Industry-Beating 40% Profit Jump Shows High Profits of California Pumping and Refining Operations, Group Says
Santa Monica, CA -- Chevron's record-breaking third-quarter profit puts the lie to its threats that California oil production would decline if Proposition 87, the Clean Energy Initiative, were passed in the Nov. 7 election, said the Foundation for Taxpayer and Consumer Rights.
San Ramon-based Chevron crowed today over its surprising quarterly 40% profit jump to $5 billion. Then, when talking to analysts about its record-breaking wealth, a Chevron executive complained that a proposed clean-energy initiative in California could, at current profit levels, cost Chevron "on the order of $200 million." In a similar vein, the Chevron-funded ads against Proposition 87, the clean energy measure on the Nov. 7 ballot, threaten that this cost will make oil companies cut back on pumping oil in California and import "foreign oil" instead. Given Chevron's high profits from its California operations, that argument is false, said FTCR.
"Chevron's shareholders would horsewhip any Chevron executive who cut production in a fit of pique over a fee of one-tenth of one percent on its overall profits," said Judy Dugan, research director of the Foundation for Taxpayer and Consumer Rights. "Chevron's threat, given that every barrel of oil the company pumps in California would still yield 63% profit after the prop 87 fee, is rubbish." See California crude oil profit chart at http://www.consumerwatchdog.org/energy/rp/6994.pdf. Under Proposition 87, the extraction fee would decline if the world price of oil fell sharply, FTCR noted.
"Oil companies make their highest profits on oil they pump themselves," said Dugan, "and oil pumped near a company's own refineries is the most profitable of all."
FTCR noted that Chevron has thought nothing of pouring at least $46 million in political contributions into California's current election cycle alone. That includes $44 million on ballot initiatives, the bulk of it against Proposition 87. Chevron is also the largest funder of the campaign against Proposition 89, the Clean Elections Initiative, which would diminish the political power of Big Oil and other immensely wealthy lobbies in Sacramento.
Chevron's third-quarter profit percentage increase beat all the other major oil companies in part because of its major presence in California. During much of the summer gasoline price spike, which topped out at over $3.38 in the state, Californians were paying up to 50 cents more per gallon than the national average. Chevron pumps an average of 212,000 barrels of crude per day in California, according to federal data, much of it to supply its two California refineries, which process an average of 503,000 barrels of oil a day, nearly 25% of the state total, according to the California Energy Commission. If even half of that crude oil were made into gasoline, the resulting 50-cent a gallon "Chevron tax" on California motorists this summer would have been up to $5 million a day, about $150 million a month, said FTCR (21 gallons of gasoline refined per barrel of crude, 10 million gallons total, times 50 cents).
"When Californians see the Chevron ads against Prop 87, they should remember that this summer Chevron charged Californians hundreds of millions of dollars more for gasoline than other drivers around the country -- and picked our pockets to bank their largest quarterly profits," said Dugan.
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