When gasoline prices spike in California, commentators reflexively search for a villain that can be blamed without confronting the state’s own policy failures. The latest example is a Fortune article suggesting that recent supply disruptions — and California’s chronically high gas prices — are meaningfully driven by Jones Act compliance and shipping constraints.
That claim is not merely misleading. It is wrong.
California’s gasoline prices have been higher than the national average for decades, long predating the current shipping disruptions cited in the article. The Jones Act, by contrast, has been federal law since 1920. If the Jones Act were the primary driver of California’s elevated fuel costs, the state’s prices would have spiked suddenly after its enactment. But they did not.
What did change — dramatically — was California’s energy policy.
California’s Long-Standing Price Premium
For more than a generation, California drivers have paid significantly more for gasoline than motorists in the rest of the country. This is not a new phenomenon tied to recent refinery outages or tanker availability. It is a structural outcome of deliberate state policy choices.
That long-standing premium is well documented. According to data from the U.S.
Energy Information Administration, California gasoline prices have exceeded the national average nearly every year for the past 30 years, often by a wide margin. In the early 2000s, California drivers routinely paid 30–50 cents more per gallon than the U.S. average. During the 2010s, that gap frequently widened to 60 cents or more, and in recent years it has at times exceeded $1 per gallon. These disparities persisted through periods of low and high oil prices, under Republican and Democratic administrations alike. The consistency of this price gap over decades makes clear that California’s higher fuel costs are not the result of episodic shipping constraints, but of durable state policy choices that isolate its fuel market and inflate costs year after year.
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California mandates a unique boutique fuel blend that is not used anywhere else in the United States. This isolates the state from national gasoline markets and makes it far more vulnerable to supply disruptions. When a refinery goes offline — as several have in recent months — California cannot easily import replacement fuel from neighboring states because that fuel does not meet California’s arbitrary regulatory specifications.
That is not a shipping problem. It is a regulatory one.
Layered on top of that are high state fuel taxes, cap-and-trade compliance costs, low-carbon fuel standards, and a regulatory environment that has discouraged refinery investment for years. California has lost multiple refineries over the past two decades, not because of federal maritime law, but because state policymakers have made clear that refining is an unwelcome industry.
Those policies have consequences — predictable ones.
The Jones Act: A Convenient but Incorrect Scapegoat
The Jones Act — a national security measure passed by Congress in 1920 — governs coastwise shipping between U.S. ports and requires that vessels be U.S.-built, U.S.-owned, and U.S.-crewed. Critics frequently blame it for higher energy costs, often without regard to context or scale.
But even critics of the Jones Act, should be honest about what it does and does not explain.
The Jones Act applies nationwide. Yet California’s fuel prices are consistently higher than those in Texas, Louisiana, Mississippi, or New Jersey — all states subject to the same law. If the Jones Act were the dominant factor, those states would experience similar price premiums. But they do not.
Moreover, California’s most efficient means of energy transportation is not marine shipping at all — it is pipelines.
Pipelines: The Forgotten Reality
Pipelines are the safest, most efficient, and lowest-cost way to transport oil and refined petroleum products. The United States operates hundreds of thousands of miles of pipelines, safely delivering energy across vast distances and directly into communities every day.
California once benefited from robust pipeline infrastructure. But environmental opposition, regulatory delays, and political hostility have made pipeline expansion effectively impossible in the state. Projects that would be approved in months elsewhere can languish for a decade in California — or be abandoned altogether.
It is therefore deeply ironic to blame maritime shipping laws for shortages that are exacerbated by the state’s own refusal to permit the most efficient transportation system available.
Temporary Disruptions vs. Permanent Policy Failures
The Fortune article conflates short-term logistical challenges with long-term structural causes. Yes, refinery outages and shipping constraints can affect prices at the margin. They always have.
But margins are not explanations.
California’s gasoline prices are higher because:
The state isolates itself with unique fuel standards.
It imposes layered regulatory and tax burdens.
It discourages refinery investment and expansion.
It blocks pipeline development.
It treats conventional energy as a transitional nuisance rather than a necessary input to modern life.
Those policies ensure fragility. And fragility ensures higher prices.
Accountability Matters
Blaming the Jones Act may be politically convenient, especially for officials who wish to avoid scrutiny of California’s own failed regulatory regime. But convenience is not accuracy.
Americans deserve an honest discussion about energy costs — one that distinguishes between federal policies that apply nationwide and state policies that uniquely burden one market. California’s gasoline prices are not an accident, and they are not imposed by Washington. They are the foreseeable result of Sacramento’s foolish choices.
Until California policymakers are willing to confront that reality, drivers will continue to pay the price — literally — while commentators look elsewhere for someone to blame.
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