From Watts Up With That?
Guest “You can’t fix stupid” by David Middleton
I couldn’t make this sort of schist up, even if I was trying…
Governor Newsom Signs Gas Price Gouging Law: “California Took on Big Oil and Won”
Published: Mar 28, 2023
WHAT YOU NEED TO KNOW: Following record gas price hikes and profits, Governor Newsom signed his special session bill to hold Big Oil accountable – the latest measure the Governor has taken to rein in the industry.
SACRAMENTO – Today, surrounded by legislators and community leaders in the rotunda of the California State Capitol, Governor Gavin Newsom signed legislation to implement the strongest state-level oversight and accountability measures on Big Oil in the nation – bringing transparency to California’s oil and gas industry, shining new light on the corporations that have for decades operated in the shadows while ripping families off and raking in record profits.
It is the latest instance in which the Governor has successfully taken on the historically powerful industry for putting profits over people. Last year, Governor Newsom signed legislation adding new reporting requirements to oil refiners, as well as a law protecting neighborhoods and schools from oil drilling.
[…]Read more nonsense here: Office of Governor Gavin Newsom
Before vilifying “Big Oil”, maybe Governor Newsom could have checked with AAA…
Are ExxonMobil, Chevron and the rest of “Big Oil” foregoing profits in Texas, Oklahoma, Louisiana, Kansas, Missouri, Arkansas, Mississippi, Alabama & Tennessee so that they can gouge the Peoples Republic of California? Brings on a whole new meaning of Red States vs Blue States.
There’s nothing new about West Coast gas prices being higher than the rest of these United(ish) States… Note the date of the following article:
West Coast Gas Prices Worst in Nation
By ABC News
W A S H I N G T O N, April 25, 2001 — Drivers on the West Coast pay more at the pump year after year than in anywhere else in the country. There are a multitude of reasons for the region’s sky-high gas prices, but no simple solutions.
Why the discrepancy?
“California is the third-largest gasoline consumer in the world — behind only the rest of the United States and Japan,” Jim Wells, director of the GAO’s Natural Resources and Environment division, told a Senate subcommittee.
Refineries in California operate at near full capacity in an effort to meet the high demand for gas in the state, but California also supplies fuel to Western states such as Oregon — which doesn’t have a single refinery of its own — Arizona and Nevada. And high demand makes for high prices.
Without a single oil pipeline cutting across the Rocky Mountains, the West Coast is virtually cut off from the rest of the nation’s supply of gas supply, making the region extremely susceptible to sudden gas shortages and the steep price increases they can cause.
“The West Coast gasoline market is isolated from out-of-state sources of gasoline so that supply shortages cannot be easily replaced,” said Wells, noting that shipping gas in from out of state on tanker trucks is a slow and very costly undertaking.
‘Cleaner’ Gas and Higher Taxes
Another major part of the price problem may be of California’s own making: The state uses its own special kind of gasoline.
Over the last two decades, nearly half of California’s refineries have closed. And no new refineries have been built in California or anywhere else in the United States since the 1970s.
The oil industry blames the lack of new refineries on stringent government regulations and strong opposition from local communities.
What’s changed since 2001? Not much.
Through the expansion of existing refineries, the total U.S. refining capacity has increased by about 1.4 million barrels per day (bbl/d) since 2001.
However, West Coast (PADD 5) capacity has actually decreased by about 500,000 bbl/d and all of the gasoline consumed in California is refined in PADD 5.
In 2001, California (714 mbbl/d) produced almost as much crude oil as Texas (1,162 mbbl/d). Since then, California production has plummeted to 335 mbbl/d, while Texas has edged (/sarc) up to 5,043 mbbl/d (Can you say “Permian Basin”?).
“Without a single oil pipeline cutting across the Rocky Mountains…”
“Same as it ever was”… API
California has one of the highest gasoline taxes in the nation… $0.8655/gal (including Federal taxes). In Texas, the all-in tax is only $0.384/gal.
There’s also California’s unique, planet-saving, blend of gasoline… Governor Newsom could have just checked with the California Energy Commission.
What Drives California’s Gasoline Prices?
Gasoline price changes in California are primarily driven by the cost of global crude oil and significant unplanned refinery outages. Currently, Russia’s invasion of Ukraine is causing crude oil prices to increase and remain volatile. Gasoline prices are highly sensitive, so any shift in supply and demand changes what you pay at the pump.
Filling up the tank in California also costs more since gasoline prices are higher on average than the rest of the United States for a few reasons. These reasons include the isolated nature of the state’s transportation fuels market, a special gasoline recipe that reduces air pollution, environmental program costs, and taxes.
An Isolated Market
California’s transportation fuels market is isolated, meaning that gasoline purchased in California is also refined in the state. Oil refineries and fuel distribution centers are isolated by time and distance from alternative sources to resupply during unplanned refinery outages. Price spikes can last longer for Californians because costs are higher, and the resupply time is longer.
