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Petroleum Firms Push Back Against Gov. Newsom Smearing Them as “Greedy” after Proposing Windfall Tax

Petroleum Firms Push Back Against Gov. Newsom Smearing Them as “Greedy” after Proposing Windfall Tax

“From the perspective of a refiner and fuel supplier, California is the most challenging market to serve in the United States….”

I have been wondering when America’s petroleum companies would begin vigorously pushing back against green justice inanity and the politicians who promote it.

It appears that the time is now. As I noted in my previous post, California Gov. Gavin Newsom proposed a windfall tax on the oil companies as gasoline prices in the state surge. He called the oil companies “greedy” in a Twitter tirade.

His assertions were devoid of logic and reason. And the thought of gas tax cuts to ease the pain at the pumps was dismissed out-of-hand.

Gas prices have climbed sharply in the last few weeks in California while staying steady or declining elsewhere, resulting in costs per gallon that average about $2.50 higher than in the rest of the country.

“Nothing justifies these outrageous and unconscionable prices,” he said.

A new tax would require a two-thirds vote from the Legislature. Republicans have already come out in opposition, calling instead for the state to cut the gas tax — an idea Newsom quickly rejected because there’s no guarantee the savings would be passed on to consumers.

“This is just price gouging,” Newsom said. “They can’t get away with it, they’re fleecing you, they’re taking advantage of you, every single one every single day. Hundreds of millions of dollars a week they’re putting in their pockets.”

Valero’s Vice President of State Government Affairs Scott Folwarkow responded robustly about the regulatory challenges of producing, refining, and distributing fuel in California in the current environment.

Here is a snippet of his letter to Chairman David Hochschild of the California Energy Commission.

…From the perspective of a refiner and fuel supplier, California is the most challenging market to serve in the United States for several additional reasons. California regulators have mandated a unique blend of gasoline that is not readily available outside of the West Coast. California is largely isolated from fuel markets of the central and eastern United States,

California has imposed some of the most aggressive, and thus expensive and limiting, environmental regulatory requirements in the world. California policies have made it difficult to increase refining capacity and have prevented supply projects to lower operating costs of refineries.

We believe the Commission experts understand that California cannot mandate a unique fuel that is not readily unavailable outside of the West Coast and then burden or eliminate California refining capacity and expect to have robust fuel supplies.

Adding further costs, in the form of new taxes or regulatory constraints, will only further strain the fuel market and adversely impact refiners and ultimately those costs will pass to California consumers.

Folwarkow wasn’t the only one point a finger at California’s green-justice regulatory inanity, either.

Kevin Slagle, spokesman for the Western States Petroleum Assn., called Newsom’s announcement a “political stunt,” saying if Newsom believed this was a crisis he would have called for a special session before the November election.

He also criticized the governor’s package of climate bills passed by the Legislature this year, including mandating health and safety buffer zones around all new oil and gas wells, saying those will put an even greater financial burden on taxpayers.

“It was just over a month ago that the governor and the Legislature got together and imposed a series of mandates and regulations that will cost Californians a record $54 billion. These are the types of actions that can drive consumer costs way up,” Slagle said. “A better use of the special session would be to take a hard look at decades of California energy policy and what they mean to consumers and our economy.”

Another petroleum industry official also noted foreign oil companies would not be paying the proposed tax.

CEO Rock Zierman of the California Independent Petroleum Association trade group added that foreign oil producers supplying ever more crude to the state would pay no taxes under Newsom’s plan.

Frankly, if Newsom doesn’t appreciate the oil business, perhaps it is time for petroleum companies to close down entirely and move to a state with as much oil but less attitude.


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The petroleum companies didn’t create the price dislocation, Newsom’s Party and his ideology did.

OwenKellogg-Engineer | October 9, 2022 at 12:27 pm

Cutting the “green tape”….I like this new phrase

What the “big oil” companies need to do ASAP is spin off their huge investments in “green” projects which, for companies like Exxon, BP etal account of too much of their business these days. These are projects that would lose big if it weren’t for the government subsidies.

