An affordable California is possible
As Californians face incredible pressures on their household budgets and the state's cost of living remains among the highest in the nation, our state's leaders continue to repeat a pattern of seemingly endless investigations into government failures.
It has become tradition now to gives the perception of action and accountability while nothing actually changes. Take for instance the recent investigation into high natural gas prices in February. Six months later, Californians know nothing more than when the first howls of protest from the governor began. Meanwhile, residents feel the strain of rising gas and electricity prices, not to mention seeing homeownership become further out of their reach. To actually deal with these problems, the government should rely on proven, free-market solutions to relieve the economic misery they have created for millions of Californians.
The focus of the recent investigation was on natural gas prices. California imports 90% of its natural gas, stubbornly refusing to use its own deposits. In fact, in the 1980s, approximately 500,000 cubic feet of natural gas originated from within California, a number that fell to 133,136 cubic feet in 2021 and represents only 7% of the state's consumption. That same year, the state denied 109 fracking permits, restricting access to our own supply, the exploration of which would stabilize prices when they are most vulnerable to spikes.
During the fierce cold last December, California's demand predictably rose, but reduced capacity issues with the West Texas pipeline spiked prices 300% from January 2022 and further strained supply. State media reported countless stories of Southern California families' shockingly high energy bills, some more than $900 a month, a fact made more tragic given that much of this financial pain could have been avoided entirely had the state made use of its own natural gas deposits. Unfortunately, the governor failed to directly address the problem and instead relied on more symbolic gestures: a sternly worded letter to federal agencies and a call for an investigation that never happened.
Electricity prices are also set to rise as the sweltering summer months approach, limiting the ability of California families to cool their homes. The California Public Utilities Commission approved Southern California Edison's request for a rate hike (7.21% on average), in addition to last year's 17% increase. The governor's recent proposal to influence energy producers to build what are prohibitively expensive geothermal power plants was yet another example of a high profile yet unworkable “solution.” But it sure gives the impression the government is “doing something.”
The governor acknowledged that renewables have actually lessened electricity supply and increased power bills during peak demand periods, yet he continues to resist a balanced energy portfolio of renewables and reliable fossil fuels. Instead,
he proposes an expensive and questionable technology that may take decades to develop. Housing costs remain another perpetual burden for Californians. In March, the median cost of a single-family California home was $791,490, over $415,000 higher than the national average. According to a PPIC study, 500,000 people cited housing costs as their primary reason for relocating since 2015. Rather than focus on developing single-family homes by suspending onerous building regulations, instead we get ideologically driven “housing grants” focused on “affordable housing,” complete with billions of dollars spent on these projects despite their recorded failure.
Californians face unprecedented financial stress, but the state continues to pursue unworkable policies with little relevance to everyday people. To improve the lives of Californians, our governor should promote proven policies that already lower costs elsewhere: permitting fracking and energy exploration to lower natural gas prices; balancing alternative energy sources with fossil fuels; and fast-tracking development of single-family homes.
Californians need more concrete action and less empty promises.