The math is so simple, anyone should be able to grasp it: Triple the gasoline prices + Triple oil refiner profits = Golden State Gouging.
Instead, Dan Walters ignores facts and misuses gas pricing data to wrongly blame environmental standards for unprecedented pain at the pump that is the result of historic oil industry profiteering (“Steyer’s flunking logic test,” Aug. 12).
Oil companies raked in an extra $4.8 billion from California drivers, compared to drivers nationally, since February despite the fact that crude oil prices are at historic lows. California’s current average gasoline price is 98 cents more per gallon than the U.S. average, and was as much as $1.30 more this year. This gap is unprecedented.
Over the 15 years that data have been collected, the price gap has averaged 28 cents. Yet Walters minimizes the significance of this historic drain on consumers’ wallets. He compares the price of California’s clean-burning fuel to prices for the same fuel elsewhere – currently a 69-cent difference. Then he wrongly accounts for that gap by applying a California Energy Commission analysis of the difference between the price of conventional fuel elsewhere and California’s clean-burning blend. It’s comparing apples to oranges.
Clean-burning fuel everywhere theoretically costs more than conventional to produce (about 10 cents). The difference between California and other states has averaged 19 cents for the last 15 years (almost all tax differences). That price gap has now tripled – and the money is going straight to oil companies. What the energy commission data actually show is that California oil refiners pocketed 48 cents of every gallon on average over the last 15 years, but that margin skyrocketed to $1.61 per gallon in the second week of July.
The state’s second largest refiner, Tesoro, had its most profitable second quarter from its California operations in its history. Valero, the fourth largest refiner, reported an 1,100 percent increase in California refining profit over the second quarter last year. Chevron, the state’s largest refiner, recorded $1.4 billion in U.S. refining profits for the first half of 2015, and 54 percent of its refining capacity is in California. That’s the best first two quarters for refining in the company’s history – three times typical first-half year profits.
There’s no denying the gouging when you follow the money.
