Oakland, CA – The nonprofit Consumer Watchdog released a report chronicling the tactics California oil companies are likely to use to undermine implementation of climate protection laws and warned state officials they include artificially hiking the price of gasoline.
“In addition to unprecedented lobbying and campaign contribution expenditures in recent years, California’s oil companies are likely to use their extraordinary power over the gasoline market to artificially inflate gasoline prices as a way of driving political pressure against the new legal obligations refiners will face beginning in January 2015,” Consumer Watchdog reported.
The report – “Pump Jacking California’s Climate Protection: The Threat of Oil Industry Influence & Market Manipulation” – can be read at: http://www.consumerwatchdog.org/resources/OilIndustryManipulationReport.pdf
The nonprofit nonpartisan consumer group called on state officials to be on high alert for intentional slow downs in California’s refineries, which enable the companies to spike prices rapidly.
Among the findings of the report, released at NextGen Climate America’s Climate Leadership Forum in Oakland, are these:
• Significant market consolidation in the hands of a few refiners and historically low inventories of gasoline have given oil companies the power to artificially increase or decrease gas prices at critical moments. Unwarranted refinery outages and other production “slow downs” should be met with swift investigation and prosecution.
• During the last six years, as the climate change movement began to intensify in California, the oil industry spent $106 million between January 2009 and September 2014 on lobbying and campaign contributions to politicians and ballot measures in California.
• California’s oil and gas industry spent $175 million on campaign contributions from 2004 to 2014. The expenditure, matched only by pharmaceutical and insurance industries, makes these industries the biggest corporate campaign spenders during the last decade.
• An internal presentation from the Western States Petroleum Association delivered in November details an aggressive campaign to mislead the public through phony reports, front groups pretending to be consumer advocacy groups, and threatening increased gas prices under California’s landmark climate change law, AB 32.
“Despite the glut of crude oil on the market, California’s oil companies can rapidly raise the price of gasoline by simply cutting back on refining the state’s unique blend of gasoline, which is intentionally kept in short supply by companies,” said Jamie Court, president of Consumer Watchdog and author of the report. “The governor and state officials should warn the oil companies that California will not put up with the pump-jacking of climate protections and will not tolerate more Enron-like manipulation of our energy market.”
The report finds: “California's under-regulated gasoline market resembles our briefly deregulated electricity grid during 2000-01, when energy pirates such as Enron manipulated prices…. The California gasoline market is structured to create shortages and scarcity. When an inevitable problem occurs to shock the system, such as a refinery outage or pipeline problem, gasoline prices and company profits go through the roof in tandem.
“Over the last decade, Californians have consistently paid prices that are 10 to 20 cents a gallon higher than the rest of the nation, and we have lower inventories. The rest of the continental U.S. has about 24 days of gasoline on hand; California's average is 10 to 13 days. Not surprisingly, over the last 10 years, refineries on the West Coast have consistently been among the most profitable in the continental U.S.”
Read more about Consumer Watchdog at www.consumerwatchdog.org