Accusations fly over volatile CA gas prices

gas pumpIn an unusual exercise of power, California lawmakers in the state Senate launched a preliminary probe into the recent spike in Golden State gas prices. Although the numbers have dipped back down, and a big refinery explosion last month sidelined some production, concern has mounted that other factors were involved in the upward tick.

The probe complicated an already politically charged environment surrounding California gasoline. Cap-and-trade rules were applied this year that extended taxation to gas. Meanwhile, criticism has mounted over the cost and availability of the special blend of gas required by law in California.

Exploring collusion

Although the push toward alternative fuels could have contributed to the spike, Senate Democrats have focused the legislative probe on a much different idea: industry price-fixing. “Sen. Ben Hueso, D-San Diego, chaired the hearing and returned several times to one suspicion: that the tiny pool of refiners responsible for producing California’s unique fuel blends may be colluding to keep prices artificially high,” the Los Angeles Times reported. “Do we have monopolies on fuel in California?” he asked. “We want to know if we don’t have a competitive-enough market to keep prices low.”

The line of inquiry could hit an unusual political sweet spot. Though Republicans have long sought to shield the energy industry from environmentalists’ sweeping regulatory objectives, California conservatives and libertarians have also maintained a strong pro-car and pro-consumer stance. The state gas industry would be left with few allies amid any price-fixing scandal that took advantage of California’s limited supply of special-blend gas.

The cleaner-burning fuel, mandated during an environmentalist push in the 1990s, has never been available outside California itself, creating serious supply problems in the event of an interruption or crisis. “We are one of 17 states using reformulated gas,” the San Jose Mercury News explained, “and about 30 percent of gas sold in the U.S. is reformulated. The problem is that there isn’t a single blend required, or otherwise California could use other states’ fuel when it’s running low, and vice versa.”

An environmental agenda

Tom Steyer

Tom Steyer

But Democrats have a bigger political interest in hitting up energy companies for money than they do keeping gas prices low. Party heavyweight and environmentalist donor Tom Steyer recently threw his support behind the probe. But as the Sacramento Bee reported, it has remained “unclear whether Steyer and his allies will get the answers they want. Political pressure from Sacramento over the years has resulted in few changes, and Democrats will not say whether they plan follow-up hearings or legislation in response to the latest price increases.”

Drawing cap-and-trade revenue from the gas industry has been seen as essential to distributing costs away from consumers alone. Although they’ll still pay at the pump, their driving habits have proven more responsive to policy nudges than their home energy use, where regulations and incentives have been seen as more invasive and unwelcome.

Republican countermeasures

In hopes of seizing the moment to revisit a key issue, Republican lawmakers have chosen to reintroduce their effort to roll back the cap-and-trade extension to gasoline, backing a proposal introduced by Assemblyman Jim Patterson, R-Fresno. Democrats were divided last year over the extension.

“With oil companies and the nonpartisan Legislative Analyst’s Office warning of a spike in gas prices, a group of Democrats last year sent a letter to the California Air Resources Board urging a delay,” the Bee noted. “While a bill doing so never got a hearing, the industry bankrolled advertisements during the election slamming candidates who support cap-and-trade.”

But the new Republican measure would go beyond what moderate Democrats had supported last year, leaving its fate, for now, still very much in question.

13 comments

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  1. Dork
    Dork 9 April, 2015, 06:27

    What a joke, the reason gas is so expensive is laid out right up front:
    Cap-and-trade rules were applied this year that extended taxation to gas
    and here:
    the tiny pool of refiners responsible for producing California’s unique fuel blends.
    These people are literally insane, they are the primary reason for this. More laws, more regulations, more taxes and that ought to bring down the price of gas.

    California Stupid.

    As soon as I cross the border to go to my home in Arizona, Gas is $1 cheaper.

    Reply this comment
    • Sean
      Sean 9 April, 2015, 06:34

      The legislature is not stupid. They hope the citizens of California are. They are simply going on the offensive to divert attention from where the problems really lie.

