Heading to Sacramento Wednesday to testify on California’s outrageous gasoline price spikes, I was looking for context to explain the $10 billion extra California drivers paid for their gasoline in 2015 compared to US drivers. Then I read the Star Wars series made $4.4 billion worldwide.
An oil oligopoly, anchored by four California oil refiners, that control 78% of the gasoline market, raked in more extra dollars at the pump in one year than one of the most successful movie franchises in history.
Big Oil in California is bigger than Star Wars, so maybe it shouldn’t have surprised me that it just turned one of the old Sacramento Jedi knights against gasoline price gouging into the service of the dark side.
I was waiting to testify at the California Energy Commission hearing when former Attorney General Bill Lockyer tapped me on the shoulder and told me he was now the new anti-trust expert for the oil refiners’ Western States Petroleum Association.
Lockyer had been the leading Democrat in California taking on the oil industry’s price gouging during his Attorney General tenure in the early 2000s. We worked together to keep open a Bakersfield refinery Shell wanted to shutter to short the market. His 2000 Gas Pricing Taskforce, which I sat on, is the only state body to acknowledge refiner consolidation’s impact and call for reforms. Now Lockyer, at 74, is serving the Empire.
The anti-trust case against Big Oil in California is only getting stronger with the new information we put on the table at the California Energy Commission’s Petroleum Market Committee. In addition to supply irregularities, we exposed oil refiners’ price manipulation that keep prices way too high at the brand stations they control, 80% of the market, compared to the cheap gas the companies sell at 30 to 50 cent discounts to unbranded companies in secret, dark trades. As I mentioned at the end of my presentation, oil refiners have to be worried, which is no doubt why they hired Lockyer to keep the anti-trust watchdogs at his old Attorney General’s office off their back.
During the public comment, Lockyer made a statement that he had been hired to update his task force’s 2000 report on undue market power and compare the situation to the present. Watch the video, in which Bill compares me to Donald Trump.
Perhaps the biggest surprise during Wednesday's hearing, was the attendance by former state Atty. Gen. Bill Lockyer, who conducted his own investigation into gasoline prices and oil company profits nearly a decade ago.Lockyer told the committee that he was hired by the oil refining industry to update the analysis from his old reports resulting from that and other investigations.In one of those reports, Lockyer reviewed an antitrust matter involving the Exxon Mobil merger in the late 1990s and early 2000s. He concluded that Californians had paid $1.3 billion more for gas in 1999 “largely as a result of low competition and high concentration in the state's gasoline market.”By Court's account, matters only got worse this year for consumers, compared to previous reviews. According to Court's figures, oil refineries added $10 billion to the cost of gas in California this year or more than $400 per driver.”
We’ll see how Darth Lockyer’s new report comes out, but if you think he’ll be reaching pro-consumer conclusions, I’ve got a gallon of gasoline I want to sell you at about $3 bucks when crude is at $37 per barrel.
