Guest “You can’t fix stupid” by David Middleton
I couldn’t make this sort of schist up, even if I was trying…
Governor Newsom Signs Gas Price Gouging Law: “California Took on Big Oil and Won”
Published: Mar 28, 2023
WHAT YOU NEED TO KNOW: Following record gas price hikes and profits, Governor Newsom signed his special session bill to hold Big Oil accountable – the latest measure the Governor has taken to rein in the industry.
SACRAMENTO – Today, surrounded by legislators and community leaders in the rotunda of the California State Capitol, Governor Gavin Newsom signed legislation to implement the strongest state-level oversight and accountability measures on Big Oil in the nation – bringing transparency to California’s oil and gas industry, shining new light on the corporations that have for decades operated in the shadows while ripping families off and raking in record profits.
It is the latest instance in which the Governor has successfully taken on the historically powerful industry for putting profits over people. Last year, Governor Newsom signed legislation adding new reporting requirements to oil refiners, as well as a law protecting neighborhoods and schools from oil drilling.
[…]Read more nonsense here: Office of Governor Gavin Newsom
Before vilifying “Big Oil”, maybe Governor Newsom could have checked with AAA…
Are ExxonMobil, Chevron and the rest of “Big Oil” foregoing profits in Texas, Oklahoma, Louisiana, Kansas, Missouri, Arkansas, Mississippi, Alabama & Tennessee so that they can gouge the Peoples Republic of California? Brings on a whole new meaning of Red States vs Blue States.
There’s nothing new about West Coast gas prices being higher than the rest of these United(ish) States… Note the date of the following article:
West Coast Gas Prices Worst in Nation
By ABC News
W A S H I N G T O N, April 25, 2001 — Drivers on the West Coast pay more at the pump year after year than in anywhere else in the country. There are a multitude of reasons for the region’s sky-high gas prices, but no simple solutions.
Why the discrepancy?
“California is the third-largest gasoline consumer in the world — behind only the rest of the United States and Japan,” Jim Wells, director of the GAO’s Natural Resources and Environment division, told a Senate subcommittee.
Refineries in California operate at near full capacity in an effort to meet the high demand for gas in the state, but California also supplies fuel to Western states such as Oregon — which doesn’t have a single refinery of its own — Arizona and Nevada. And high demand makes for high prices.
Without a single oil pipeline cutting across the Rocky Mountains, the West Coast is virtually cut off from the rest of the nation’s supply of gas supply, making the region extremely susceptible to sudden gas shortages and the steep price increases they can cause.
“The West Coast gasoline market is isolated from out-of-state sources of gasoline so that supply shortages cannot be easily replaced,” said Wells, noting that shipping gas in from out of state on tanker trucks is a slow and very costly undertaking.
‘Cleaner’ Gas and Higher Taxes
Another major part of the price problem may be of California’s own making: The state uses its own special kind of gasoline.
Over the last two decades, nearly half of California’s refineries have closed. And no new refineries have been built in California or anywhere else in the United States since the 1970s.
The oil industry blames the lack of new refineries on stringent government regulations and strong opposition from local communities.
What’s changed since 2001? Not much.
Through the expansion of existing refineries, the total U.S. refining capacity has increased by about 1.4 million barrels per day (bbl/d) since 2001.
However, West Coast (PADD 5) capacity has actually decreased by about 500,000 bbl/d and all of the gasoline consumed in California is refined in PADD 5.
In 2001, California (714 mbbl/d) produced almost as much crude oil as Texas (1,162 mbbl/d). Since then, California production has plummeted to 335 mbbl/d, while Texas has edged (/sarc) up to 5,043 mbbl/d (Can you say “Permian Basin”?).
“Without a single oil pipeline cutting across the Rocky Mountains…”
California has one of the highest gasoline taxes in the nation… $0.8655/gal (including Federal taxes). In Texas, the all-in tax is only $0.384/gal.
There’s also California’s unique, planet-saving, blend of gasoline… Governor Newsom could have just checked with the California Energy Commission.
What Drives California’s Gasoline Prices?
Gasoline price changes in California are primarily driven by the cost of global crude oil and significant unplanned refinery outages. Currently, Russia’s invasion of Ukraine is causing crude oil prices to increase and remain volatile. Gasoline prices are highly sensitive, so any shift in supply and demand changes what you pay at the pump.
Filling up the tank in California also costs more since gasoline prices are higher on average than the rest of the United States for a few reasons. These reasons include the isolated nature of the state’s transportation fuels market, a special gasoline recipe that reduces air pollution, environmental program costs, and taxes.
