Arizona and Nevada governors form bipartisan alliance against Newsom refinery bill

Arizona Gov. Katie Hobbs submitted a joint letter with Nevada Gov. Joe Lombardo on Tuesday, Sept. 10, urging California Gov. Gavin Newsom to reconsider legislation that could increase gas prices for Arizonans and Nevadans.

ABX2-1 and similar legislation would authorize the California Energy Commission to impose requirements for refiners in the state to maintain minimum levels of inventory and refined transportation fuel meeting California specifications. It would also impose a civil penalty on anyone who does not comply with the regulations adopted in which case the Commission would be able to seek any form of remedial relief to enforce compliance.

According to a report from the Commission, the bill could “artificially create shortages in downstream markets,” prompting Hobbs and Lombardo’s concern over gas and transportation costs in Arizona and Nevada.

“The people of Nevada and Arizona should not have to foot the bill for California’s misguided policies — especially when it comes to higher gas prices,” Lombardo said. “Lowering fuel costs is a bipartisan issue, and I’m grateful to partner with Governor Hobbs as we fight back against policies that will raise prices and cause regional economic disruption.”

The letter states that both governors are further concerned due to refiners saying that inventory mandates could result in supply shortages and potential shutdowns.

“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,” reads the letter. “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.”

Hobbs and Lombardo concluded the letter by asking Newsom to stall implementation of the legislation and stated that the Arizona Governor’s Office of Resiliency and Nevada Governor’s Office of Energy are ready to assist in finding solutions for lowering regional energy costs.

“Arizonans are struggling with the high cost of living, we can’t afford yet another price hike,” Hobbs said. “I urge Governor Newsom and the California legislature to reconsider this legislation that could slash Arizona’s gasoline supply, raise prices at the pump and threaten Arizona’s strong economic growth. I’m glad to work with Governor Lombardo on this critical issue, and hope we can come together as a region to deliver lower fuel costs to all of our constituents.”

However, Newsom posted on X that this legislation is actually the best solution for the region.

“California refineries choosing not to backfill their supply when they go offline causes prices to spike — both here in California, and in Arizona and Nevada,” reads his post. “Our proposal will save consumers — including those in Arizona and Nevada — hundreds of millions of dollars every year by helping prevent these price spikes.”