Utah’s gas price report targets California

Illustration of a fuel nozzle separating color blocks of green and yellow with ballot elements behind.

Image: Brendan Lynch/Axios

A new state report says that “government interference in the free market” has pushed up Utah’s gas prices by forcing western oil refineries to close and reducing supply.

  • Gas prices in Utah remain well above the national average.
  • However, a closer look at recent refinery closures casts doubt on the report’s conclusion that climate-focused “regulation” is primarily to blame.

Driving the news: In the report commissioned by Gov. Spencer Cox, the state Department of Energy Development found that “west coast demand” for gas in Utah was driving prices higher.

  • While refining capacity in Utah has grown 24% over the past decade, it has declined across the western states as a whole.

What you say: “We now understand why gas prices are high in Utah and can work to increase supply and lower prices,” Cox tweeted.

  • It’s unclear how Utah could increase its supply with refineries already at capacity and crude oil production higher than any year on record.

Details: The report blames federal and state “decarbonization” policies for the slowdown in oil refining, citing “national rhetoric and government involvement in reducing fossil fuel use.”

  • Government incentives have prompted refiners to switch from gasoline to biofuel products, the report says, and a federal analysis this summer confirmed those switches are contributing to high gas prices in the West.
  • It also highlights California’s aggressive environmental regulations, arguing that they have caused local refiners to slow down, hamper supplies and drive up prices in the region.
  • It’s unclear how much gas Utah exports to California; The only two pipelines from our refineries end in Nevada and Washington – and California’s fuel regulations limit its imports from other states.

Yes but: Much of the reduced refining capacity in the west originated outside of California, and the refiners themselves gave reasons unrelated to government intervention.

  • In terms of combined volume, Alaska and Hawaii have contributed even more to the loss of refining capacity in the West than California over the past decade.

Reality check: Eastern states are not exempt from federal regulations but still enjoy lower rates.

  • The East has many more pipelines connected to cheap fuel from the Gulf Coast – a supply Western states cannot tap into.

Between the lines: The report fails to recognize the threat of climate change, saying only “some” refinery regulations are warranted to limit air pollution in Utah.

  • With its focus on regulatory complaints rather than geographic factors and pandemic-related demand fluctuations, the report is something of a gift to the oil and gas industry.

What’s next: Oil companies are eyeing two potential pipeline routes to bring more gasoline to the Mountain West, the report said.

  • The authors also recommend more efficient public transportation and government messaging to reduce Utahns’ fuel consumption, which has been growing faster than the population.