“An isolated market,” dependent on imported foreign crude oil and a handful of aging refineries, operating in the most industry-hostile environment imaginable. So, yes, when a refinery has to go offline in California, it’s a big fracking deal for Californians. Earth to Gov. Newsom: All refineries have to occasionally go offline.
Even if he’s too lazy and/or stupid to read the article, he could have looked at the pictures.
Abundant resources, abundantly stupid politicians
Foreign suppliers provide almost half of the crude oil refined in California.
California has about 4% of the nation’s total crude oil reserves, and it is the seventh-largest crude oil producer among the states.86,87 Reservoirs along California’s Pacific Coast, including in the Los Angeles basin, and those in the state’s Central Valley contain major crude oil reserves. The most prolific crude oil-producing area in the state is the San Joaquin basin in the southern half of California’s Central Valley.88,89 Although California’s crude oil production declined steadily since 1985, the state produced almost 131 million barrels of crude oil in 2021.90
Assessments of California’s offshore areas indicate the potential for large, undiscovered recoverable crude oil resources in the federally administered Outer Continental Shelf (OCS).91 Concerns about the risks of offshore crude oil and natural gas development after the 1969 Santa Barbara oil spill resulted in a permanent moratorium on offshore oil and natural gas leasing in state waters.92 Congress imposed a federal moratorium on oil and natural gas leasing in California federal waters in 1982. The federal moratorium expired in 2008.93 However, no California offshore federal lease sales have occurred since then and President Biden signed an executive order in January 2021 that suspends new oil and natural gas leasing on federal public lands and offshore waters.94,95 There are 22 older crude oil and natural gas production platforms that remain active in federal waters and 11 in state waters off the coast of California.96,97
California has about one-tenth of the nation’s total crude oil refining capacity and ranks third after Texas and Louisiana.98 A network of pipelines connects California crude oil production to the state’s 14 operable refineries, which are located primarily in the Los Angeles area, the San Francisco Bay area, and the San Joaquin Valley.99,100 California refiners also process large volumes of foreign and Alaskan crude oil. As crude oil production in California and Alaska declined, the state’s refineries increased their supply from foreign imports.101,102 Led by Ecuador, Saudi Arabia, Iraq, and Colombia, foreign suppliers provided almost half of the crude oil refined in California in 2020.103,104
California requires that all motorists use, at a minimum, a specific blend of motor gasoline called CaRFG (California Reformulated Gasoline) as part of an overall program to reduce emissions from motor vehicles. California refineries produce cleaner fuels in order to meet state environmental regulations.105 Refineries in the state often operate at or near maximum capacity because of the high demand for those petroleum products and the lack of interstate pipelines that can deliver them into the state. When unplanned refinery outages occur, the lack of CaRFG deliveries available by interstate pipelines means replacement supplies of CaRFG come in by marine tanker from out-of-state U.S. refineries or from other countries. It can take several weeks to find and bring replacement motor gasoline from overseas that meets California’s unique specifications.106
California is the nation’s second-largest consumer of refined petroleum products, after Texas, and accounts for about 9% of U.S. total consumption.107 In 2020, California was the nation’s largest consumer of jet fuel and the second-largest consumer of motor gasoline, after Texas.108,109 The transportation sector uses about 85% of the petroleum consumed in the state. The industrial sector accounts for about 12% of state petroleum use. The commercial sector consumes about 2%, and the residential sector uses less than 1%.110 Only about 1 in 30 California households heat with petroleum products, and most of those use hydrocarbon gas liquids (HGL) such as propane.111EIA
- California has abundant oil & gas resource potential, both onshore and offshore. Politicians like Governor Newsom aggressively try to prevent the exploitation of those resources.
- California requires a very specific blend of gasoline which must be refined within the state. Politicians like Governor Newsom are openly hostile to the companies that operate those refineries.
- California is the second largest consumer of gasoline in the world’s #1 oil producing nation. Politicians like Governor Newsom have created an environment in which the largest state in world’s #1 oil producing nation has to import 56% of its crude oil from foreign nations.
California Took on Big Oil and Won” – California blames “Big Oil” and passes more nuisance legislation, which will do nothing more than cost California consumers more money.
Governor Nuisance… “Here’s your sign”
Featured Image Source
Gavin Newsom Named U-Haul Salesperson Of The Year
U.S.·Sep 15, 2021 · BabylonBee.com
SACRAMENTO, CA – U-Haul has named Governor Gavin Newsom its Salesperson of the Year for the third year in a row after a record-setting sales quarter.
“We are astounded by the growth we’ve seen in California,” said U-Haul’s Western Regional Director Fennick Buggstein. “Thanks to Gavin Newsom, literally every middle-class family has moved out of the state! It’s been impossible to keep up with demand! Also, most of our workers left the state too, which kind of stinks.”
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