Big Oil Gives CA Energy Commission and Californians The Finger

Governor Brown appointed the California Energy Commission (CEC) Petroleum Market Advisory (PMAC) to look into potential market manipulation by oil refiners in the state.
 
That's going to be hard to do now that the trade association for oil refiners, the Western States Petroleum Association, is telling the CEC and PMAC it won't participate in any discussions about supply disruptions or gas price spikes. In other words, FU.
 
My favorite line from the threatening letter from the oil industry's attorneys, also warning against disclosing oil industry data: "WSPA has no specific information about supply chain disruptions or pricing behavior unique to specific members or market participants." If the oil industry doesn't know about gasoline supplies and prices, who does?
 
As Consumer Watchdog wrote to the Governor and Senate pro Tem Kevin de León today, this is the second time that the oil refiners and their trade association refused to discuss unprecedented gasoline price spikes in California with the government body investigating them.  Oil refiners individually have refused to appear.
 
Our letter calls for subpoenas and, if necessary, a special session on the problem and solutions to the extra buck per gallon Californians paid throughout the Spring and Summer.  As we write:
 
Since February, California average gasoline prices topped 80 cents extra for the first time in recorded history, have been consistently $1 more than U.S prices and exceeded $1.50 more in Southern California. In addition, the profits reported by the three California oil refiners that report oil refining profits from state operations are unprecedented in the second quarter of this year.
 
Yet California’s oil refiners have refused to publicly explain the unprecedented gasoline price spikes or be publicly questioned about the historic Golden State gouging gap both times that they have been summoned before government bodies to do so. Isn’t it time for subpoenas to compel answers from the industry about why Californians have paid $6 billion extra for their gasoline compared to US drivers since February?
 
In March, at a joint hearing held by the Senate Transportation & Energy committees, the Western States Petroleum Association (WSPA) did not produce a representative who would speak for it or the industry, sending an economist who testified he could speak only for himself. At the time, WSPA representatives claimed they had another meeting to attend that couldn’t be rearranged. 
 
Now WSPA is refusing to testify before the advisory committee created by the Governor to ward against the very market manipulation and price gouging that Californians have endured for the past eight months.  WSPA wrote that it is in no position to discuss supply problems and price spikes in the state, then warned the CEC about breaching confidentiality of data requirements in the law. The individual oil refiners have similarly refused to appear before both governmental bodies.
 
How can the legislature, the Energy Commission, or the public understand why Californians faced historic gasoline supply and price disruptions if oil refiners and their trade representatives refuse to appear publicly before the governmental bodies charged with getting answers about those disruptions?
 
This slap in Californians’ face by oil companies that have made an extra $6 billion this Spring and Summer off our pain is an outrageous abuse of market power that people and state of California should have no patience for.
Will the Governor and de León defend the average Californian? Stay tuned.
 
You can watch as Consumer Watchdog testifies Tuesday in Sacramento at 10:30 AM before PMAC and presents evidence that California oil refiners made huge profits both by shorting the gasoline market and by using their power over their branded gasoline stations to artificially drive up prices. It’s no wonder oil companies are on the run. They know they will have some explaining to do. 

Capitol Watchdog is owned and operated by nonprofit Consumer Watchdog. For more information about Consumer Watchdog visit http://www.consumerwatchdog.org

 
 

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