By Doug Porter
The higher prices Californians pay for gasoline was the focus of a hearing chaired by San Diego’s Sen. Ben Hueso this week.
A report issued by the Consumer Watchdog group alleges consumers were gouged for an extra $550 million at the gas pump during February as the result of a strategy by refiners to keep inventories artificially low. The group came to this conclusion by calculating the difference between US and state prices and allotting for consumption.
Members of the transportation, housing and energy, utilities and communications committees questioned energy industry executives about recent price spikes in California. Earlier this week Californians were paying 84 cents more per gallon than the rest of the nation for their gasoline.
The report, “Price Spiked: How Oil Refiners Gouge Californians On Their Gasoline and What It Costs,” looked at ten years of data, finding that the normal differential –influenced by a state-mandated environmentally cleaner blend– was 32 cents per gallon.
Among Consumer Watchdog’s other findings were:
- While the rest of America averaged 18 days of gasoline supply in refineries and bulk terminals, California refiners only kept 10.7 days of gasoline supply on hand (48% less) – making the system vulnerable to price spikes when refineries experienced problems, as two refineries did recently.
- Generally, gasoline prices in California have spiked as days of supply on hand (inventories) have dropped. State gasoline price spikes over the last ten years are typically precipitated by major refinery problems.
- Refinery consolidation, identified as a source of higher prices in the 1999 California Attorney General Gas Pricing Taskforce’s report, has worsened with two refiners – Chevron and Tesoro – controlling 55% of the market. Four refiners control 76% of the market.
- Lack of transparency about refinery outages and real time information about inventories, which lags by 3 months, makes it difficult for policymakers and regulators to take action when events occur.
- Chevron, the largest refiner in the state, saw steep increases in its profits from downstream operations (refining, marketing and transportation as opposed to drilling and crude oil operations) that mirrored many of the gasoline price spikes. Chevron’s profits were escalating in the fourth quarter of 2014 even as gasoline prices fell– suggesting a huge windfall for the company from the latest gasoline price spikes.
From the Los Angeles Times:
“This system is made to break because oil refineries keep it running on empty,” [ Watchdog President] Jaime Court testified. “They have every incentive to create a price spike like this.”
Kathleen Foote, who heads up the antitrust division at the California attorney general’s office, agreed that the industry operates like an oligopoly in the state. But proving price fixing is difficult in a field where only a few players exist, she said.
Even Nurses Have a Gender Pay Gap
A report in the journal of the American Medical Association found the pay gap between women and men includes the nursing profession, even though nine out of 10 nurses are women.
The study says the typical salary gap over the past 25 years has consistently been about $5,000 annually, even after adjusting for factors such as experience, education, work hours, clinical specialty, and marital and parental status.
From Reuters, via Huffington Post:
“Nursing is the largest female dominated profession so you would think that if any profession could have women achieve equal pay, it would be nursing,” said lead study author Ulrike Muench from the University of California, San Francisco.
Muench and colleagues used two large U.S. data sets to examine earnings over time. One, the National Sample Survey of Registered Nurses, provided responses from nearly 88,000 participants from 1988 to 2008. The other, the American Community Survey, offered responses from nearly 206,000 registered nurses from 2001 to 2013.
CA Legislative Women’s Caucus Takes Aim at Pay Equity
A legislative package targeting pay equity on the job, expanding access to child care, creating family-friendly workplaces and addressing poverty was announced by Speaker Toni Atkins and Democratic members of the California Legislative Women’s Caucus at a press conference yesterday.
From the Los Angeles Times:
The half-dozen bills include a measure by Sen. Holly Mitchell (D-Los Angeles) that would repeal a rule for the state’s CalWORKS system that prohibits additional aid for a child born into a family already receiving assistance from the welfare system…
…The caucus members also backed legislation by Assemblywoman Shirley Weber (D-San Diego) that would require food and retail employers with more than 500 workers to provide work schedules at least two weeks in advance and would require additional pay for last-minute changes. Weber said AB 357 would provide “considerable stability” for workers who have to schedule around other commitments and arrange child care ahead of time.
Sen. Hannah-Beth Jackson (D-Santa Barbara), the caucus chairwoman, has introduced legislation aimed at closing the pay gap between men and women. SB 358 would strengthen protections against pay discrimination and retaliation against workers who make inquiries about pay.
I guessing the California Chamber of Commerce will be listing most of this legislative package on their ‘job killer’ list, meaning these bills are likely dead on arrival. In recent years the Chamber has bragged about having a near-perfect record at scuttling legislation dealing with improving working conditions and workplace safety.
What Could Go Wrong?
The Washington Post reports there is an emerging bi-partisan consensus about privatizing the Federal Aviation Administration’s air traffic control division.
House legislators are upset because the FAA has failed to upgrade its systems from a radar to a GPS basis, via a $40 billion program called NextGen promising to revolutionize air travel in the United States.
