Tag Archives: Gasoline prices

CA Gov. Gavin Newsom, Gasoline prices, Price gouging, Valero

Valero raked in $11.5 billion in 2022 profits, beating its $930 million for the previous year by a dozen times.

Valero 2022 Profits Skyrocket But Gas Pump Gouging In CA Moderates As CA Threatens Refiner Penalty

Consumer Watchdog, by Liza Tucker, 01/26/2023

Los Angeles, CA—Valero raked in $11.5 billion in 2022 profits, beating its $930 million for the previous year by a dozen times. However, Governor Newsom’s call for a special session in October to deal with price gouging appears to be having an impact on gouging in California as California-reported refinery margins were lower than any other region for the first time this year and in line with historic margins.

“Valero reported profits per gallon of gasoline in California during the fourth quarter at below 50 cents, a red line marker for price gouging,” said Consumer Watchdog Liza Tucker. “It reported per gallon profits off California gas at 36 cents, a reasonable profit in line with what the refiner earned here for the last 20 years. Meanwhile margins elsewhere remained high.

SEE ALSO:

“The threat of a legislative penalty on gasoline price gouging that Governor Newsom called for appears to be reining in gas prices in California already,” said Tucker. “Clearly, California lawmakers should enact that penalty.”

Consumer Watchdog has called for 50 cents as a demarcation line on profits per gallon above which refiners will pay a penalty. SBX 1 2, introduced by Senator Nancy Skinner (D-Berkeley) will set a penalty on California refiners when gas prices and the profits refiners make per gallon off consumers become abnormally high. The legislature has yet to set a profit level for the penalty.

Five refiners control California’s gasoline market by making 97% of the state’s gasoline. They usually report higher profit margins per gallon of gasoline for the US West Coast than any other region in which they operate, said Tucker.  Valero’s 4th quarter profits were the first indication the price gouging penalty has impacted the companies’ policies. In addition, November and December gasoline prices in California were more in line with the typical spread between average US and California prices of a little more than a dollar.

“Just raising the price gouging penalty has significantly curbed Valero’s profit taking in California and made gasoline more affordable for Californians and in particular the most vulnerable in the state who were paying as much as 20% of their after-tax income for gasoline,” said Jamie Court, President of Consumer Watchdog. “Imagine how much Californians will save once a penalty is enacted.”

Valero tripled its fourth quarter profits to $3.1 billion from $1 billion. But Valero reported West Coast refining margins per barrel—the difference between what crude oil costs a refiner compared to the wholesale charge for the finished product—that were the lowest among its regions of operation.  Since Valero only has Western refineries in California, the margins are California-specific.

Valero reported a margin of $15.43 for the West Coast, compared to $18.88 for the US Mid-Continent, $22.68 for the Gulf Coast, and $29.66 for the North Atlantic. Consumer Watchdog divides margin per barrel numbers to arrive at a per gallon profit.  That translated into a profit of 36 cents per gallon in California, 44 cents in the US Mid-Continent region, 54 cents on the Gulf Coast, and 70 cents in the North Atlantic.

In contrast, Valero bagged price gouging profits per gallon in the second and third quarters of 2022. In the second quarter of 2022, Valero reported an 83 cent per gallon profit at the pump and, in the third quarter, a 60 cent per gallon profit in the third quarter, according to Consumer Watchdog research. See refiner profit per gallon chart here.

According to Gary Simmons, Valero’s executive vice president, profits were buoyed by a continued tight market for crude. Simmons said that bad weather also interfered with the restocking that normally occurs at this time of the year. “That sets up the year nicely from the refinery margin perspective,” he said.

As it was, California’s big five oil refiners posted overall profits of $67.6 billion in the first nine months of 2022 – nearly quadruple the profits recorded for the same period in 2021. Chevron reports its fourth quarter and annual earnings tomorrow. It controls 30% of California’s gasoline market.

Gasoline prices, Oil Industry, Oil prices

Bay Area gas prices: great for consumers, a threat to independent frackers

Haven’t filled up lately? Here’s how cheap Bay Area gas is

Vallejo Times-Herald, April 13, 2020

The price of gasoline continues to tumble because of the lack of demand worldwide, bringing Bay Area prices below $2.30 a gallon.

