California emissions law could make gas prices jump

California's greenhouse gas reduction law could force drivers to pay more at the pump as soon as next year.
March 10, 2014 12:00:00 AM PDT
Get ready because you may have to pay more at the pump as soon as next year. California's current greenhouse gas reduction law has already impacted many large companies, but pretty soon the move to cut down on pollution could affect all drivers.

Shelling out more cash at the gas station affects everyone's bottom line.

"Even that small increase of it makes a big difference," said Fresno resident Raymond Amores.

"Everything is going to be cut back," said Fresno resident Todd Woodard. "You have to cut back on food and travel of course. You can't go out of town anymore. You can't do all the fun things you'd want to do with your family."

Woodard and his family aren't happy because he and the more than 35 million people who live in California may soon have to shell out more cash for gasoline. The higher prices could kick in as early as next year because of stronger regulations on oil companies.

"We are talking here about gasoline standards, which would impact refineries most," said Patrick DeHaan with GasBuddy.com.

The stricter rules mean higher costs for those companies, which translates into more dollars out of your pocket.

"California is one of the most stringent emissions laws to begin with, and when you start to talk about improving or making those emissions laws even more strict, it does have a tendency to put upward pressure on gasoline prices," said DeHaan.

Industry insiders say starting in 2015, the cap-and-trade program -- which currently only impacts large manufacturers -- will also apply to fuel distributors. Cap-and-trade is a program which aims to fight greenhouse gas emissions by allowing businesses to bid on pollution allowances. Companies which pollute more are forced either to buy more credits or use more green technology so they pollute less.

"It will obviously cause prices to go up but to what degree is the big question," said DeHaan.

Some analysts believe the stricter regulations will cause price increases of at least 12 cents a gallon immediately, while others say it's still too early to tell just how much these changes will affect your bottom line.


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