouldn't happen, so OPIS reverted back to the pre-amendment rules until the amendments kicked in July 1.
CARB confirmed the snafu Wednesday, the same day it sent a memo to board members detailing the findings — and said it shows the program is ultimately working as intended, price-wise.
'It does sort of validate the points that we were making over time,' said CARB Chair Liane Randolph. 'The pricing has played out in pretty much the way we anticipated.'
But given all the scrutiny this program has received — and how many estimates there've been of its impact on gas prices — it's fairly stunning that no one pointed out that it was already priced in at the pump starting in January.
That's not even accounting for the fact that since it wasn't in effect, refiners kept the extra money that they would have spent on buying credits. At an average of 7 cents per gallon over 4.3 billion gallons of gas sold, they collected roughly $300 million before the rules actually kicked in. And that estimate doesn't include diesel, just gasoline.
'No one's paying attention,' Faulkner said. 'The No. 1 thing in Sacramento is affordability, and $300 million just went poof.'
Read the rest of Debra's column here.
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HIGH-SPEED CLAWBACK: The Trump administration has officially nixed $4 billion in federal grants earmarked for California's high-speed rail project.
President Donald Trump announced the news in a post on Truth Social, writing that not a 'SINGLE penny' in federal dollars will go towards 'this Newscum SCAM ever again.'
The announcement Wednesday night came after the U.S. Transportation Department issued a scathing report last month slamming the ambitious development for 'missed deadlines, budget shortfalls, and overrepresentation of projected ridership,' POLITICO's Seb Starcevic reports.
Newsom immediately hit back, promising to fight the decision and billed the move as a 'gift to China,' which has made rapid advancements in clean transportation.
High-Speed Rail Authority CEO Ian Choudri has defended the project, estimated to cost nearly four times its original $33 billion price tag, writing in a letter earlier this month that the outcome of DOT's investigation was predetermined, and that the administration appeared to ignore thousands of pages of documentation provided by the project.
Attorney General Rob Bonta filed suit Thursday. Trump attempted to revoke $1 billion in federal funds for the project during his first term, but lost in court. — AN
GUMMING UP THE WORKS: The Trump administration is making things more complicated for clean energy projects on federal land.
Solar and wind projects must now get Interior Secretary Doug Burgum's personal sign-off to receive permits, according to an internal memo obtained by POLITICO. That level of heightened scrutiny could potentially slow approvals and construction across vast swaths of some of the most sun- and wind-rich portions of the country, POLITICO's Josh Siegel and Zack Colman report.
The move comes as the administration attempts to go beyond the Republican 'megabill' to clamp down on solar and wind subsidies. Hard-line House conservatives said earlier this month that they'd received assurances from Trump that he would weaken renewable energy tax credits, despite Senate Republicans' attempts to preserve them.
The megabill requires energy projects to start construction by July 4, 2026, or begin service by the end of 2027 to qualify for federal subsidies. — AN
CHARGING FOR WHOM?: Low-income and people of color nationwide are far less likely to have access to public electric vehicle charging stations, a new study from researchers at UCLA and University of Southern California finds.
The research, which analyzed more than 470,000 user reviews for charging stations alongside charger location data from the U.S. Department of Energy, found that disadvantaged communities had 64 percent fewer public charging stations per capita within a 3-mile radius than more affluent areas. Renters in multifamily housing had access to 73 percent fewer chargers per capita relative to those in wealthier neighborhoods.
These groups of people are also more likely to encounter faulty and broken charging equipment.
'EV chargers aren't just missing in disadvantaged communities — they're also more likely to be broken,' said Yifang Zhu, a UCLA environmental health professor and a study author. 'That's a double barrier for people who can't charge at home.'
That's a problem in California, where state officials are trying to increase EV adoption among a wider group of drivers, as market growth has stagnated over the last year. EVs accounted for 23.6 percent of all new car sales between January and March, according to data from the Alliance for Automotive Innovation. That represents a more than 1 percent drop compared to the same period last year. — AN
— Los Angeles Times' Sammy Roth writes in his latest column that California should embrace a regional energy market, or risk closing itself off to the rest of the world.
— The Steve Miller Band canceled its U.S. tour, saying it's concerned about extreme weather risks for fans and crew.
— New Jersey Gov. Phil Murphy is exempting a $1 billion Netflix studio from new coastal-flooding zoning rules.