While Utah leaders have worked on infrastructure tax credits and incentives for gas production, they keep raising their eyebrows at the pump, frustrated with the fact that the average price of gas has continued to rise above the national average this year.
Especially Utah House Speaker Mike Schultz, a Republican from Hooper, who was behind a recent law thatlowered the gas tax at the pumpby 6 cents beginning on July 1 until the end of this year. Despite that effort, on Tuesday, Utah was among the states with the highest gas prices in the country, withAAA recording an average of $4.36 per gallon, surpassing the $4.06 national average.
Schultz doesn’t have any heartburn on local refineries exporting about 40% of the gas they produce outside state lines, he said during a committee hearing discussing a legislative audit on the state’s gasoline supply system and oil and gas tax structure on Tuesday. However, he took issue with the potential of incentives like the High Cost Infrastructure Tax Credit — the largest credit offered by the state to improve refineries’ infrastructure — benefitting other states while Utah prices keep going up.
“My concern is Utah taxpayers are subsidizing these tax credits, but yet the other states, surrounding states, are getting the benefit from that,” Schultz said.
The High Cost Infrastructure Tax Credit has been approved for four refiners since it went into effect in 2019, according to the audit. The program has reimbursed a total of $53 million to refineries to support their infrastructure and help improve air quality by asking refineries to produce Tier 3 fuel.
Schultz’s concern, he said, is that there aren’t any restrictions on the gas sales of those refineries and exports are allowed. Overall, he worries about what is causing Utah prices to go beyond the national average while the temporary tax break he backed is in effect.
“I paid very close attention to the gas tax reduction on July 1, dropping six cents. And for the first few days of July, when that happened and took effect, Utah was right on par with the national average on gasoline,” Schultz said. “But then as we started to get into mid July and then today, it just kept going higher as far as Utahns paying more than the national average.”
Legislative auditors didn’t have an answer for that question, saying that they had focused on a broader picture to determine what to do long term to expand a pipeline to import cheaper fuel from Texas, as well as additional storage solutions.
But, Jake Garfield, deputy director at the Utah Office of Energy Development, did have an answer, and he blamed California.
“Unfortunately, just by the reality of geography, we are subject to the poor policy decisions made in the state of California,” he said in response to Schultz’s question. “There have been two very large refineries closed in California just in the last couple months due to political decisions made in California, and because of that, California has become particularly exposed to international volatility in prices, particularly in the Middle East.”
The Iran war has made an impact on prices all over the country, he said, but that shock has been particularly higher on the West Coast because of the refinery closures. States like Wyoming and Colorado, which have lower gas prices than Utah, are closer to the Gulf Coast, benefitting from lower prices.
“We are looking for ways to address that. We have been meeting with the numerous partners that are interested in expanding the Pioneer pipeline that currently comes from Wyoming to bring more refined products into the state,” Garfield said.
The High Cost Infrastructure Tax Credit has also been essential to drive up the production of Tier 3 gas — a reduced-sulfur fuel that reduces tailpipe emissions in newer cars by up to 80% — Garfield said.
“Without the high-cost infrastructure tax credit, I’m not sure where we would be right now. But I think our air would be significantly dirtier, and there would be less production of those fuels at our refineries,” Garfield said.
During the hearing Senate Minority Leader Luz Escamilla, a Salt Lake City Democrat, highlighted that standardizing Tier 3 fuels in the Wasatch Front has made an impact in the Salt Lake Valley, which is highly affected by air pollution because of its inversion-prone topography, among other causes.
“I heard (the speaker’s) comments related to the pricing, which is also critical as our families are dealing with affordability,” Escamilla said. “And pricing is important, but also taking into consideration the entire picture of the air quality.”
Keep it Clean. Please avoid obscene, vulgar, lewd,
racist or sexually-oriented language. PLEASE TURN OFF YOUR CAPS LOCK. Don't Threaten. Threats of harming another
person will not be tolerated. Be Truthful. Don't knowingly lie about anyone
or anything. Be Nice. No racism, sexism or any sort of -ism
that is degrading to another person. Be Proactive. Use the 'Report' link on
each comment to let us know of abusive posts. Share with Us. We'd love to hear eyewitness
accounts, the history behind an article.
(0) comments
Welcome to the discussion.
Log In
Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.