The average price nationwide is now $1.87 a gallon, according to AAA. That’s down from $2.30 a month ago and almost a dollar below the year-ago level of $2.82.

A handful of stations in Oklahoma and Wisconsin were charging below 80 cents a gallon last week.

In the Bay Area, the cheapest prices are in the East Bay: $2.29 at some Costcos and independent stations in Concord, Oakland and Union City, according to GasBuddy. The South Bay’s lows are around $2.35, and the Peninsula’s about 5 cents more.

Farther afield, $2.19 has been seen in Sacramento and Modesto, and prices below $2 were noted near Oroville and Folsom. Across the line in Reno, you can find $1.85.

In Hawaii, which has the nation’s most expensive gas, $2.35 is available in Honolulu but Kauai stations are still charging $3.60.

Of course, few drivers can take advantage of cheap gas because of the shelter-in-place orders. Cheap crude will continue to pose a serious threat to U.S. oil companies, especially independent frackers that piled on too much debt. Rystad Energy recently estimated that 140 US oil producers could file for bankruptcy this year if oil stays at $20 a barrel, followed by another 400 in 2021.

Climate Change, Climate change denial, Federal Regulation (U.S.), Fossil fuels, Gasoline prices, Global warming, Oil producers

U.S. Senators introduce “Keep It In the Ground Act”

Repost from the Independent Journal

Bernie Sanders Announces Plan to Strangle the Booming Fossil Fuel Industry in America

By Michael Hausam, November 5, 2015
Democratic presidential candidate Sen. Bernie Sanders, center, and Sen. Jeff Merkley (l) announce new climate legislation, Nov. 4, 2015, during a news conference on Capitol Hill in Washington. (Photo: AP)

The just-introduced “Keep It In the Ground Act,” co-sponsored by Bernie Sanders, would halt new oil and gas exploration on federal lands and offshore waters. It also would terminate any existing leases that aren’t currently producing.

The bill is also sponsored by Senators Barbara Boxer (D-CA), Ben Cardin (D-MD), Kirstin Gillibrand (D-NY), Patrick Leahy (D-VT), and Elizabeth Warren (D-MA).

In an announcement at the Capitol in D.C., Sanders said that the end result of the legislation would be to make sure that:

“over 90 percent of the potential carbon emissions from oil, gas and coal on our federal lands and federal waters (would stay) underground forever.”

The motivation for the bill is to combat climate change. In Sanders’ statement at the rally, he took a shot at his Republican opponents, whom he characterized as deniers:

“But somehow — somehow! — when it comes to climate change there are massive attacks on scientists who tell us the truth about climate change. Worry less about your campaign contributions, worry more about your children and grandchildren. The debate is over.”

Of course, this bill only addresses the supply side of fossil fuels and does nothing about addressing the demand for oil and gas – other than via necessarily driving up the costs of gasoline, electricity, and others that depend on their availability.

Stopping the availability of using federal lands for fossil fuels is a key priority for the anti-fossil fuels movement.

With roughly half of the remaining unexploited fossil fuels in the U.S. being on those lands, according to Grist, the jobs and fuels from this battle will make a huge difference for groups warning about global warming, as well as people who care about cheap fuel for economic growth and prosperity.

 

Air Quality, California Air Resources Board (CARB), California Regulation, Carbon emissions, Clean fuel standard, Climate Change, Emissions caps, Gasoline prices, Oil industry lobby

California regulators restore emissions-cutting fuel rule

Repost from the Associated Press

California regulators restore emissions-cutting fuel rule

By Judy Lin, Sep. 25, 2015 5:49 PM EDT
Mary NIchols, Barbara Riordan
Mary Nichols, left, chairwoman of the California Air Resources Board, applauds after the board restored ambitious rules to cut transportation fuel emissions 10 percent within 5 years, during a hearing in Sacramento, Calif., Friday, Sept. 25, 2015. By a 9-0 vote the board restored rules requiring a 10 percent cut in carbon emissions on fuels sold in the state by 2020, despite oil industry objections that it could drive up gas prices. At right is ARB board member Barbara Riordan. (AP Photo/Rich Pedroncelli)

SACRAMENTO, Calif. (AP) — California regulators on Friday restored ambitious rules to cut transportation fuel emissions 10 percent within 5 years, a decision that gives Gov. Jerry Brown a boost for his climate change agenda.

