DANIEL VAUGHAN: California's Liberal Turn Destroys Natural Advantages
Last week, Gavin Newsom and California celebrated that the state had overtaken Japan to become the world's fourth-largest economy. In terms of raw wealth, it showcases how powerful the United States is as a whole, as one of our constituent parts is larger than full countries. But California is getting there through inertia, not real growth.
When you analyze where California is tracking and what is happening, you'll be excused for wondering why it's failing. California's ascension in the rankings is a testament to Japan's multi-decade malaise rather than a prize for California.
Case-in-point: Gavin Newsom is scrambling to prevent the state from experiencing an energy shock this week. The future of California looks more and more every day like the path of Germany, where we wonder how they've managed to squander blessings of every kind.
Valero Energy Corporation, one of the largest oil refineries in the world, is shuttering operations in its 170,000-barrel-per-day facility in San Francisco. All operations will cease by April 2026, a year from now. Reuters noted that Newsom was scrambling and "told state officials to step up efforts to guarantee reliable fuel supplies for the state."
That single facility represents 9% of the state's crude oil refining capacity. In a year, it'll be gone.
Valero is only the latest company to leave California. Chevron left last year, calling California a "tough place to do business." Other companies, like Phillips 66, have made similar decisions.
The moves are coming after Newsom signed a law allowing the state of California to "micromanage" refineries. The Wall Street Journal notes, "Oil companies warned the law could make operating refineries uneconomic. Mr. Newsom didn't listen. Instead he shot the messengers: 'They buy all these ads saying somehow it's California's fault. They've been manipulating you. They've been lying to you.'"
It turns out that the companies told the truth and are leaving the state, as many people are doing. Meanwhile, California's country-leading gas prices are expected to soar, with shortages a real issue in the coming years.
Let's reflect on this for a moment: a state that praises its world-leading economic growth is expected to experience energy shortages because its radical leftist agenda is trying to micromanage refineries.
The Journal further notes, "Then there's the California Air Resources Board's recent tightening of its low-carbon fuel standard, which the board predicted would raise gas prices by 47 cents a gallon this year. All of this plus taxes explain why California's gas prices are on average $1.64 a gallon higher than nationwide. The Valero and Phillips 66 closures could lift prices by another $1 a gallon by some estimates."
California's situation resembles Germany's: a rich left-wing nation struggling to keep the lights on. Germany has invested hundreds of billions in renewable energy, but as it has done so, it has found itself at the mercy of Russian energy prices and nature.
The first part, you know, Germany and Europe make big claims on renewable energy and supporting Ukraine while purchasing Russian oil, thus funding the war against Ukraine. To call Germany and Europe useless in the Ukraine war is an understatement. They preach one thing while paying the enemy.
But the other side of the coin is this: Germany remains dependent because it designed a renewable energy grid without considering that it's a northern European country with long, dark winter days that dominate, and wind and water can become still.
Reports point out the obvious, "You can guess what went wrong. February and March were unusually wind-free, onshore and offshore. A lack of rain meant hydropower underperformed. March was sunnier than usual, which helped to boost solar-electricity output compared to a year earlier. But we're talking about Germany in March. Relatively short daylight hours in a northern latitude meant this boost wasn't enough to offset the decline in wind generation."
The Journal noted of them, "Germany is further down the road of renewable power than many other large economies. Its energy mess is enough to make everyone else realize it's not an example to follow."
Germany is not an example to follow, nor is California. California consumes half of all the oil produced in the Amazon Rainforest. Instead of drilling and refining in the United States, California is funding the destruction of the Amazon Rainforest.
That is green energy policy in a nutshell. They don't want us to do it in America, so they ship it off to other countries and claim we're doing a great job. Germany shut down all of its nuclear plants for no reason at all. And now they're beholden to the weather and Vladimir Putin.
California is a wealthy state with all the privileges in the world. Instead of taking their role seriously in the broader American and world economy, they're destroying everything that makes the state possible. And this is just one example - you can see this in other industries, too, such as Hollywood.
We may be the last generation that views Hollywood as the place to make movies. California is praising its ascension on a list while people flee, its advantages crumble, fire hydrants don't work, and the state faces a looming energy crisis.
That's the reality of Gavin Newsom and the green energy lobby. It's a disaster from start to finish.