Part of the reason the program hasn’t been implemented might have to do with congressional squabbling leading to a federal shutdown of the agency two years ago and mandated cuts due to sequestration.
So in keeping with the GOP’s governing philosophy, having rendered an a government agency ineffectual by legislative wrangling and interference, it’s time to privatize. Or better yet, make it a separate corporation like the Post Office, so they can kill it with a thousand cuts…
It’s just another step along the road towards the libertarian dream… In a couple of decades we’ll see credit card readers on the of back seats in coach [the price will be included in first class] so passengers can bid on take off and landing slots.
Mexican Farmworkers Strike Getting Serious
The Los Angles Times reports that agribusiness owners have agreed to negotiations with striking farmworkers in Baja California.
At stake is one of Mexico’s biggest harvests — millions of tons of berries, tomatoes and cucumbers that are exported to the United States. Some shortages have been reported, and Mexican police arrested more than 200 people after protests devolved into riots, rock-throwing and vandalism last week.
Bracing for more unrest, business owners this week boarded up shops and restaurants in San Quintin and nearby towns, and more than 1,000 police and army soldiers have spread across the region 200 miles south of San Diego. Mexico’s National Commission for Human Rights sent observers after protesters complained of unlawful arrests and police mistreatment.
The willingness of owners to negotiate comes as strike leaders are preparing to up the ante, according to Tom Philpott at Mother Jones:
… the strike’s organizers plan to launch a campaign to get US consumers to boycott products grown in the region, mainly tomatoes, cucumbers, and strawberries, inspired by the successful ’70s-era actions of the California-based United Farm Workers, headed by Cesar Chavez, La Jornada reported Tuesday. And current UFW president Arturo Rodriguez has issued a statement of solidarity with the San Quintín strikers.
Taxi Owners Fight Move to Free Up Permits
KPBS reports taxi cab owners have united around taking legal action against the Metropolitan Transit System’s decision to left the cap on the number of permits issued in the San Diego market.
The cab companies claim the move violates the California Environmental Quality Act because the city, which contracts with MTS to manage the taxi industry, didn’t complete an environmental review before allowing more smog-producing cabs on the road…
…Councilwoman Marti Emerald, who led the effort to open the market, said many of them already drive San Diego streets in leased taxis. She said she expects the industry to “go through some growing pains” but it won’t see a huge net gain in the number of cabbies on the road. She also said new permit holders could mean new low-emission vehicles to replace older taxis.
The complaint’s focus on California’s strict environmental rules could be strategic. Buried at the end of the complaint is an allegation the change is unconstitutional because the city took cab companies’ property without compensation. They’re referring to taxi permits bought for an average of $120,000 that will lose their value when the city lifts its permit cap.
SEIU Head Start Workers Head Out the Door
Members of the Service Workers International Union called a one day picket line for Tuesday, prompted by stalled contract negotiations with the Metropolitan Area Advisory Committee (MAAC), an anti-poverty group which operates North County’s Head Start Program.
More than 200 workers walked the line in San Marcos after year long contract talks came to a standstill over health insurance costs. SEIU members say proposed increases will effective drop pay below minimum wage for some workers.
The union has filed unfair labor charges against MAAC, claiming management has threatened employees with termination, intimidated a member of the bargaining team and unlawfully surveilled protected union activity.
Adela Martinez, who represents the San Diego MAAC union members, said management is not negotiating fairly. “I can only hope that I continue to work at MAAC as a proud MAAC employee and proud union employee. That they come and bargain a fair contract with us,” she said.
MAAC President and CEO Arnulfo Manriquez said the nonprofit offers a good benefits package, and the strike is really about longtime employees fighting organizational evolution.
“When you look at the people that have been here for the longer time, that’s where the challenge comes in and where the resistance to change occurs,” Manriquez said.
Head Start programs are continuing during the labor dispute, and no walkout has been called. Both sides say MAAC has never had a labor problem like this in its 50-year history, and they said they hoped to return to the negotiating table.
On This Day: 1894 – The first “Poor People’s March” on Washington occurred. Jobless workers demanded creation of a public works program. Led by populist Jacob Coxey, the 500 to 1,000 unemployed protesters became known as “Coxey’s Army.”
<—1911 – 146 women were killed in fire at the Triangle Shirtwaist Company in New York City. The owners of the company were indicted on manslaughter charges because some of the employees had been behind locked doors in the factory. The owners were later acquitted and in 1914 they were ordered to pay damages to each of the twenty-three families that had sued. 1963 – The Beach Boys released the album “Surfin’ U.S.A.”
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We always knew the gas price differential was artificially inflated. Now – finally! – concrete evidence; it’s about time.
Missing from this report of the report: what can be done about it?
Gary Leon says
The first big lie in Economics 1A….”It’s a free market based on supply and demand.”
There’s no mention that the supply is almost always controlled by greedy rat-bastards!