California's Fuel Embargo

California often begins trends that permeate across the USA. You name it, music, clothes, entertainment and Green energy sources, like solar, electric cars and now low carbon fuel standards.

There are good trends and bad trends. The skateboard and the Schwinn Sting-Ray bike all started in LA. Green energy is a good trend to supplement the existing fuels but not one to replace them. That is what the low carbon fuel standard is. It mandates the California's fuel refineries (there are only a few of them) to reduce the carbon intensity in any fuel made and to increase the production of non-petroleum fuels (green energy). California is promoting biofuels and making it harder for petroleum based fuels to exist at the current levels.

The state seems to want to force all Californians to be using biofuel at the end of 10 years. Oh, there still will be diesel and gas refined but it will be so expensive costing another $2-3 a gallon. This increase in price may be here as early as 2015. Half of the refineries would stop production because of costs. The refineries would have a choice, either comply and increase the price of gas and diesel or close. Making the upgrades to the refineries costs millions and the demand for biofuels does not warrant this low carbon standard. Basically, in California, gas and diesel will be replaced with comparable biofuels by 2020 or so. Until then, consumers will find refineries making less of both and what is available will rise in price as we get closer to 2020.

It is stupid. It will impact commuters, business, trucking, taxi etc. If it continues, the lines for non-biofuel will become longer and longer as supplies are minimized. It will be a slow process. The regulation went into effect in 2011 and most consumers know nothing about it. In California, that it would result in the loss of 30% of the state’s refining capacity by 2017 and 30% percent by 2020. Between five and seven of California’s 14 fuel refineries could cease production by 2020.

Last year, the Wall Street Journal concluded, "So the California government is forcing oil and gas companies to sell a fuel that barely exists … Californians could pay $6 a gallon and lose millions of related jobs".

2015 is the critical year for refineries because it is then they must meet additional criteria for refining fuel. Whether or not they will remains to be seen. Forcing refineries to make a new fuel that few actually use is insane. If there were already millions of biofuel cars on the road, that would make sense, but that is not the case at all.

Sometimes, California is its worst enemy.