Chevron was the first company to openly come out and tell the greenies to take a hike. That was the week after the money center banks, led by Jaime Diamond, told Rep. Tlaib’s committee to stuff it in no uncertain terms.

As it is, the banks were very much lending to the pipelines and other fossil fuel enterprises all along. But now they are being audited on their carbon footprint (ERG) performance and they’ve had enough. We have reached a turning point as more and more companies are piling on to stifle the greenies.

Alberta, Canada passed a resolution to sever itself from obeying mandates from their central government which are harmful to the province. This should be the start of provinces to separate from Canada and maybe join the US (once we get our act together).

Much of the EU is also experiencing open revolt against the oppression and repression. China is also fearing a collapse of CCP control with Xi surely spending many sleepless nights looking under his bed where his own Kamala may be lurking.

These next 2-3 months are going to be perilous as the Fourth Reich begins to collapse. I’m not predicting anything but I’ve got my emergency supplies ready just in case. Behind all of the tough talk by Republicans, I don’t see them doing anything other than help the Dems take out Trump (and now DeSantis too). Trump absolutes MUST prevail over the Nazi Uniparty takeover.

    Peabody in reply to Pasadena Phil. | October 9, 2022 at 2:31 pm

    “Chevron was the first company to openly come out and tell the greenies to take a hike.”

    Green energy is still in the experimental stages and won’t be a viable replacement for fossil fuel on wide scale for some time. When that time comes it should be phased in gradually. Let the market control it like it does everything else. There is no rush because there is no man made global warming.

      Green energy options now available will never replace oil. Oil is more than an energy source. It is the source of just about everything. So far, none of the green energy options scales up nor do they become “cleaner”. It will eventually have to become more efficient than oil and so far, they aren’t even close. Green will never be more than a niche product largely because the recent efforts to have it take over for oil have left everyone with a bad taste in their mouth. It just isn’t even close to being efficient.

      JohnSmith100 in reply to Peabody. | October 9, 2022 at 5:21 pm

      “These next 2-3 months are going to be perilous”

      This is why we have been rapidly canning a bunch of meat from our freezers. In the process of this, we are doing many complete meals in a canning jar. I want to be free of the risk of a power outage.

    JohnSmith100 in reply to Pasadena Phil. | October 9, 2022 at 5:17 pm

    “These next 2-3 months are going to be perilous”

    This is why we have been rapidly canning a bunch of meat from our freezers. In the process of this, we are doing many complete meals in a canning jar. I want to be free of the risk of a power outage.

Sounds like that preening fop Newsome is taking his
‘windfall profits’ tax idea from the EU. Same results will follow.

How about a simple fix for the next r majority Congress and r POTUS? Limit States authority over fuel standards to the fuel refined in their State. Where a State has refinery capacity to meet 100% of fuel demand they can have whatever standard the Legislature and the voters who elected them decide. However, where a State has refinery capacity of less than 100% they are limited to that %.

That would align everyone’s interests. Where a particular State decided to impose environmental regulations that made permits for building/maintaining sufficient refinery capacity to meet demand for fuel blends unworkable they could decide which tradeoffs to make. Where a State also imposed a future EV mandate and that reduced incentives for additional refinery capacity there would be another opportunity for tradeoffs to be made.

    Antifundamentalist in reply to CommoChief. | October 9, 2022 at 2:37 pm

    What would happen if the fuel companies unilaterally decided that catering to California’s fuel blend was just too much trouble and stopped? There’s gas to sell to CA, just not the blend the CA legislature demanded?

      Well supposedly we find out to some extent when their ICE ban goes into effect.

        Tionico in reply to CommoChief. | October 10, 2022 at 2:56 pm

        SOMEONE, between now and 2035, will sue to end that mandate as unconstitutoinal.Someone SHOULD already take on the ban on ICE powered small equipment, which I beleive is already in effect or will be next year. Someone will buy a truckload of such gas powered equipment and bring it into the state. If he gets busted, sue for violation of the INterstate Commerce Clause of the US Constitutin, Sell off the equipment to willing contractors.

