Republicans announce 'half-baked' plan to lower gas prices in Arizona

Stephen Mott has worked in the construction industry in Arizona for more than 40 years. Now, at 66, he’s considering retirement — but 2023’s spike in gas prices has eaten up so much of his company’s profit that he said he’s faced with the prospect of postponing it.

“I look forward to retiring,” he said at a Wednesday morning news conference on gas prices. “But I can’t right now because of the increased fuel cost. In fact, retirement itself seems difficult, because all the products and food that is at the stores are delivered by trucks that run on fuel.”

Throughout 2023, drivers in Arizona — and Phoenix in particular — have experienced unprecedented sticker shock at the gas pump. At its peak in April, fuel rates in Maricopa County surpassed even those in Los Angeles, at an average of $5.02 a gallon.

The biggest reason has to do with the fact that Maricopa County is legally required to use only one type of fuel, called Cleaner Burning Gasoline (CBG), and the refineries that produce it experienced pipeline disruptions in March that led to a shortage.

And while gas prices have begun trending down since the summer, with experts projecting costs falling to under $3 dollars a gallon soon, Republican state lawmakers are wary of future disruptions that could recreate this year’s fiasco. To prevent that, they are championing a plan to increase the number of fuel blends available in the state’s most populous county, and give legislative leaders more power to find alternate fueling options when issues arise.

“We’re proposing a free-market solution to allow at least eight blends,” Senate President Warren Petersen said at the press conference. “We believe the EPA can and should approve these blends as they provide similar clean air benefits.”

In 1997, Arizona approved a law that requires counties with populations greater than 1,200,000 to exclusively only CBG fuel. Their intention was to reduce air pollution — also a top concern for the Environmental Protection Agency, which will ultimately have the final say in whether the fuel blends can be used.

Phoenix has consistently failed to meet air quality standards, netting a 5th place for most unhealthy days of ozone and a 7th place for worst annual particle pollution levels in the American Lung Association’s 2023 national State of the Air report. The threat of a federal takeover of the region’s air quality programs looms if existing efforts to improve pollution levels fail or are scaled back.

But Republicans are confident that the list of fuel blends they’re proposing will meet with the EPA’s approval. Two of the blends are already used in California, Texas and New Mexico, and CBG is included in the list.

According to Republicans, increasing the number of options is the key to driving down prices so that Arizonans can afford their daily commutes. Rep. Alexander Kolodin, R-Scottsdale, said that introducing competition into the state’s fuel market is the best solution.

“It’s simply a matter of classical economics,” he said. “When you increase the options available to supply a market, it has a deflationary impact on prices.”

Addressing gas prices is one of the top priorities for legislative Republicans going into the next session, which begins in January. After spending the last two years waging culture war battles (that earned a record number of vetoes under Hobbs), the party says it plans to turn its focus in the election year to mitigating the impact of inflation on everyday Arizonans by slashing taxes and lowering costs. This year, the GOP succeeded in eliminating the rental tax — which 75 cities and towns in the state benefited from — and passing a family tax rebate that reimbursed Arizonans $250 per dependent.

The party’s goal, said Sen. Justine Wadsack, R-Tucson, is to ease the strain on constituents.

“The people of Arizona can rest assured knowing that Senate Republicans will do everything in our power to ease the financial burdens forced on them by the failing big government policies in Washington D.C.,” she said.

The proposal also seeks to transfer some power from the governor to legislative leaders. If the state expects a debilitating fuel shortage, the governor has the power to petition the EPA for a waiver to use other fuel types. Earlier this year, Gov. Katie Hobbs weathered backlash from Republicans who criticized her for failing to seek a waiver in March, despite knowing that there would likely be a shortage. Refineries had reached out to the Governor’s Office to warn of anticipated shutdowns that could lead to reduced supply.

“The Legislature was not made aware of the shortage until after it had happened,” Wadsack said. “As part of our plan, we’re proposing the Legislature be immediately notified if a waiver is requested by refineries, and that the Senate President and House Speaker are provided the authority to file a waiver request directly with the EPA.”

In October, during a joint legislative committee hearing on air quality and energy, Michelle Wilson, the regulatory compliance administrator with the Arizona Department of Agriculture, informed lawmakers that a waiver wasn’t sought in March because the EPA had indicated it would be rejected. Hobbs did, however, request and win waivers in August and September.

While Republicans tout the proposal as a commonsense solution, it’s likely dead in the water if it doesn’t earn bipartisan support or the governor’s approval — and it doesn’t yet appear to have the latter. A spokesman for Hobbs panned the idea, calling it “half-baked”, and said the Democrat would be open to working on something more substantial that actually addresses the problems facing the state.

“Governor Hobbs knows Arizona working families need relief from rising costs at the pump. That’s why she successfully secured two fuel blend waivers this year, and is developing real solutions to increase supply and lower the cost of gas,” said spokesman Christian Slater. “Governor Hobbs will prioritize real solutions over politics and headlines, and looks forward to working across the aisle to deliver those.”

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