      Reply this comment
  2. Richard Rider
    Richard Rider 9 April, 2015, 08:18

    Implicit in Democrat thinking is that, for reasons no one can explain, California oil executives are much more greedy than the oil executives in the other 49 states. If they weren’t so greedy, they’d charge less, as do oil companies in the other states.

    Similar “reasoning” is used to explain high housing prices, utility prices, workers comp costs and any other higher CA expense that in reality is a product of government policies — not “corporate greed.”

    Reply this comment
  3. robbberttt
    robbberttt 9 April, 2015, 12:59

    The spike in gas is totally a cap and trade hike. We face a terrible increase in transportation cost as CARB ruins the small trucking companies. The plan is to make the larger companies join in the destruction thinking they will monopolize. But they are only sealing their own fate as well. Go to Stand and Fight clube inc. com for information.

    Reply this comment
    • Mr. Responsible
      Mr. Responsible 9 April, 2015, 17:11

      As always in dealing with the legislature, and agencies involved with CA fuel supply, FOLLOW THE MONEY.
      Fuel sales tax is based on RETAIL costs, on top of Fed & State Excise Taxes.(By gallon, not cost) No incentive to look into this, as prices drop, less money into the kitty. Higher prices mean higher tax revenue. On one of the blends, user mileage is less per gallon, 10%, thus one purchases more fuel, and more tax generation. “Conflict city” on this one, as less MPG, means more purchases and more pollutants in the air. Can you say GREEN HYPOCRIT over and over …………. But don’t feel too bad. In this state, the POOR Off Highway Vehicle community has been getting the shaft since 2011, with a TAKE in place, which is intercepting $10,000,000.00 (Million) per year off the top. A TAKE means, gone, nada, not a loan, just take the money…………………
      Works out to a $833,000 per month slush fund for Legislature to use as they see fit……….
      Don’t believe me? Call OHV at State Parks. They will verify……

      Reply this comment
  4. desmond
    desmond 9 April, 2015, 18:09

    Why don t they investigate the big drop.last year? That is not in the playbook.

    Reply this comment
  5. bob
    bob 9 April, 2015, 19:20

    Darrel Stinkbug has made it clear he wants energy prices high to hurt the little people. He said he wants the little people to feel a sting when they buy gas.

    Working people who vote for DemoNcrats are idiots. It’s like chickens voting for Colonel Sanders.

    Reply this comment
  6. Hondo
    Hondo 9 April, 2015, 20:03

    These gas taxes don’t hurt the millionaires. Gas is such a small part of their income. It doesn’t hurt the welfare folks. They only have to drive to the store and to the welfare office. These gas taxes are a kick in the nuts to small businesses, lower middle class workers and the poor working class, the very people the dems say they speak for. But if the poor working class continue to vote for the dems, they get what they deserve.
    Hondo……

    Reply this comment
  7. NTHEOC
    NTHEOC 9 April, 2015, 21:26

    Oh stop complaining, if people don’t like it then move closer to where you work! Use more public transportation. Gas prices can jump to $5 or $6 a gallon and we will still see huge sales in large suv’s ,trucks and luxury sports cars. You got to pay to live in the golden state!!

    Reply this comment
    • SeeSaw
      SeeSaw 10 April, 2015, 21:52

      Amen. I spent 40 years at my municipal employer–one and one-half mile from my house.

      Reply this comment
  8. desmond
    desmond 11 April, 2015, 04:33

    Found.
    Seesaw is actually Gertrud-Schotz Klink. She is alive in California.

    Reply this comment
  9. Tickedpapa
    Tickedpapa 17 April, 2015, 17:01

    I read all of the posts about citizens of California being upset with the existing government. Well, lest change it We the people are much stronger than any union or politician. Need an organization by the people for the people to fight all this crap. Try the ccpof/usa for example. An organization that is coming on soon and will take on the politicians in their offices and stop this crap of taxing and taxing and taxing and giving us a bunch of crap all the time and giving the taxpayer nothing in return except more taxes.

    Reply this comment

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