An Isolated Market
California’s transportation fuels market is isolated, meaning that gasoline purchased in California is also refined in the state. Oil refineries and fuel distribution centers are isolated by time and distance from alternative sources to resupply during unplanned refinery outages. Price spikes can last longer for Californians because costs are higher, and the resupply time is longer.
[…]California Energy Commission
“An isolated market,” dependent on imported foreign crude oil and a handful of aging refineries, operating in the most industry-hostile environment imaginable. So, yes, when a refinery has to go offline in California, it’s a big fracking deal for Californians. Earth to Gov. Newsom: All refineries have to occasionally go offline.
Even if he’s too lazy and/or stupid to read the article, he could have looked at the pictures.
Abundant resources, abundantly stupid politicians
Foreign suppliers provide almost half of the crude oil refined in California.
California has about 4% of the nation’s total crude oil reserves, and it is the seventh-largest crude oil producer among the states.86,87 Reservoirs along California’s Pacific Coast, including in the Los Angeles basin, and those in the state’s Central Valley contain major crude oil reserves. The most prolific crude oil-producing area in the state is the San Joaquin basin in the southern half of California’s Central Valley.88,89 Although California’s crude oil production declined steadily since 1985, the state produced almost 131 million barrels of crude oil in 2021.90
Assessments of California’s offshore areas indicate the potential for large, undiscovered recoverable crude oil resources in the federally administered Outer Continental Shelf (OCS).91 Concerns about the risks of offshore crude oil and natural gas development after the 1969 Santa Barbara oil spill resulted in a permanent moratorium on offshore oil and natural gas leasing in state waters.92 Congress imposed a federal moratorium on oil and natural gas leasing in California federal waters in 1982. The federal moratorium expired in 2008.93 However, no California offshore federal lease sales have occurred since then and President Biden signed an executive order in January 2021 that suspends new oil and natural gas leasing on federal public lands and offshore waters.94,95 There are 22 older crude oil and natural gas production platforms that remain active in federal waters and 11 in state waters off the coast of California.96,97
California has about one-tenth of the nation’s total crude oil refining capacity and ranks third after Texas and Louisiana.98 A network of pipelines connects California crude oil production to the state’s 14 operable refineries, which are located primarily in the Los Angeles area, the San Francisco Bay area, and the San Joaquin Valley.99,100 California refiners also process large volumes of foreign and Alaskan crude oil. As crude oil production in California and Alaska declined, the state’s refineries increased their supply from foreign imports.101,102 Led by Ecuador, Saudi Arabia, Iraq, and Colombia, foreign suppliers provided almost half of the crude oil refined in California in 2020.103,104
California requires that all motorists use, at a minimum, a specific blend of motor gasoline called CaRFG (California Reformulated Gasoline) as part of an overall program to reduce emissions from motor vehicles. California refineries produce cleaner fuels in order to meet state environmental regulations.105 Refineries in the state often operate at or near maximum capacity because of the high demand for those petroleum products and the lack of interstate pipelines that can deliver them into the state. When unplanned refinery outages occur, the lack of CaRFG deliveries available by interstate pipelines means replacement supplies of CaRFG come in by marine tanker from out-of-state U.S. refineries or from other countries. It can take several weeks to find and bring replacement motor gasoline from overseas that meets California’s unique specifications.106
California is the nation’s second-largest consumer of refined petroleum products, after Texas, and accounts for about 9% of U.S. total consumption.107 In 2020, California was the nation’s largest consumer of jet fuel and the second-largest consumer of motor gasoline, after Texas.108,109 The transportation sector uses about 85% of the petroleum consumed in the state. The industrial sector accounts for about 12% of state petroleum use. The commercial sector consumes about 2%, and the residential sector uses less than 1%.110 Only about 1 in 30 California households heat with petroleum products, and most of those use hydrocarbon gas liquids (HGL) such as propane.111EIA
- California has abundant oil & gas resource potential, both onshore and offshore. Politicians like Governor Newsom aggressively try to prevent the exploitation of those resources.
- California requires a very specific blend of gasoline which must be refined within the state. Politicians like Governor Newsom are openly hostile to the companies that operate those refineries.
- California is the second largest consumer of gasoline in the world’s #1 oil producing nation. Politicians like Governor Newsom have created an environment in which the largest state in world’s #1 oil producing nation has to import 56% of its crude oil from foreign nations.
California Took on Big Oil and Won” – California blames “Big Oil” and passes more nuisance legislation, which will do nothing more than cost California consumers more money.