The rules further strengthen California’s toughest-in-the-nation carbon emissions standards, but oil producers warn the changes could drive up costs for consumers at the gas pump.

The changes are expected to add a few cents a gallon to the cost of gasoline and diesel fuel in the state that already has some of the highest gas prices in the nation. The state estimates a typical commuter will pay an extra $20 to $24 in 2017, increasing to $52 to $56 in 2020.

“We are on a path to reduce our dependence on petroleum and this program is a key piece of that action,” Mary Nichols, chairwoman of the California Air Resources Board, said ahead of the vote.

Brown, a Democrat, has vowed to intensify his fight against climate change after the oil lobby helped kill a Democratic legislative proposal earlier this month to slash statewide petroleum use by half in 15 years. The board is the state’s top regulatory agency to enforce rules aimed at reducing air pollution.

Regulators voted 9-0 to re-adopt its low-carbon fuel standard, which requires producers to cut the carbon content of fuels 10 percent by 2020 to help the state meet its emission-reductions goals.

The program was initially adopted in 2009 but the reduction target has been frozen at 1 percent because of a court fight. Friday’s vote allows the state to resume its program; modifies rules in response to industry concerns about price spikes; and gives companies more credits for using renewable hydrogen and other investments to reduce pollutants.

Supporters say the program is worthwhile because it will encourage greater use of cleaner biofuels and electric vehicles, which can be cheaper to operate than those powered by gasoline or diesel.

“This puts it back on track,” Bill Magavern, policy director at Coalition for Clean Air, an environmental advocacy group, said after the vote. “We have other programs that address vehicle technologies and vehicle miles traveled, and this is the one that tells oil companies to reduce the carbon intensity of their fuels.”

Oil producers counter that the rules are unworkable and too costly. They said the standard will impact consumers as the companies try to comply with the mandate or face being shut out of the market.

Catherine Reheis-Boyd, president of the Western States Petroleum Association, which represents oil companies, said the low carbon fuel standard jeopardizes the state’s energy future and adds uncertainty.

“California motorists need to know what is coming and how these regulations will impact transportation fuels,” Reheis-Boyd said in a statement.

Unlike other rules the state has adopted requiring cleaner-burning fuel or more fuel-efficient vehicles, the standard, first proposed in a 2007 executive order from then-Gov. Arnold Schwarzenegger, calls for counting all the pollution required to deliver gasoline, diesel or alternative fuels to in-state consumers — from drilling a new oil well or planting corn to delivering it to gas stations.

In addition to tailpipe emissions, it includes factors such as whether an ethanol factory uses coal or natural gas to power production or an oil rig uses diesel fuel to drill.

Regulators are targeting transportation fuels because California’s roughly 30 million vehicles account for about 40 percent of the state’s emissions — the largest source. The rest comes from generating electricity and industrial manufacturing, as well as commercial, residential and agricultural uses.

All fuels are measured against a baseline pollution standard. If a fuel falls above or below the baseline, it generates a credit or deficit that other producers can buy and sell to meet the target.

It’s up to fuel producers to figure out how to meet the goal, whether by changing production methods, using ethanol or electric vehicles for transportation or buying credits on the market.

After the rule’s initial adoption, out-of-state refiners and ethanol companies were among those who sued, arguing that transporting the fuels into California alone made them less competitive against in-state producers. They argued the law unconstitutionally limits interstate commerce.

The U.S. Supreme Court let stand a 2013 appeals court decision upholding the fuel standard.

Opponents continue to challenge the state’s authority to regulate out-of-state production. Oil firms are also trying to block a similar standard enacted in Oregon, the only other state with a clean fuel standard.

Friday’s move to restore California’s program is not related to Volkswagen drawing international attention for violating separate federal and state rules that regulate emissions from vehicles.