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Santa Monica Consumer Watchdog Warns Against Gas Price Increase

SANTA MONICA LOOKOUT
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December 16, 2014--Santa Monica-based Consumer Watchdog on Monday released a report warning that oil industry officials plan to use “artificially inflated” gas prices, bogus refinery slowdowns and other tactics in a bid to derail the state’s new climate protection measures set to go into effect next month.

In its report, “Pump Jacking California’s Climate Protection: The Threat of Oil Industry Influence & Market Manipulation,” the nonprofit consumer advocacy organization headquartered on Ocean Park Boulevard says it chronicled several strategies oil companies are “likely to use” to undermine public support for the new laws, according to a news release.

“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,” Jamie Court, president of Consumer Watchdog and author of the report, said in the news release.

A call Monday to Rock Zierman, CEO of the California Independent Petroleum Association, a trade association, was not returned.

The report also warned state lawmaker to be on “high alert” for artificial production slowdowns and called on state and local prosecutors to take “swift action” against such actions.

New regulations next year require the state to reduce greenhouse gas emissions to 1990 levels by 2020, using “a combination of policies, planning, direct regulations, market approaches, incentives and voluntary efforts,” according to the California Air Resources Board’s website.

One part of the regulations, known as cap-and-trade, sets a cap on the amount of emissions industries can produce.

The state then issues a limited number of emissions permits, auctioning or giving them away to industry. Companies that don’t use up all of their emissions permits are allowed to sell them on the open market.

The arrangement allows companies that meet their emissions limits to sell their excess permits to companies that are not meeting their emissions goals.

Consumer Watchdog’s report claims an oil industry presentation in November outlined “an aggressive campaign to mislead the public” about the new laws.

The consumer group claims the oil industry plans to do by using “phony reports and front groups pretending to be consumer advocacy groups,” as well as the threat of higher prices at the pump.

Despite falling gas prices, Consumer Watchdog claims oil companies can easily rig prices to their advantage.

“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,” Court said in the news release.

“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.”

To read the full report, visit http://www.consumerwatchdog.org/resources/OilIndustryManipulationReport.pdf