Tag Archives: California oil industry

Wave of oil money hits local Calif. climate candidates

By Adam Aton, E&E News reporter Climatewire: Monday, March 2, 2020
Oil pump jacks are seen next to a strawberry field in Oxnard, Calif. Photo credit: Lucy Nicholson/REUTERS/Newscom
Oil pump jacks are seen next to a strawberry field in Oxnard, Calif., where climate change is a top issue in a race for the Ventura County Board of Supervisors. Lucy Nicholson/Reuters/Newscom

OXNARD, Calif. — The oil industry has turned an epicenter of climate change into one of its first 2020 battlegrounds.

And the election it’s targeting isn’t for president, Congress or even the California Statehouse. It’s more local than that.

Ventura County, California’s fastest-warming county and one of its top oil producers, is voting tomorrow for three of the five seats on its county Board of Supervisors.

With the power to deny oil permits, a majority on the board would give climate hawks a powerful weapon to use against one of the region’s heavyweight players. Greens have notched some wins recently — but now the industry is fighting back.

One oil company, California Resources Corp., a spinoff from Occidental Petroleum Corp., already has spent more than $800,000 — more than the opposing candidates have raised combined.

That has reshaped an election where 50-cent mailers are normally big-ticket items. This year, the oil-aligned candidates even have had ads air on cable news.

“They’ve spent so much money. I mean, we’re a little town. I see my face on CNN and MSNBC talking about what a corrupt politician I am,” said Oxnard Mayor Pro Tem Carmen Ramírez, who’s running for the county board with environmentalist backing.

The contest is an early test, too, for the forces already shaping the Democratic presidential primary, as well as races for Congress and the reelection campaign of President Trump. On one side are activists trying to mobilize voters with environmental issues. On the other side is money.

The outcome could be a harbinger for elections across the nation where energy and environment issues play big. California alone has several House seats where Democrats in 2018 leveraged climate and clean energy promises to knock off once-dominant Republicans.

Ventura Supervisor Kelly Long won in 2016 with the help of about $175,000 from the oil industry, flipping the seat Republican. She has more than double that oil money this time, as does Jess Herrera, a longshoreman and port commissioner who is also getting a six-figure oil money boost for his county board campaign.

Greens are using the big spending to try to galvanize their own voters and volunteers. It’s a tactic that could have more power in a political environment shaped by Trump. Unlike the 2016 race, activists say climate and campaign finance have mixed into a potent message this time around.

The election has turned into a referendum on Big Oil, said RL Miller, founder of Climate Hawks Vote and a candidate for the Democratic National Committee.

“It was hard [last time] to get a lot of Democrats to really care, other than on purely tribal, partisan [grounds],” said Miller, who lives in Ventura County.

“Now, the Dem messaging is really explicitly about a Big Oil, dark money super [political action committee]: Don’t let outside oil money buy this election.”

Ramírez’s campaign has countered the oil effort with ads on Spanish radio, press conferences with Democratic leaders and handwritten postcards to voters. The campaign has sent about 6,000 in the last month, said her campaign manager, Robert O’Riley.

He added that Ramírez’s supporters were animated by the other side’s spending.

“It really backfired at them,” he said. “That’s a real, true grassroots effort that we have. … You dump a million dollars, and we gather in homes and buildings and write postcards to people.”

A California Resources spokesperson said the oil company is trying to defend jobs in the 20 fields it operates in the county.

“Recent policies of the County Board of Supervisors have hampered the ability of businesses in several industries, including ours, to invest locally and resulted in losses of good-paying jobs and local tax revenues,” the company’s communications director Rich Venn said in a statement.

“We support committees and candidates who understand the importance of sensible regulations that foster reliable and affordable in-state energy production and its economic, environmental and social value to our communities,” Venn added.

One oil and gas worker said the industry has operated in the area for a century without major problems — an assertion that others dispute. He added that all people in the industry care about the environment because they have to drink the water and breathe the air, too.

“I’m not going to harm myself for a paycheck,” said the worker, who only gave his name as Adam V. to protect himself from retaliation.

