by Warren Beatty, American Thinker:
Just when you think California didn’t have enough foot left to shoot, it pulls out a gun and does it again. This time it involves the initial step toward California nationalizing the gasoline refinery industry. The California Energy Commission (CEC) has proposed several government regulations of the petroleum industry in order to combat future gasoline price surges. CEC regulators announced proposed government controls of the petroleum industry, ostensibly to combat future gasoline price surges. CEC’s proposed fiasco is unbelievable since it has a clear vision of the ultimate outcome: Venezuela.
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The CEC announcement comes as Chevron, one of the largest oil companies in the U.S., announced that it will relocate its operations to Houston, Texas, is moving out of San Ramon, California. Its decision to leave follows years of aggressive environmental policy making from Democrats that hurt the company’s business.
The CEC report is laughably called “Transportation Fuels Assessment: Policy Options for a Reliable Supply of Affordable and Safe Transportation Fuels in California”. It’s laughable because the report title includes the word ‘Affordable.’
The report begins with this ‘justification‘: “The deployment of ZEVs [zero-emission vehicles] and a robust mass transit system are critical for achieving the state’s climate goals, reducing local air pollution, and eventually eliminating dependence on the volatile global petroleum markets. As demand for gasoline shrinks, refineries may close or convert to processing clean transportation fuels.”
Here’s the clincher: “This will lead to fewer gasoline refineries, with increased market concentration and associated market problems that often accompany it… Like most product prices, gasoline prices should ideally obey the laws of supply and demand. However, supply dynamics in California’s transportation fuels market differ from many other markets in the United States.”
CEC expects some of California’s nine oil refineries to be shut down due to decreased demand, thus giving the remaining open refineries increased pricing power that would increase the possibility of a sharp escalation in gas prices. CEC therefore maintains prices must be managed by the government.
CEC proposals include:
The State of California would purchase and own refineries in the state to manage the supply and price of gasoline with the scope of the initiative ranging from ‘one refinery to all refineries in the state.’
During times of lower gas prices, fees would be levied in a variable manner to then allow for stabilization initiatives during California-specific price spikes.
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