Owen Klinsky
Contributor
California regulators have proposed a variety of government intrusions into the petroleum industry in order to combat future energy price surges, according to a report released Thursday by the California Energy Commission (CEC).
As the Golden State continues to pursue its green agenda, the CEC expects some of California’s nine oil refineries to be shuttered due to falling demand, which would give the remaining refineries increased pricing power and raise the possibility of a surge in gas prices, the study concluded. To solve this problem, the commission proposed a variety of government interventions, including expanded regulation on private refineries, the establishment of state-owned refineries and an increase in imports. (RELATED: Chevron Leaving California Behind After Years Of ‘Adversarial’ Dem Policies)
“The deployment of ZEVs [zero-emission vehicles] and a robust mass transit system are critical for achieving the state’s climate goals, reducing local air pollution, and eventually eliminating dependence on the volatile global petroleum markets. As demand for gasoline shrinks, refineries may close or convert to processing clean transportation fuels,” the report states. “This will lead to fewer gasoline refineries, with increased market concentration and associated market problems that often accompany it.”
To address the market concentration issue, the CEC proposed a variety of state interventions, including setting up state-owned refineries.
“The State of California would purchase and own refineries in the State to manage the supply and price of gasoline,” wrote the study’s authors, with the scope of the initiative ranging from “one refinery to all refineries in the state.”
However, the CEC appeared to question whether creating state-owned refineries to replace privately-owned refineries pushed out of business by government energy policy was counter-intuitive, asking, “as demand for fossil fuel declines, will the presence of State-owned refineries inhibit an orderly phase out of refinery capacity?”
The CEC also suggested increasing oil imports, saying, “as the transition unfolds, California may wish to consider developing a relationship with a supplier and refiner or marketer to bring CARBOB [California-specific gasoline] into California via regular ship loads so consumers are assured a reliable import supply.”
Finally, the California Energy Commission proposed new regulations, “requir[ing] refiners and terminals to maintain contingency reserves of gasoline fuel in refineries and terminals,” that they’d be required to release “during price shocks.”
California is set to ban the sale of purely gas-powered vehicles purely gas-powered passenger vehicles after 2035. However, “even under the most aggressive scenario transition to ZEVs [zero-emission vehicles], millions of petroleum fueled vehicles are anticipated to remain on California’s roads and highways beyond 2035,” the CEC study concluded. “These vehicles will need fuel to operate, and many of the vehicles may be owned by lower income individuals and families, making it even more compelling to identify ways to ensure an affordable, reliable, equitable, and safe supply.”
The study noted that “Californians already pay higher than the national average for gasoline… partially due to state and federal mandates for improved air quality.” In 2022, after energy prices surged following the onset of the Russia-Ukraine war, wholesale gasoline prices in California spiked to $6.21 per gallon, “$2.61 higher than the U.S. average.”
The California Energy Commission did not immediately respond to a request for comment.
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.
If they do this, before you know it, they’ll have Refinery Endineers working from home. Boom!!
It’s true. In the institute where I’m employed, about 80-90% are still working from home. A lot of them came to the annual picnic last month, however.
Did they have their masks on?
There’s one admin that started in March 2020. I’ve seen her like twice since then, so I don’t know how bad the situation really is. I’m pleased to say that the graduate students have largely rejected the insanity.
A few staff and faculty wear masks still, a couple even at home on Zoom calls do. If Joseph Heller were alive today, he would not lack material.
I’m not sure if anyone got the Bhopal reference. The Engineer in charge for that shift was at home having tea when the accident occurred.
Well put!
The struggle continues between socialism and free enterprise.
Socialism has never brought periods of prosperity and social happiness.
Free enterprise has never been let to run to show its full advantage.
..
I am not sure that to-and-fro on WUWT will influence the present struggle, but I will continue to try to provide encouragement and ideas for readers to adopt free enterprise.
Those promoting free enterprise in important arenas, like US politicians, need to refine their message to credible memorable bites and to emphasize them more in public statements of policy and direction.
Geoff S
I survived socialism once. The next time I may not be so lucky.
“Free enterprise has never been let to run to show its full advantage”
yes it has . For US up till the depression it was full free enterprise system
Not correct. There is no consensus among economists and historians regarding the exact causes of the Great Depression. Included in the mix are failed US monetary policies (set by government), tariffs (also by government), and an extended drought. Those elements are no part of free enterprise. The stock market crash had ties to free enterprise, but many of the rules, particularly those concerning margin trading which was largely responsible for the crash, were influence or regulated by government. Furthermore, many economists believe the depression would have been shorter and less severe had governments done nothing and let the economic imbalance reset itself on its own.
All these Ulez type schemes really say:
You can pollute – as long as you pay
Revenue generation with a green tinge
The late Rush Limbaugh used to ask the rhetorical question, “why can’t the Left just be honest?” It was not meant to be answered, we know what the answer is, it is one that sinks their agenda. Thus the need to deceive the dumber portion of the population. The real thing that CA regulators would say, if they could do so with guns pointed at our heads is — to paraphrase a situation differently out of the old Mad Max movie — “You want access to the energy you need? You talk to us.” It’s all about tyrannical control, nothing more.
