California"s gasoline proposal sparks alarm in Arizona and Nevada
- Arizona and Nevada governors warn that California's gasoline refinery proposal could lead to supply shortages and higher prices.
- The proposal requires refineries to build large storage tanks, with significant costs and time involved in construction.
- The governors emphasize that the increased costs will ultimately affect consumers in their states, highlighting the need for careful consideration of the proposal.
Governors Katie Hobbs of Arizona and Joe Lombardo of Nevada have expressed serious concerns regarding a gasoline refinery proposal by California Governor Gavin Newsom. They argue that the proposal, which mandates refineries to construct large storage tanks, could lead to gasoline supply shortages and increased prices for consumers in their states. The governors highlighted that both Arizona and Nevada depend heavily on California's pipelines for fuel, making them particularly vulnerable to any disruptions in supply. Newsom's plan requires refineries to hold more than two weeks' worth of gasoline output, a move that Chevron estimates would cost $35 million and take a decade to implement for each tank. The governors pointed out that the costs associated with building and maintaining these tanks would ultimately be passed on to consumers, exacerbating the financial burden on residents in their states. Additionally, the California Energy Commission has indicated that the proposal could artificially create shortages in downstream markets, further raising costs for consumers in Arizona and Nevada. With California's gas prices already the highest in the nation, the potential for increased prices due to regulatory changes is alarming for neighboring states. In response to the opposition, Newsom has claimed that his proposal aims to save consumers money by preventing price spikes. Hearings on the proposal are scheduled for September 18, 19, and 26, with a vote set for October 1, indicating that the issue will be addressed in a timely manner.