Oil industry decline

A homeless camp in Oxnard, Calif. Photo credit: Adam Aton/E&E News
A homeless camp in Oxnard is situated between a power plant and a Superfund site. Adam Aton/E&E News

Ventura County’s oil sector has been in decline for decades. In 2016 the county produced 7.7 million barrels of oil, a fraction of the 46 million it produced in 1958. Some wells operate under decades-old permits.

That industrial legacy is still visible in the offshore oil pads looming over Oxnard’s beaches and the pumpjacks churning among strawberry fields.

The U.S. Geological Survey last year reported contaminants like methane in the groundwater around Oxnard’s oil fields. The county board has set a moratorium on new wells around potable water sources pending further study. Supervisors also are considering a new setback requirement for oil projects, which could significantly restrict the areas where companies could drill.

Kim Marra Stephenson, the candidate challenging Long, says Ventura County needs to prepare for a decline in the oil industry similar to the downturn of coal.

She cited reporting by the Los Angeles Times and Center for Public Integrity that found that California Resources has 7,600 idle wells, with the average idle well producing nothing for 14 years. The company’s share price has tumbled, and the report estimated it faces $1 billion in cleanup costs on top of $5 billion in other debt maturing by 2022.

“They’re trying to hang on by a thread here in Ventura County. When they go bankrupt, I’m very, very concerned about who’s going to foot that [cleanup] bill and what’s going to happen to our workers,” Stephenson said.

“I’m not saying ban everything right now, but we’ve got to make this transition because it could be falling on us even if we don’t choose it.”

Ventura is also the fastest-warming county in the lower 48 states, according to an analysis by The Washington Post. Its temperatures have risen by an average of 2.6 degrees Celsius. Worldwide averages are closer to 1 C of warming.

The rise in extreme heat hits hard in this heavily Latino area, where many people work on farms. The county also has seen a run of destructive wildfires, including the 2017-2018 Thomas Fire, one of the largest in state history.

That has made climate change a bread-and-butter issue for voters here, who might miss work if conditions are too smoky to work in the fields, said Lucas Zucker, policy and communications director for the Central Coast Alliance United for a Sustainable Economy.

Mobilizing those Latino voters is a long-term project, he said. Organizers have to contend with people who move often, fear intimidation or have felt ignored by the government.

Zucker contrasted that approach to the tactics of California Resources, whose advertisements have attacked trips that Ramírez took to foreign countries — rather than boosting its own image as an oil company.

“For them, it’s kind of a slash-and-burn model,” he said. “They’re not even trying to build long-term support for industry. It’s really just about attack, attack, attack. … Whatever it takes to win the election, then we’ll figure everything else out later.”

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    NextGen Climate’s Tom Steyer: If Oil Company Executives Won’t Answer Questions They Should Face Subpoena

    Press Release by NextGen Climate

    NEXTGEN CLIMATE FOUNDER & PRESIDENT TOM STEYER CALLS FOR ANSWERS FROM BIG OIL ON GAS PRICE SPIKE IN CALIFORNIA

    Steyer Says If Oil Company Executives Won’t Answer Questions They Should Face Subpoena  

    May 5, 2015 3:53 PM

    SAN FRANCISCO—NextGen Climate Founder and President Tom Steyer today spoke at a Chevron gas station about the recent gas price spike in California and called on the State Senate to subpoena oil company executives if they refuse to provide answers to basic questions about their pricing and oil refining practices.

    “As everyone knows, the oil companies have been charging Californians up to $1 billion per month more for gasoline than if we paid the national average,” Steyer said. “It’s time to put an end to the Big Oil giveaway, and start giving Californians a fair shake.”

    Steyer also highlighted recent comments made by Chevron during its first quarter earnings call with investors last week. Chevron’s general manager of investor relations, Jeff Gustavson, noted that refining margins “increased earnings by $435 million driven by unplanned industry downtime and tight product supply on the U.S. West Coast.”

    As Steyer noted, Chevron is saying for the  oil industry, “their problems were good for their profits.” Steyer also highlighted the problem with the lack of transparency into the oil industry’s business practices, saying “we don’t have the facts we need in order to know if we’re paying fair prices based on the market, or if oil companies are deliberately taking actions which lower supplies and drive profits higher.”