Rush Limbaugh was one of the biggest liars around…it was the basis of his 3 hr show
Ummm… research? You ever heard of it?
How did it work out for Venezuela when Chavez nationalized the refineries? Really well, actually, because the daughter of Chavez, Maria Gabriela Chavez, is the richest person in Venezuela, with a net worth estimated at $4.2 billion dollars. I wonder what Kalifornia is really up to?
You don’t have to wonder. A quick check into the Brown Family Indonesian oil import connections and the Getty Family Ecuadorian oil import connections should suffice.
I’m pretty sure the Vens nationalized refineries well before Chavez.
Interesting that I’m receiving downvotes for pointing out that Venezuela nationalized its oil industry well before Chavez came onto the scene. Per Wikipedia:
‘The country officially nationalized its oil industry on 1 January 1976 at the site of Zumaque oilwell 1 (Mene Grande), and along with it came the birth of Petróleos de Venezuela S.A. (PDVSA) which is the Venezuelan state-owned petroleum company.’
You believe Wikipedia? Shame on you.
Saudi Arabia nationalised its own oil industry in 1988
Norways offshore oil/gas fields are state owned
Hows that worked out for them ?
This certainly reads like the “we’ve got to destroy the industry so we can save it” philosophy of Leftist bureaucrats. The California Department of Motor Fuel could join the California department of Motor Vehicles in order to have just one line for getting your license plates and your annual fill of gasoline for your car. Hopefully, they would allocate enough gas to leave the state.
“we’ve got to destroy the industry so we can save our philosophy”
Fixed.
Can you imagine a bunch of public servants running a refinery of an internationally traded resource like oil? What on earth are they smoking!
Witness Russia. And when the Russian bureaucrats (left-over communists) saw that the drillers were actually making money even using 40 year old technology, they tried to tax them to death.
refineries may close or convert
What, all by themselves?
Perhaps, ‘may be closed or be converted’?
You have to believe
They just need a little hydrocarbon affirming care.
Judicious applications of double-think.
Insanity begets insanity
This kind of talk is SCOTUS bait. Oil refineries are clearly part of interstate commerce and cannot be regulated out of business by any state. Similarly any attempt of a state to buy out all of the refineries would also trigger enforcement of Federal anti trust laws.
If Trump manages to win the November election, his EPA will certainly revoke California’s ban on ICVs.
California still has refineries and oil wells. I think Chevron may have already written off their refinery in California. Letting some government DEI imbeciles run a refinery will only hasten the bunrdown fo California.
It’s shocking that so few Californians protest.
Across Europe, the yellow jacket protests up until more recent farmer protests have forced regulations to be reversed.
Sacramento is pretty close to conservative majority farm areas. It only takes a few tractors to shut a city down.
Maybe the awkward squad have already left the state, knowing a sinking ship when they see one.
Chevron is leaving California and moving its operations to Texas.
And joining other companies that have done the same. All looking for safe havens from the Marxists, crime, taxes, high home prices and living expenses.
The insult “watermelon” is appropriate, as the regulators want to seize the means of production anyway.
From the Chronicles of Cloud Cuckoo Land.
The refineries will then be run by Venezuelans, generously on loan from Mr Maduro.
The opposition leader says they have proof that Maduro lost the election in Venezuela. Oppostion = 60 percent, Maduro = 30 percent.
Maduro (the Eagle) refuses to concede.
That’s what dictatorships do.
I guess nowadays a dictator doesn’t even need to be the one counting the votes to win. Now, all they have to do is assert they won, and refuse to leave the building.
Then it becomes a matter of whether the dictator sufficiently bought off the security forces that would determine if he can stay in office. If he did, then what the voters and the people think doesn’t matter. But if he didn’t pay the security forces enough, they can easily switch sides and force a coup.
Wyatt’s Torch, anyone? These jackasses can’t even operate basic infrastructure or their precious welfare programs.
I think this comment is appropriate for all the radical Democrats in California:
“Politicians are the lowest form of life on earth. Liberal Democrats are the lowest form of politicians.”
General George S. Patton
These “Liberal” Democrats in California are in the process of competely destroying their State. It’s amazing just how stupid some people can be. When put in positions of power, these stupid people become a great danger to the people they govern. That’s what is happening in California right now.
George was a native Angelino who grew up on one of the old rancheros (Merino). Wonder what he would have to say about California today.
Who does CA think they can get to import expensive-to-make gasoline into CA if CA shuts down all the refineries? Especially if CA tries to regulate the prices those importers can charge for their product?
This is why Marxism *doesn’t* works, *can’t* work, will *never* work.
As far as the Marxist fact checkers can ascertain the quote cannot be verified; it first appears in a book from 1983 without reference. Until we can say when and where the words were uttered the quote remains hearsay and suspect. That we cannot prove it wasn’t said is the worst of arguments. Call it pseudepigrapha. The giveaway? “Liberal” was not a dirty word in the 40s.
