Is it any surprise to those of us who follow the machinations of the oil industry that they are recording record profits here in California by gouging us at the pump by way of their refinery prices? Shouldn’t be but on the other hand, it has been almost impossible to regulate how these profit hungry, pollution specialist mega-corporations do business. Blame it on the “market-based” system that the Free Marketeers hold so sacrosanct. Nothing should interfere with the market’s supply and demand approach to all economic decisions. Although the industry has not yet been found to have violated any laws against colluding to fix prices, the state’s Attorney General’, Jerry Brown has said the investigation of refiners enormous profit-spike from last year (begun by then AG Bill Lockyer) continues.
So much of their machinations are astonishingly similar to those of the energy companies back in 2000 during our energy crisis in California. Facilities going down for unscheduled and “unexpected” repairs. While always a possibility, it was curious then that when regulators attempted to investigate, they were refused admission to the production facilities or delayed entry for up to nine hours before being allowed in. In the gas refining business, we don’t even have the authority by law to conduct such inquiries.
Until we develop the political will to wean ourselves of our dependency on oil, we are pretty much beholded to these mega billion dollar companies….the same companies for whom we fight wars (each of the Iraqi wars as examples) As oil company profit margins move into the stratosphere and all but the wealthiest Californians suffer from soaring gas prices, we appear powerless to modify their behavior. Of course, if we used less of their dirty products that would help, but until we start thinking sustainably about our transportation needs and our policies about growth and development, we’re at their mercy. And how they twist the rope…..
Californians are now paying about 45 cents more for a gallon of gas than the national average. The Oilies say it is because of our uniquely constituted gasoline and that they’ve had some production problems that have reduced the amount of gas they’ve been able to produce. That, of course, is the same manipulation the energy companies used in 2000 to reduce supply and thus increase prices ( ironically, their plants went down during the height of the summer when most of California depends on electricity for air conditioning on 100 degree days in the hot spots of California, which have also seen the fastest growth in population).
But back to the Oilies, who seem to have taken a lesson from this kind of market manipulation. Unfortunately, refineries aren’t required to release their exact profit figures. BUt we do know that they’ve reduced production this
year over last year. So the question is: Are these reductions in production real or market manipulations? Of course, with only five refineries to refine all of California’s gasoline needs, it’s easy to see that the market could easily be played. And what makes it more frustrating, the California Energy Commission, which is charged with “oversight” on theses refineries, has no policing power over them nor can it inspect their facilities to confirm the accuracy of their claims about maintenance problems that they use to excuse their reduced production.
But let’s just take a look at the proverbial bottom line to see if there is an answer: Chevron Corp. posted record earnings in 2006. It controls over 25% of all refinery production in California. They have the ability to control production which then controls supply. The demand, sadly and unfortunately, hasn’t reduced so less supply means greater profit. BIngo! Doesn’t take a rocket scientist to see in whose hands our high gas prices rest.
And yet, there is very little we can do about this situation until we start doing more to get people out of their cars and onto mass transit. Or if we as a state, start taking more aggressive steps to oversee and regulate production so massive profits don’t continue to choke our people’s financial futures. It again raises the question: When is enough profit enough? For the oil companies, that answer seems to be “never”. It’s up to us to change that result. When it comes to war and profit, oil is King. In a democracy, there should be no kings. Of course, in this White House, where oil is also sitting at the Presiden’ts desk, it seems the people have been check-mated.
It’s time we awakened from this bad dream and started to demand greater protection for our families as well as our planet. Oil and its greedy marketeers are a major part of that bad dream. Oil dependence has insinuated itself into our daily lives, our foreign policy and our serious pollution problems. It is no friend. We must start to reconstitute our energy formula to remove its power and influence to ensure a healthy and prosperous future for ourselves and our planet.