Report on California Gas Prices and Sustainable Development Goals (SDGs) Implications – July 1, 2025

Current Gas Price Overview

As of July 1, 2025, the American Automobile Association (AAA) reports the following average fuel prices across the United States and California:

• National average for a gallon of regular grade gasoline: $3.178
• California average prices:
  • Regular grade gasoline: $4.581
  • Mid-grade gasoline: $4.807
  • Premium-grade gasoline: $4.985
  • Diesel: $5.115
• Lowest regular grade gasoline price found in Mississippi at $2.711

Context and Challenges

California continues to experience the highest gas and energy prices nationwide, despite its abundant oil reserves. This situation has significant socio-economic impacts, including energy poverty affecting over 21 million Americans in 2024, with California households disproportionately burdened. Energy poverty exacerbates poverty levels, undermining Sustainable Development Goal 1 (No Poverty) and Goal 7 (Affordable and Clean Energy).

Policy Background and Regulatory Environment

1. Fracking and Extraction Regulations: Since 2019, California Governor Gavin Newsom has implemented strict regulations on hydraulic fracturing (fracking) and steam-injected oil drilling, including a ban on new fracking permits starting in 2024. Senate Bill 467, signed into law in 2022, prohibits new or renewed permits for hydraulic fracturing and related extraction methods. These policies align with environmental protection goals under SDG 13 (Climate Action) but have contributed to higher energy costs.
2. Impact on Production and Prices: These regulatory measures have led to reduced in-state oil production, contributing to elevated gas prices compared to neighboring states such as Nevada ($3.78) and Arizona ($3.25).

Economic Contributions of California’s Oil and Gas Industry

Despite regulatory challenges, the oil and gas sector remains a significant economic driver in California:

• Total jobs provided: 536,770
• Direct employment: 148,140 Californians
• Economic contribution: $338 billion to California’s economy
• Annual wages and benefits to oil and gas workers: $23 billion
• Total wages supported by the industry: $53.4 billion

This economic activity supports SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation, and Infrastructure).

Proposed Gas Price Reform Plan by Gubernatorial Candidate Steve Hilton

Steve Hilton, a Republican candidate for California Governor, has proposed a four-point plan aimed at reducing gas prices to $3.00 per gallon while maintaining environmental responsibility. His plan addresses both economic and environmental sustainability, relevant to multiple SDGs including SDG 7 (Affordable and Clean Energy), SDG 8 (Economic Growth), and SDG 13 (Climate Action).

Four-Point Gas Price Reform Plan

1. Eliminate Extreme Environmental Program Costs: Remove hidden taxes such as payments to the cap-and-trade system, which currently fund projects like the high-speed rail initiative.
2. Suspend Low Carbon Fuel Standard (LCFS) and Excessive Refinery Regulations: Reform outdated or duplicative regulations originally intended to reduce smog, to reduce costs without compromising environmental standards.
3. Reduce Bureaucracy and Reform Procurement: Streamline processes to reduce excise taxes by 50%, ensuring that gas tax revenues are efficiently allocated to transportation infrastructure.
4. Expand In-State Oil Production: Aggressively reduce crude oil imports, especially from countries with poor environmental and human rights records, by removing permitting delays and restrictive laws to increase local production.

SDG Alignment and Considerations

• SDG 1 – No Poverty: Addressing energy poverty by making energy more affordable for low-income households.
• SDG 7 – Affordable and Clean Energy: Balancing the need for affordable energy with environmental regulations to ensure sustainable energy access.
• SDG 8 – Decent Work and Economic Growth: Supporting job creation and economic contributions from the oil and gas industry.
• SDG 9 – Industry, Innovation, and Infrastructure: Improving infrastructure funding through efficient tax allocation and supporting industry innovation.
• SDG 13 – Climate Action: Navigating the trade-offs between climate policies and energy affordability to achieve net-zero emissions by 2045.

Conclusion

California’s high gas prices reflect a complex interplay between environmental policies and economic realities. While stringent regulations support climate action goals, they also contribute to energy affordability challenges impacting vulnerable populations. The proposed reforms by Steve Hilton aim to recalibrate this balance by reducing regulatory burdens and enhancing local production, potentially advancing multiple Sustainable Development Goals simultaneously.

References and Further Reading

• AAA Gas Prices Report
• California Oil and Gas Industry Economic Report
• Steve Hilton’s Gas Price Reform Plan
• NPR Report on California Fracking Regulations
• LAEDC Report: Oil and Gas in California

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 7: Affordable and Clean Energy
   • The article discusses high energy and gas prices in California, energy poverty, and the need for affordable energy solutions.
2. SDG 8: Decent Work and Economic Growth
   • The article highlights the economic contribution of California’s oil and gas industry, including job creation and wages.
3. SDG 12: Responsible Consumption and Production
   • References to environmental regulations, such as the Low Carbon Fuel Standard and Cap and Trade, relate to sustainable production and consumption.
4. SDG 13: Climate Action
   • The article mentions California’s policies aimed at reducing carbon emissions and the goal of net zero emissions by 2045.
5. SDG 1: No Poverty
   • Energy poverty pushing people further into poverty is discussed, connecting to the goal of eradicating poverty.

2. Specific Targets Under the Identified SDGs

1. SDG 7: Affordable and Clean Energy
   • Target 7.1: Ensure universal access to affordable, reliable, and modern energy services.
   • Target 7.2: Increase substantially the share of renewable energy in the global energy mix (implied through discussion of environmental regulations).
2. SDG 8: Decent Work and Economic Growth
   • Target 8.1: Sustain per capita economic growth in accordance with national circumstances.
   • Target 8.5: Achieve full and productive employment and decent work for all women and men.
3. SDG 12: Responsible Consumption and Production
   • Target 12.2: Achieve sustainable management and efficient use of natural resources.
   • Target 12.4: Achieve environmentally sound management of chemicals and all wastes throughout their life cycle.
4. SDG 13: Climate Action
   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
5. SDG 1: No Poverty
   • Target 1.2: Reduce at least by half the proportion of men, women and children living in poverty in all its dimensions.

3. Indicators Mentioned or Implied to Measure Progress

1. Energy Prices and Affordability
   • Average gas prices per gallon in California and other states (e.g., $4.581 for regular gas in California vs. $2.711 in Mississippi) serve as an indicator of energy affordability (related to SDG 7.1).
2. Energy Poverty Statistics
   • Proportion of households behind on energy bill payments (e.g., 1 out of 6 households, or 21.12 million Americans) indicates energy poverty levels (related to SDG 1.2 and SDG 7.1).
3. Employment and Economic Contribution
   • Number of jobs provided by the oil and gas industry in California (536,770 total jobs, 148,140 directly employed) and economic contribution ($338 billion) measure economic impact (related to SDG 8.1 and 8.5).
   • Annual wages and benefits paid ($23 billion to oil and gas workers, $53.4 billion to all workers supported) serve as indicators of decent work and economic growth.
4. Environmental Regulation and Emissions Targets
   • Implementation of policies such as the Low Carbon Fuel Standard, Cap and Trade, and the goal of net zero carbon emissions by 2045 indicate progress towards climate action (SDG 13.2).

4. Table: SDGs, Targets and Indicators

Source: californiaglobe.com