“The giveaway? “Liberal” was not a dirty word in the 40s”
That’s true. Liberal used to mean something back then, namely moderation, that it definitely doesn’t mean today, which is why I put “Liberal” in quotes.
The “Liberals” of today are socialists and marxists. They are not liberal by any stretch of the imagination. They are totalitarians who seek to control every aspect of other people’s lives.
Maxine Waters has for decades wanted to nationalize oil refineries. Maybe she could be the new refinery czar.
She once said that to the oil company heads in a committee meeting about gouging.
Which is ironic because in the article, the State desires to confiscate the refineries for the explicit purpose of manipulating and fixing the market price (thus eliminating an actual market). If the oil executives colluded and set refined product prices, there would be criminal fines and possible prison.
If it is evil when free men coöperate on setting prices, how then it is noble when corrupt and evil men do the same thing?
Because this is (D)ifferent.
This is what the dictionary defines as “socialism.”
Yes, yes – do it quickly please.
Make California Venezuela – it is what Californians have been voting for all these years.
The state of Cancer, known to cause California. – AvE
Our intrusions cause our prices to be 75% higher than the high prices caused by lesser intrusions everywhere else, so we have to go all the way? And Californians think that they are enlightened,
I don’t know the solution, but the source of the problem strongly suggests it is not self-correcting.
Chevron is moving its headquarters to Houston. They should sell their California operations to the state for a cheap price, something like discounted book value.
The one thing they should demand is a general release, a covenant not to sue, and an indemnity against future third party claims. These are ordinary commercial terms and the State should grant them.
Chevron should whistle a happy tune on the way out of town. Inmates of the peoples republic of California, it sucks to be you. Have a nice life.
Once enough businesses and wealthy people leave the state demand and prices should come down – along with wages and standard of living. But that will leave more room for millions of ‘migrants’.
Fine, but I’m not seeing fire departments and emergency services swapping out their fire engines and ambulances for LEV equivalents.
The population is filling with people who don’t understand civilized first world behavior yet they are going to expect civilized and first world services sans the fuel necessary to provide those things.
“newcomers”
Apologies to my CPA friends. Discounted book value is not a thing. I meant depreciated book value. What ever it is. The release covenant, and indemnity are the truly valuable consideration because the $h;+ storm of litigation that California will hurl at oil companies has only just begun.
When we used to retire equipment we never even tried to find “depreciated book value”. We always just used “salvage value”. For metal that was typically scrap value per pound unless the equipment had precious metal in it (e.g. gold plated connectors).
Walter Sobchak: ” ….. The release covenant, and indemnity are the truly valuable consideration because the $h;+ storm of litigation that California will hurl at oil companies has only just begun.”
Walter, could you please elaborate upon this comment. What forms of litigation are you expecting California to pursue against the oil companies in the next several years?
Lawsuits involving new and/or expanded environmental compliance regulations? Reparation lawsuits for recovery of alleged harm to the earth’s climate?
All of the above and quite a few more that no sane person would imagine.
I would like to see them sell all their properties to the Chinese see what happens. A lot of west coast politicians seem to prefer China.
Sure, because California has such a fine record of efficient governance.
Those who advocate statist solutions are truly clueless.
It’s called Commiefornia for a reason.
Because its a one party state.
I’d sell all the refineries and oil and gas properties to the California government, while telling them our remaining fossil fuel properties are 100% committed to the rest of the US. Then Newsom could shut down whatever they wanted … and suffer the consequences.
Within 10 years I’d be buying back at a firesale price all the refineries and oil/gas properties in California that the government screwed up (as in Venezuela).
California needs to be MADDE accountable. Progressive liberal neoMarxists need to be MADE accountable, because they will never do it themselves.
Next time we’ll do it right.
Douglas Proctor: ” ….. Within 10 years I’d be buying back at a firesale price all the refineries and oil/gas properties in California that the government screwed up (as in Venezuela).”
After all those refineries burn to the ground as a direct consequence of unsafe operational practices and sloppy or deferred system maintenance, there won’t be anything of value left to buy back.
So they impose regulations that drive up prices and drive out industry, all in the name of climate change, and their solution is to import more, at of course a much higher carbon footprint and price? Not sure which is more stunning, their lack of economics knowledge or their lack of self awareness.
In May, 2022, Gov. Gavin Newsom bragged of having a $97.5 billion surplus to expand health care, social equity and educational programs for the 2022-2023 budget year.
Proof?
https://calmatters.org/politics/2022/05/newsom-budget-spending/
In February 2024, the California Legislative Analyst’s Office projected a budget deficit of 73 billion dollars.
Proof?
https://lao.ca.gov/Publications/Report/4850
That’s a total of 170,500,000,000 spent in 2 years. Somebody is getting a lot of cash.
Some of those getting a lot of cash are those who are keeping it by exiting with both their wealth and income that paid a vast majority of those progressive taxes.
Chuckle, chuckle, boom!!!
States that figure to end fossil fuel use should not be allowed to import fossil fuels into their state in any form. They need to be forced to do without period, the sooner the better.
I don’t know how they intend to import those refined products with electric semitrucks that don’t exist.