Governor Nuisance… “Here’s your sign”
Featured Image Source
Gavin Newsom Named U-Haul Salesperson Of The Year
U.S.·Sep 15, 2021 · BabylonBee.com
SACRAMENTO, CA – U-Haul has named Governor Gavin Newsom its Salesperson of the Year for the third year in a row after a record-setting sales quarter.
“We are astounded by the growth we’ve seen in California,” said U-Haul’s Western Regional Director Fennick Buggstein. “Thanks to Gavin Newsom, literally every middle-class family has moved out of the state! It’s been impossible to keep up with demand! Also, most of our workers left the state too, which kind of stinks.”
[…]The Babylon Bee
““California Took on Big Oil and Won””
It’s a somewhat Pyhrric victory, no?
“Over 500,000 people left California in two years: report”
That’s a lot of people and – assuming they were employed – quite a lot of taxes etc.
“There were 153 companies that relocated headquarters in 2021, more than double the 75 that left in 2020 and more than triple the 46 that exited in 2018, according to a recent report from the Hoover Institution at Stanford University. “
That’s a lot of companies and quite a lot of taxes, business rates, licences etc.
I read that in the fiscal year of 2021, California’s state debt stood at about 143.73 billion U.S. dollars.
Although he hasn’t, to my knowledge, stated it, what seems uppermost in Gov Newsom’s mind is the depopulation and impoverishment of California.
Impoverishment and depopulation in California? Otherwise known as gentrification on a statewide level. California has been anti-development for decades but environmental and climate laws are finally showing significant results.
I know it seems absurd that the state which collects more than a dollar a gallon is taxes and emission fees for each gallon of fossil fuel sold gets upset when a supply shock raises prices by another dollar for a few weeks, a couple of times a year. But these fuel and electricity prices subsidized wealthy electric car buyers and homeowners with solar panels on their roofs. More than half the state’s citizens can only afford to rent.
California only makes sense when you abandon the idea that the state wants to help its working class.
no government can help its working class when it demonizes businesses
“shining new light on the corporations that have for decades operated in the shadows while ripping families off and raking in record profits”
Across much of America, environMENTALists have demonized the forest industries- saying all we think of is how to maximize profits by raping forests- so they try to stop tree cutting- while enjoying their wood homes, wood furniture, and paper products.
The working class?
They are the bete noire of the post-modern middle classes. Racist, sexist, homophobic…. ad nauseam.
Depopulation for certain, it’s the only way to decrease the state’s Carbon Footprint
California would be a great state based on the physical setting and resources, except it is infested with Californians (Willis et al excepted). However, Kalifornia may have to take a back seat to Illinois for the dysfunctional crown, as Chicago just elected a mayor to the left of Lori Lightfoot. Wow!
The mainstream news media won’t tell you this about the Chicago election for mayor. It was a racial vote.
40% of Chicagoans are black and 60% are white. Only one third of the eligible voters voted in the election. (I guess 2/3rd of the voters don’t care enough to vote.) The blacks as always voted as a single solid block for an unqualified candidate simply because he was black. And their black only social programs as usual made sure that black people voted with a large turn out. Meanwhile the white population didn’t show up at the polls. Despite that the raw numbers were pretty close. But so long as blacks vote as a single block for any candidate with a black skin regardless of how unqualified (This guy had $3,000 in overdue unpaid water bills that he owed the city!!!) and so long as whites don’t bother to vote Chicago keeps getting dismal choices. And the cowardly news media won’t report what is really going on. The whites mustn’t offend the blacks by reporting accurately.
Left of Leftfoot…I wouldn’t think that possible
“assuming they were employed”
An excellent assumption. Homeless people don’t leave California; they move there.
““Over 500,000 people left California in two years:”
Climate Change Agenda refugees !
I just bought gasoline at $2.99/gallon in Greenfield, Woke-achusetts. Not typical of course- more like $3.30-3.40 most places.
It’s £6.60 per gallon here ie over $7 or $8
There’s some goddam decimal points in there, I get brane ake.
At $3.30 per US gallon, I get 87 US cents per litreIs UK petrol now about 150 UK pence per litre?And it takes, currently, 80 UK pence to buy one US dollarThus I get, to buy one litre in the US using UK pence= 69.7 pence
Compared to UK price per litre of 150 UK pence = 187 US cents
The Real Stinker here in the UK is the retail price of diesel.
Seemingly it’s the same price as petrol on international wholesale y- et UK retailers are still charging between 20 and 30 pence more for diesel than petrol..
