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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