      The Gentle Grizzly in reply to Antifundamentalist. | October 10, 2022 at 8:09 am

      Make that blendS, plural. CARB has standards to asinine that the fuel delivered to the station at, say, 3rd and Fairfax will be – by regulation – a different blend from that sold at Beverly Boulevard and Highland Ave, only about two miles away. There may be tens of blends sold in one region alone, all in the name of fine-tuning things for “the envronment”. The credentialed in charge don’t seem to realize that the cars don’t stay in their own little regions, making the whole thing moot.

      Or file an action at the SCOTUS to mandate against these stupid unconstitutoinal las, in clear violation of the Interstate Commerce Clause of the US Constitutioin. SCOTUS is the only venue with original jurisdiction in a matter wherein a State is a party to the action. READ Article Three…. says so right there.
      Standard iOil sues California at SCOTUS. That would be a wakeup call to the Gabbling Nuisance. And the resultant court ORDER, backed up by the National Guard, would be fun to watch.
      Might even be some cheering in California for a change.

      Maybe someone else, simultaneously, should file an action against the Gabbling Nuisance for swearing his oath of office then refusing to uphold it.That is felony perjury. An orange Onesie would look delightfully good on him. Sentence him to the general population section of the nastiest state prison in California.

    Tionico in reply to CommoChief. | October 10, 2022 at 2:48 pm

    All the petro companies would have to do is launch an YUUUUGE lawsuit against the entire State of California citing the erroneously labelled ‘interstate commerce clause” which mandates that CONGRESS shall “make regular” trade between the states. If California are pushing policies that make the “importation” of refined oil products into the state (such as their “spayshull” seasonal formulae) adding to the costs and hassle of moving such products into California, that is a clear violation of that “clause”. Same with California and a few other states (Washington, for one) mandating special “emissions control standards” for vehicles to enter their states, even used, another clear violation of the ICC). That would include California’s new “law” (which, being contra the uS Constitution is no law at all….) mandating special emissions requirements, even on older trucks, operating in the state. I cannot even drive MY truck tractor, legal in MY state, anywhere in California because it is not CA “compliant”. THAT was at the root of the shipping debacle this past year. 75% of owner-operated truck tractors were non-compliant with CAs new “emissions standards” and thus were banned from the INTERSTATE highways.. unable tomove freight within California. WHERE is the Federal law prohibiting this mandate? WHY is it not being forced upon Clifornia, thus freeing up commerce again?

    The Gabbing Nuisance needs to go…… and I’m not talking about his fiding the correct gender-specific restroom, either.

How come nobody ever talks about the greed of government? Greedy politicians should return some of their ‘windfall profits’ to the people. Not just the $1,050 being returning to the peeps right before the election. That’s a drop in the bucket compared to the fleecing the taxpayers have been getting for years.

    Gosport in reply to Mojo56. | October 10, 2022 at 10:41 am

    Amazing that so few seem to be asking “Just where in the hell did that $1500 per come from and where does government get off having that kind of ‘surplus’ of my tax money yet is still raising my taxes?”.

The petroleum companies went along to get along, but now they are merely a burden with benefits.

How about dropping the state tax on fuel and dropping the “special” blend of fuel requirement for Kalifornia?

His assertions were devoid of logic and reason.

Dems, including their propaganda activists masquerading as ‘journalists’, don’t really try to appeal to reason and logic anymore. Any appearances to the contrary are sophistry.

Instead they appeal to and encourage the worst of human emotions — envy, jealousy, resentment, and hatred.

They deliberately incite angry vicious mobs and tribal behavior.

They encourage behavior driven by emotion, stupidity, ignorance, and idiocy. They deliberately incite violence.

See the widespread riots, arson, looting, and violence during the summer of 2020 for an example.

The real oil company push back would be for them to shut off the oil supplies to CA, not sell there, at least for a time to prove how dependent the state is on them. Even if they don’t cut off the supply completely, would run up the prices even more and could be done before election day. CA does not understand even the most basic rules of economics. If you increase the gas taxes then the sellers will simply add the cost of the tax to the price at the pump. Corporations don’t really pay taxes, people do.