Two neighboring governors are concerned about what California Gov. Gavin Newsom’s proposed oil mandate would do to their states.
Nevada Governor Joe Lombardo and Arizona Governor Katie Hobbs penned a letter to Newsom on Tuesday saying his mandate would raise fuel prices and disrupt the regional economy.
The backstory: Newsom called a special session of the California Legislature to consider his proposal to require oil refiners to keep a minimum reserve on hand to reduce price spikes.
What they’re saying: Lombardo and Hobbs said in their letter that they are concerned that mandating refinery inventory would directly raise the cost of fuel for all residents of California, Nevada and Arizona.
- They cited a recent report from the California Energy Commission that found that Newsom’s proposal “may artificially create shortages in downstream markets.”
- “This conclusion alone is deeply troubling and warrants bipartisan, regional communication on this legislation before proceeding,” the letter reads.
- They also shared concerns that the mandate would result in oil refineries being shut down.
- “Despite ongoing conversations about the root causes of rising fuel costs, it is evident that increased regulatory burdens on refiners and forced supply shortages will result in higher costs for consumers in all of our states,” the letter reads. “With both of our states reliant on California pipelines for significant amounts of our fuel, these looming cost increases and supply shortages are of tremendous concern to Arizona and Nevada.”
- They finished the letter by asking Newsom to reevaluate the mandate “for the good of our neighboring constituencies, and for the greater good of consumers across the West.”
Read the letter here:
