October 2022

Oil Companies!  A Great Whipping Boy!

As the price of gasoline and heating oil goes way up politicians quickly jump in to blame the oil companies for the increase.  However, it has been shown again and again that California’s higher than other states gas prices are primarily, if not totally, explained by unique factors such as the state’s particular refining recipe intended to minimize smog-producing emissions, high taxes and the overall high cost of doing business.  In addition, recently due to California’s commitment to eliminating gasoline-powered cars and trucks and shifting to “zero emission” vehicles powered by batteries or hydrogen the result has been decreasing refining capacity.

When operations face a state-mandated phaseout, refiners are unwilling to invest in production upgrades.  As in-state refining declines, California is no longer a self-contained fuels island.

The global commodities market becomes a major factor in refining with the disadvantage of specially formulated fuel not being readily obtained from outside sources.

The issue becomes whether or not California has the new infrastructure before the old infrastructure is retired.  Right now, as fuel costs go up poor people are unable to get where they need to go.  Various transportation personnel have been warning for years that the state needs plans to manage the shift to renewable transportation while at the same time maintaining gasoline supplies until they are no longer needed.  Currently, whether or not this issue will be resolved soon is unknown.