Fuel and Food California’s Crossroads – Regulatory over reach hits home hard.

Energy Policies Impact Agriculture and Consumers Hard

This was a fun discussion about the serious issue of gasoline, diesel, and fertilizer price increases for farmers, ranchers, and consumers in California. Make no mistake, the actions taken by the Newsom administration have driven consumer prices to some of the highest in the United States. Gavin has taken California from almost energy independent to total dependence on imports.

We have Mike Ariza, a downstream expert, who has been on the podcast several times. A great resource for boots-on-the-ground information on the California downstream market. Connect with Mike on his X account. @MikeAriza4531

Also, we had Joseph Huitt, who is with the Bordin-Huitt California Almond Ranch. Check out their family products for honey and specialty almonds at

https://bhalmondranch.com/

1. California’s Energy Crisis & Fuel Dependency

Mike Ariza, an energy expert, explains that California has become dangerously dependent on fuel imports (40% dependent). Two major refineries were converted to renewable diesel in 2023, taking 350,000 barrels of crude oil processing offline. This resulted in no gasoline or jet fuel production from those facilities. The Iranian conflict further disrupted supply chains, cutting off jet fuel, diesel, and gasoline shipments from Asian refineries. President Trump’s waiver of the Jones Act allowed fuel from Gulf Coast refineries to reach California, preventing potential $10+ gasoline prices and shortages.

2. Agricultural Challenges & Rising Costs

Joseph from Borden Hewitt Ranch discusses the severe economic pressures on family farms:

Red Diesel prices skyrocketed from $3.17/gallon in February to $4.79-$6.60/gallon by March
Fertilizer costs doubled from $300-$500/acre to $400-$700/acre due to Strait of Hormones closure
Almond prices have remained below the $2/pound break-even point for five years
Payment delays: Farmers receive paychecks every 3-4 months, not weekly, creating cash flow challenges

3. Water Rights & Agricultural Restrictions

Joseph describes severe water restrictions in California’s San Joaquin Valley, where farmers are prohibited from irrigating during peak heat seasons (June-July) despite canals being full. Banks only finance half the land value due to water limitations, effectively halving farm viability.

4. Regulatory Overreach & Equipment Restrictions

EPA regulations prevent farmers from repairing their own equipment without manufacturer access
A diesel mechanic was jailed for helping farmers and truckers repair engines
Software restrictions: Farmers can’t access tractor software updates, limiting their ability to fix equipment independently
Tuning restrictions: Rice farmers need extra horsepower to navigate clay fields but face penalties if caught modifying engines

5. GMO Seeds & Agricultural Contracts

Discussion about restrictive seed contracts where farmers must purchase new seeds annually and cannot replant saved seeds from previous years, creating ongoing dependency on seed companies.

6. State Taxes & Economic Burden

Multiple taxes burden California farmers:

Cap and Invest (called “Theft and Invest”)
Road taxes
37 cents for bullet train funding
80 cents for other state initiatives These taxes are passed directly to consumers through higher food prices.

7. Food Supply Chain Vulnerability

If California loses refinery capacity, diesel shortages would collapse logistics, resulting in:

Only 3-5 days of food supply in metropolitan areas
Port of Los Angeles unable to operate
Food distribution across the entire country disrupted (LA is the largest food importer during winter)

8. Family Farm Viability & Future Generations

Joseph, at 25 years old, represents the challenge facing young farmers. While passionate about farming, he’s pursuing a master’s degree in biological science (studying avian influenza) because farming alone cannot support a family. His mother advised all children to pursue other careers while farming as a side activity—a common reality for modern family farms.

Overall Theme: The podcast highlights how interconnected energy, agriculture, and regulatory policy are in California, and how state policies are making it increasingly impossible for family farms to survive while threatening regional and national food security.

Hat tip to the Great John Rich for being named the Special Envoy to Farmers for the USDA. We have reached out to him to see about getting him on the podcast.

Watch this video on YouTube.

“ Cap and Invest is the biggest one and I now call that Theft and Invest. “

Mike Ariza, Downstream Energy Expert

“ California should be producing its own fuel. We know that, okay? California should we produce in its own field to the point where we are exporting fuel from here to countries like New Zealand and sending Hawaii. “

Mike Ariza, Downstream Energy Expert

“ there’s no way that you can, especially with the fuel prices and the fertilizer prices, “

Joseph Huitt, Bordin-Huitt California Almond Ranch

https://bhalmondranch.com/

Also, make no mistake: President Trump’s Administration’s pause of the Jones Act helped solve the crisis in California. We are not out of the woods yet, but he bought time.

Below is just one aspect of the US Mainland shipments to Puerto Rico – we shipped out more in two months than in twenty years. The Jones Act makes sense only if you have enough ships flagged under the United States. So, which came first, the new tankers or the shipyards? This is why Californians have not hit tank bottom yet.