And they’ve cheerfully doubled the price of Diesel Exhaust Fluid (AdBlue) sometime in the last 12 months
There is a delta of about $0.70 per (US) gallon between gas and diesel in the US.
Last time I was in London I was told the reason fuel prices were
so high is that the tax is how the health care was funded, but that farmers
got their fuel without that healthcare cost added. Is that true?
Farm (off road) diesel does not carry road taxes. Typically it is dyed so that authorities can tell if on road haulers are using it illegally. They take a fuel sample from a tank for inspection for inspection at weigh stations, etc.
They have ‘red diesel’
Pikers, I paid $1.79 CAD per litre yesterday here on Vancouver Island, that’s just short of $10 USD per US gallon
Not sure why so cheap here in Woke-achusetts- far, far from the oil fields.
Spent a few weeks in US recently travelling from New Orleans crossing briefly into California before finishing in Las Vegas. Cheapest gas was in Louisiana – just under $3. Most expensive was $6-19 near Needles on California/Arizona border. I filled up a mile from the State line at Arizona village at $3-19 !!! GasBuddy is a great tool on travels. Unfortunately I had to top up in death valley with enough to get me to Pahrump on the other side. Californians are mad to put up with it.
What’s in your wallet (portfolio)?
U-Haul Holding Company (UHAL) Stock Price, News, Quote & History – Yahoo Finance
Thought that was going to be a Capitol One ad
This article missed the biggest reason why California has expensive gasoline: the CARB (California Air Resources Board).
CARB is the one forcing a different blend of gasoline in CA than other states. This blend is why California refineries have a monopoly on gasoline production in CA, and why crossing the border from California generates an immediate price drop.
CARB also increases the price of cars sold in CA – all car makers selling in California are mandated to have a percentage of EV/alternative fuel vehicle sales; if they don’t, they have to buy credits from Tesla. This amounts to hundreds of millions a year.
The gas tax business is nonsense – gas taxes are a percentage of gas sales; start with a higher gas price due to CARB blend mandtes and of course you end up with higher gas taxes.
CARB should be sued by class action groups from across the country for the damage done by them.
Not only does it bring a price drop but also an almost 30% boost in efficiency (mileage MPG)
2008 Dodge Charger up I-5
Ca gas 22mpg
Or gas 34mpg
Agreed I noticed that years ago when I could buy alcohol free gas that my engine really liked it.
“taken on the historically powerful industry for putting profits over people”
What’s up with these vacuous pontification phrases “putting blah over bluh”?
I see these more and more.
Yes, ignorance of the California tax base (capital gains tax) is no excuse…
CA State Budget and Revenue Volatility- Final_032823.pdf (hoover.org)
Unless it is couched in impenetrable bureaucratese, I didn’t note one word about controlling out-of-control Leftist spending. Maybe their repeated references to spending “transparency” is Leftist code for cutting budgets.
Leftists don’t think, they feel.
Any company that doesn’t put profits first, will soon be going out of business, unless they are being subsidized by government.
When a company goes out of business, nobody gets a wage, nobody gets the supplies they need.
Only a Marxist could come up with something as stupid as “profits over people”.
There is something about politicians naming bills:
And the headfakes carry over into common political usage.
Orwellian would be an understatement… 😉
Antifa(schist) = Procom(munist)
It comes from Leftists’ use of ‘1984’ as a handbook, not a cautionary tale.
Remember flatten the curve 🙂
The vicious circle of Democrat- and Newsom-lead policies, raising prices of petroleum into the stratosphere, blaming the oil companies for the results of those policies, taxing the outcome, thus raising prices higher, blaming the petroleum industry more, then laughing all the way to the bank with the proceeds of all those new taxes while most of California remains blind.
The ultimate winner? Gavin and the Democrats with even more tax revenues to spend and squander.
I’ve been reading the same commentary for decades, and the CA economy is still a big economic success.
Someone might respond No, the CA economy is NOT still a big economic success.
But here we are talking about it.
Taxes are not the only cost that the California government has piled on the consumer. The cost to build a gas station is on par with the cost of building a gold-plated palace. Labor costs to staff the gas station are higher than found in other states. Regulations the gas stations have to follow are swamping their efforts to supply gas to the everyday consumer. All these added costs are passed onto the consumer.
The goal of the socialists is to use government to cause the free market to collapse from the weight of their taxes and regulations. Then they will step and declare that the free market doesn’t work, and only government ownership and control will save the people.
Is it theoretically possible for the free market to outgrow government? My first thought is that government (Treasury) is allowed to create money, allowing it to choose any size as measured in currency. Are there other ways for government to outgrow the free market in an exponential growth, high tech scenario?
