California’s Costly, Energy-Islanding Regulation: Why Big Oil Wants to Keep It

This story is about California gas prices, not home energy upgrades, but it touches on costs many homeowners already feel at the pump. California requires a special gasoline blend called CARBOB, made by only a small number of mostly in-state refineries. When something disrupts that supply, replacement fuel has to come from far away, sometimes South Korea or India, and can take weeks to arrive. During that gap, drivers pay a premium. State analysis puts this added cost, sometimes called the "Mystery Gasoline Surcharge," at about 41 cents a gallon on average and 75 cents at major-brand stations, adding up to more than $59 billion in extra payments from 2015 to 2024.

A 2024 state proposal would have let sellers bring in standard, non-California gasoline during shortages if they paid a 25-cent-per-gallon fee, with the money going toward retiring older, higher-polluting cars made before 2004. Modeling found this could offset the emissions difference while giving drivers of old vehicles help moving to a new or used electric car. Two bills built on this idea, AB 2672 and SB 1245, were both opposed by the Western States Petroleum Association, an oil industry trade group, and stalled in the legislature.

For homeowners, this doesn't change any rebate or upgrade program directly. It's a reminder that fuel costs and clean-car policy in California remain tangled up in industry lobbying, and that switching an old gas car for an EV remains one of the proposals on the table for cutting both emissions and household fuel costs.