    Oil company executives had the opportunity to show up for a Senate hearing in March, to answer questions and allow Californians to judge whether they are being unfairly gouged at the pump. But industry executives refused to show up, instead sending a paid economist who then claimed he didn’t speak for the oil companies. If these executives continue refusing to answer for their business practices, the State Senate should subpoena these executives to force them to answer to Californians. Once Big Oil answers this call, we can begin to fix California’s rigged gasoline market and give Californians the fair shake they deserve.

    ###

    NextGen Climate is focused on bringing climate change to the forefront of American politics. Founded by Tom Steyer in 2013, NextGen Climate acts politically to prevent climate disaster and promote prosperity for all Americans.

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      California oil: Refinery profit margins rise during price spikes

      Repost from The San Francisco Chronicle
      [Editor:  Significant quote: “A new report from the nonprofit group Consumer Watchdog argues that refinery profit margins in the state rise during price spikes — even when a company has to buy extra wholesale gasoline to make up for refinery downtime.”  – RS]

      Refinery ills push price of gasoline up sharply

      Higher crude costs add to spike at pump
      By David R. Baker, 4 May 2015, 7:23 pm
      The ExxonMobil refinery is seen after an explosion in a gasoline processing unit at the facility, in Torrance, Calif., on Wednesday, Feb. 18, 2015. Two workers suffered minor injuries and a small fire at the unit was quickly put out. The incident triggered a safety flare to burn off flammable substances. The facility about 20 miles south of downtown Los Angeles covers 750 acres, employs over a thousand people, and processes an average of 155,000 barrels of crude oil per day, according to the company. (AP Photo/Nick Ut) Photo: Nick Ut, Associated Press
      The ExxonMobil refinery is seen after an explosion in a gasoline processing unit at the facility, in Torrance, Calif., on Wednesday, Feb. 18, 2015. Two workers suffered minor injuries and a small fire at the unit was quickly put out. The incident triggered a safety flare to burn off flammable substances. The facility about 20 miles south of downtown Los Angeles covers 750 acres, employs over a thousand people, and processes an average of 155,000 barrels of crude oil per day, according to the company. (AP Photo/Nick Ut) Photo: Nick Ut, Associated Press

      California’s gasoline prices jumped 31 cents in the last week, pushed higher by rising crude oil costs and problems at several state refineries.

      It’s the second time this year that California drivers have faced such a steep price spike. And it has some oil company critics livid at a state gasoline market they say is designed to fail.

      “This is a problem that only benefits them, to the expense of California consumers,” said Tom Steyer, the billionaire environmental activist who has pushed to raise the oil industry’s taxes in the state. “When you look at an oligopoly, is there anyone there with an incentive to solve this problem? I would say no.”

      The average cost of a gallon of regular in California hit $ 3.71 on Monday, according to GasBuddy.com. Less than a month ago, in mid- April, regular was selling for less than $ 3.10.

      And while gas prices have been moving higher nationwide, California has by far the nation’s priciest fuel. Even Hawaii currently pays less, with an average of $ 3.20. The national average stands at $ 2.63, according to GasBuddy.com.

      Part of the problem lies in crude oil prices, which have risen 34 percent since mid-March. But California’s sudden price surge also reflects unique aspects of the state’s gasoline market that have frustrated drivers for more than a decade.

      California uses its own pollution-fighting fuel blends not found in other states. As a result, most of California’s gasoline is made by 14 refineries located within the state’s borders. The state also has some of the country’s highest gasoline taxes — almost 66 cents per gallon. And starting in January, California’s cap-and-trade system for reining in greenhouse gas emissions added 10 cents to the overall cost, according to estimates.

      Since only a limited number of refineries make California grade gasoline, any hiccup in production can move prices. In February, Tesoro temporarily shut down its Martinez refinery in response to a labor strike, and an explosion hobbled Exxon Mobil’s refinery in Torrance ( Los Angeles County). Prices soared for four weeks.

      Analysts blame the current spike on production glitches at the Tesoro refinery in Martinez and the Chevron refinery in Richmond, which suffered a flaring incident on April 21.

      In addition, the Oil Price Information Service reported last week that Chevron took down a key unit at its El Segundo ( Los Angeles County) refinery for maintenance, prompting the company to buy up extra gasoline supplies on the wholesale “spot” market to fulfill its contracts to fuel distributors. A Chevron spokesman declined to comment on the El Segundo refinery.