It’s possible for government to grow faster than the market. It just isn’t sustainable.
This is a historical step to target all carbon fuels: meats, vegetables, grains, etc. Net Zero carbon dioxide emissions. Abort.
Keep in mind that the Philips 66 Rodeo Refinery and the Marathon Martinez Refinery are both shut down and under conversion to process Fats, Oils, & Greases (FOG) into renewable diesel (RD) which is favored by CARB. The Rodeo Refinery was 120,000 bbl/day capacity and the Martinez refinery was 161,000 bbl/. These refineries are now producing maybe 9000 bbl/day of RD from FOG at great expense. But RD gets Low Carbon Fuel Standard Credits in CA which help offset the cost but is passed on to the consumer as higher cost of fuel. This is never mentioned as a cost that must be borne by the consumer.
Three states “own” national access to a hemisphere. Would USA work better if CA were split to East-coast sized states like Maine to Florida?
On the other hand, I wouldn’t mind combining New Hampshire, Vermont, Massachusetts and Rhode Island into a single state.
At what point to the oil companies say “screw it, we’re out”?
I’ve been waiting to see that for a long time now. I’m wondering if they have such a point…
Why would taxation in such a large region affect commodity vendors? People who sneak over state lines would find the same vendors competing on price with the same other vendors.
Its because it is ultimately consumers who pay the bills imposed by Leftist governments, not the oil companies. Contrary to the tenets of socialism, there is no free lunch. But voters like to be told that by politicians of all stripes.
California imports over 50% of its crude oil from overseas sources priced at global market rates. Domestic markets also respond to global supply/demand. Leftist government action only distorts markets, leading to higher overall costs to consumers.
The “pipeline” map shows a dead-end spur ending in central Washington State (at Moses Lake, from Montana).
That’s where my gasoline comes from after a 70 mile trip in a truck.
Low price gas in the area has been $3.89 for a week. (with card)
When the 70-mile trip is by a (not-mandated) EV, then we know EV is economical.
Why are the Oil Companies not going after Newson and his direct family (and his ilk) for vilifying oil? I would bet my last penny that ‘our Gavin and family’ are using on a regular basis, directly or indirectly, oil or oil based products! Show them up as hypocrites!
Don’t forget to factor in that California gasoline has 12-15% less energy content than the formulations in other states.
BIG OIL! I guess I missed the little wells and refineries along the highway on my cross-country motorcycle trip. Uncle Maynard and Auntie Hilda had a nice boutique refinery in central Wisconsin but there turned out to be more money in ginseng. Yes, Little Oil, something like tapping maples for sap and cooking it down into syrup. Almost anyone could do it.
There is a simple solution to this insanity. Cut off California’s foreign oil supply. We know we can do it, covid set the precedent.
To punish who?
Not to punish anyone, rather to show the stupidity of California leaders. If it is not a good idea for California to access their own resources why is it a good idea for California to benefit from others doing their job for them?
Commuters and homeowners need reparations from policy enslavement at this point.
see charts of electricity prices and gasoline prices in major metro areas of California
Charts of salary?
Newscum must really think he has some kind of special sway that no other politician has ever had before. The kind of sway (assuming it even existed) that would compel businesses to eat taxes, fees, levies, etc, placed on them and NOT pass those onto consumers!
Whenever the gov’t sticks it to a business, they always end up sticking it to the end user.
He survived a recall election so yes, he is pretty cocky about the people backing him. Soon he will be left with only his voters that of people on the dole. Be interesting to see the government send the people money then tax it back so they can repeat the cycle. I guess they never heard that a perpetual machine is impossible.
govt is the driver of almost all inflation. inflation is the friction in the govt attempt at a perpetual motion machine.
Price controls. You know, somewhere in a state that large there’s a guy from Venez…
How long can EV carmakers like Ford last losing $3billion a year subsidising them?
Lithium Prices Continue Slide Amid Declining EV Demand | Watch (msn.com)
OTOH how long can they last producing ICE cars with the lefties in charge?
2500 dealers bankrupt in China as industry on the brink of collapse – YouTube
Very timely that Oz got out of taxpayer subsidised carmaking a few years ago.
Indians no doubt thank Californians for helping put downward pressure on their coal prices and electricity-
India’s power output grows at fastest pace in 33 years, fuelled by coal (msn.com)
Are farmers who produce eggs “putting profits over people”.
That phrase makes as much sense as “You can’t hug a child with nuclear arms” but it is a great soundbite.