Tanked by Big Oil

There’s no question that the price of gasoline and diesel fuel at the pump is a rather direct product of the law of supply and demand and that OPEC+ (which includes Russia, a petroleum producer rough the size of Saudi Arabia) is the major oil and gas price-fixer on earth. OPEC+ nations set production limits and increases for the largest aggregation of oil producing nations on the planet. Think of all the fossil fuels on Earth as sitting in a global bathtub. Everyone has to pay the same price for the same fuel, no matter where the oil and gas are actually located. Sure, individual governments can subsidize the price of fuel to their residents, add a tax to the price at the pump or require enhanced refining techniques to minimize greenhouse gas emissions. And yes, the quality of the oil also impacts price. Simply put, Texas oil drillers do not set the price of oil anywhere, even what is extracted from Texas; it is priced based on that global “bathtub” price.

So, when you hear such sophisms as Trump’s mantra “DRILL, DRILL, DRILL,” that is flawed for two clear and provable facts: 1. The United States pumps more oil and gas today than it did during the Trump administration years (see above chart). & 2. Even if we generated even more oil and gas extraction by drilling more, that would unlikely have much of an impact on the price at the pump. The war in Ukraine has a greater impact, and OPEC+ is clearly the main cause for price gouging.

Despite massive conservative pockets in the state, Donald Trump hates California and loves to exaggerate our ills, which are truly not particularly different from most of the rest of the country. We are the tech and vegetable center of the nation, produce lots of oil and gas, and if California were a separate nation, we’d have the fifth (teetering on becoming the fourth) largest economy on earth. We are coping, along with the rest of the Southwest, with water issues (and solving them), and our climate makes us particularly attractive to homeless folks. We also have our own border with Mexico and seem to be able to handle a complex immigration conundrum without having to transport undocumented asylum seekers to Texas. Our crime rates, on a per capita comparison, are also better than most red states.

But California does have stricter automotive and industrial fossil fuel emission requirements, which does make our gasoline a bit more expensive to refine. Our state taxes at the pump are indeed higher than most other states, but then we are coping with some very real geological reasons that tend to contain greenhouse gas emissions into basins, often surrounding major urban areas. Smog. California has long focused on reducing air pollution with increasing success. Cars and trucks sold here do face stricter emissions controls, which have become the standard of most of the rest of the US…. since California has more cars and trucks than any other state.

But Big Oil has embraced Trump’s ragging on California as a radical leftist state with out-of-control regulations, a “primary cause” of those higher gasoline prices. It seems that California actually cares more about the health and safety of its residents than it does about Big Oil’s massive recent increase in profits. Hmmmm? Clearly, the MAGA move to eliminate EPA environmental protections against pollution and greenhouse gasses signal that Big Oil’s Profits are their unequivocal priority, and health and safety are expendable. Big Oil is spending a fortune on ads blaming these nasty environmental protections are the reason oil prices are rising. Really? Not so fast, as this excerpt from a March 19th Los Angeles Times Editorial Board piece explains:

“If you live in California you’ve probably run across ads blaming high gasoline prices on state laws and policies. They’re online, on television, in mailers, on highway billboards and even on gas pumps themselves. One of them asks in big, bold letters ‘why is our gas expensive’ and directs you to a ‘facts per gallon’ website that complains about government gas taxes and fees.

“It’s all part of a multimillion-dollar ad campaign by the oil industry to deflect attention from its greed and shift blame for the nation’s highest gas prices onto California’s environmental policies. Oil companies want you to believe that what you pay at the pump has nothing to do with the record-high profits they’ve been raking in, but rather, is the fault of California’s leaders for trying to protect consumers, public health and the climate… But the ‘facts’ are curated to mislead and exploit cash-strapped Californians’ economic anxieties to undermine environment- and consumer-friendly policies that some of the most powerful companies on Earth don’t like… It’s just more misdirection from fossil fuel interests that want to keep profiting from a product that’s polluting our air and overheating the planet…

“The industry is spreading these ads across the state because of new laws California has passed to take reasonable steps to protect consumers from price gouging, force more transparency about industry profits and emissions and end new drilling near homes and schools, a health protection the industry is trying to overturn through a referendum on the November ballot…

“It is true that a portion of what Californians pay at the pump goes to state and local taxes and fees, which fund road repair, pollution reduction projects and other public benefits. But an even greater percentage of the per-gallon cost goes to the oil industry for refining, distribution and marketing and as profit, according to the California Energy Commission… We don’t know exactly what all that money being sucked up by oil refiners, distributors and retailers is paying for because those details have long been shrouded in mystery. While some of it goes toward operating expenses, a good portion is pure profit, which surges when gas prices spike and flows into the coffers of Chevron, Valero and other oil companies.

“It’s also unclear why Californians pay so much more for gas. In February, California’s prices were $1.35 per gallon higher than the rest of the country, and between 30 to 40 cents of that is what UC Berkeley economist Severin Borenstein calls a ‘mystery gasoline surcharge’ that cannot be explained by higher taxes, fees or environmental standards…

“But oil companies want you to believe they are struggling. The industry claims that the state’s six major oil refiners were losing an average of 31 cents per gallon by the end of last year, citing self-reported figures whose accuracy has been questioned by state officials. In fact, oil companies have been making a killing recently, posting some of their most profitable years ever while most Americans struggled to afford groceries, gas and other essentials.” Simply, Big Oil has never had it so good, even in California.

I’m Peter Dekom, and between massive campaign contributions and misleading ads, Big Oil pretends to be conservation-minded, but its actions and policies are anything but.