      The price spike may be easing, with the statewide average rising just 1 cent overnight from Sunday to Monday. Wholesale prices are already started to fall.

      Consumer advocates have long argued that the oil companies benefit from keeping gasoline supplies tight in California, with too little fuel held in storage for when the next refinery breakdown strikes.

      A new report from the nonprofit group Consumer Watchdog argues that refinery profit margins in the state rise during price spikes — even when a company has to buy extra wholesale gasoline to make up for refinery downtime. Soaring retail prices more than make up for the added expense of buying extra supplies, said Jamie Court, the group’s president.

      “The oil companies know that even if it’s their refinery that’s knocked out, the higher prices will more than compensate them,” he said.

      Court wants the state to require oil companies to maintain a specific amount of fuel in storage, to prevent or at least lessen future price spikes.

      The U. S. Department of Energy is studying the idea of a fuel “reserve” on the West Coast — similar to the nation’s Strategic Petroleum Reserve — but has framed it as a way to prevent supply disruptions after natural disasters, such as earthquakes or tsunamis. Tupper Hull, spokesman for the Western States Petroleum Association, said California officials have considered the idea before — and rejected it as unworkable.

      “Intuitively, setting aside large volumes of fuel from the market is not going to help,” Hull said.

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        California Pledges Changes in Protecting Underground Water

        Repost from ABC News (AP)

        California Pledges Changes in Protecting Underground Water

        By Ellen Knickmeyer, AP, Feb 9, 2015

        California has proposed closing by October up to 140 oilfield wells that state regulators had allowed to inject into federally protected drinking water aquifers, state officials said Monday.

        The deadline is part of a broad plan the state sent the U.S. Environmental Protection Agency last week for bringing state regulation of oil and gas operations back into compliance with federal safe-drinking water requirements. State authorities made the plan public Monday.

        An ongoing state review mandated by the EPA found more than 2,500 oil and gas injection wells that the state authorized into aquifers that were supposed to be protected as current or potential sources of water for drinking and watering crops.

        An Associated Press analysis found hundreds of the now-challenged state permits for oilfield injection into protected aquifers have been granted since 2011, despite the state’s drought and growing warnings from the EPA about lax state protection of water aquifers in areas of oil and gas operations.

        Steve Bohlen, head of the state Department of Conservation’s oil and gas division, told reporters Monday that the proposed regulatory changes were “long overdue.”

        EPA spokeswoman Nahal Mogharabi said Monday that federal authorities would review the new state plan over coming weeks. “EPA will then work with the State to ensure that the plan contains actions that will bring their program into compliance with the Safe Drinking Water Act,” Mogharabi said. She referred to landmark 1974 legislation that sought to protect underground drinking-water sources from oil and gas operations.

        Bohlen said 140 of those 2,500 injection wells were of primary concern to the state now because they were actively injecting oil-field fluids into aquifers with especially good water quality.

        State water officials currently are reviewing those 140 oil-field wells to see which are near water wells and to assess any contamination of water aquifers from the oil and gas operations, Bohlen said.

        Part of the state plan released Monday would set an Oct. 15 deadline to stop injection into those water aquifers deemed most vital to protect them from contamination. State officials also could shut down oil field wells sooner if they are deemed to jeopardize nearby water wells, authorities said. This summer, the state ordered oil companies to stop using at least nine oil field wells that altogether had more than 100 water wells nearby.

        The U.S. EPA had given the state until Friday to detail how it would deal with current injection into protected water aquifers and stop future permitting of risky injection.

        While some of the fluids and materials that oil companies inject underground as part of normal production is simply water, some can contain high levels of salt or other material that can render water unfit for drinking or irrigating crops.

        California is the nation’s third-largest oil-producing state, and oil companies say the kind of injection wells under scrutiny are vital to the state’s oil production.

        Tupper Hull, a spokesman for the Western State Petroleum Association, said the oil-industry group feared state regulators would not be able to meet all the deadlines they were setting for compliance with federal water standards.

        If that happens, oil producers “would be put into the untenable position of having to shut in wells or reduce production,” Hull said.

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