By Doug Porter
Corporate greed on the part of fossil fuel companies in the era of trickle down apparently knows no bounds. If you live in California you’ve undoubtedly heard the stories about why we pay more for gasoline at the pump than elsewhere: our eco-conscious gas blend, higher taxes, yada, yada.
Research from Consumer Watchdog shows just how much these claims are exaggerated. Californians are paying more for gasoline because we’re being gouged, plain and simple.
The group points to abnormally large profits in the first quarter of 2015, with Valero, one of the state’s largest refiners, reporting $82 million in West Coast profits, compared to a $25 million per quarter average.
As the price of crude oil has been falling–it was $2.70 per gallon in March, 2014 and was $1.32 in March, 2015– the cost of refining has risen suddenly, jumping from 26 cents per gallon in 2014 to $1.32 in 2015.
From Consumer Watchdog:
Californians paid $3.6 billion more for their gasoline than the average US motorist based on the added pump price from February through May and consumption, Consumer Watchdog said.
Gasoline prices in California currently stand at $3.59 per gallon, 84 cents above the national average. “Oil companies created a shortage by selling abroad, and then shutting down refineries, and have made billions at the expense of Californians who are paying a huge premium due to the state’s low inventories,” Consumer Watchdog’s advocate Cody Rosenfield said.
In the month of December, West Coast refiners exported 2.7 million barrels, or 113 million gallons of gasoline. The exports also constituted the most exports in a quarter, ever. During the fourth quarter of 2014 oil companies exported an amount that represents almost a third of California’s current gasoline supply. Consumer Watchdog will provide the new evidence to state Senate investigators and regulators.
The exports set the stage for the price spikes that hobbled California. After record exports, refineries began shutting down at an unprecedented rate.
Oil companies continue to export significant amounts of gasoline from the West Coast. In the first quarter of 2015, despite record price spikes, refiners exported another 4.1 million barrels (172 million gallons) of gasoline, one of the top ten export quarters in history.
At 67 cents a gallon in combined taxes, including a state excise tax of 36 cents (soon to be reduced to 30 cents) and federal tax of about 18 cents, plus local sales taxes, Californians do pay more for gas than people in the rest of the nation. But this does not account for recent hikes.
The fossil fuel industry mounted a furious campaign in 2014 warning of price hikes as cap and trade was expanded to include transportation. Thus far the evidence shows the differential to be about 10 cents a gallon; a bargain considering the potential and real benefits.
The point is: yes we pay more, but we also get more in return. And dirty industry companies have been taking advantage of California consumers along the way. Even with accepting industry figures on their higher costs at face value, California drivers still shelled out an extra $860 million in March, 2015.
As is true with the big banks’ practices leading up to the most recent recession, criminal prosecutions for corporate greed fall outside accepted legal and political realities. Changing those expectations is about the only path to preventing future abuses. When prosecuting corporate wrongdoing becomes a litmus test for voter approval, then things can change.
Why I Like Sen. Bernie Sanders
Photo by DonkeyHotey 
No, I’m not endorsing him, or anybody at this point. However, I do love his attitude towards the media, which is to refuse to play games. He’s terrific at turning gotcha questions into actual positions…. of course, that’s easier to do when you have the advantage of not having to answer questions about your pantsuit and hairstyle.
From the Los Angeles Times:
Sanders avoided much of the bait reporters threw his way Thursday morning. He did not attack Clinton’s character or her finances. Asked about the huge speaking fees she and her husband accepted over the past year and a half, Sanders said he was more troubled that any organizations were paying those kinds of fees. He then pivoted to a polemic on the billionaire Koch brothers, who back conservative causes.
When it came to Clinton’s policy positions, though, he could be merciless. He suggested that her refusal to take a position on the controversial Pacific trade agreement being deliberated in Congress is bewildering. Most progressives are imploring Congress to block the deal the Obama administration is negotiating.
“I don’t understand how on an issue of such huge consequence you don’t have an opinion,” Sanders said.
The Vermonter said he would like to see more than the planned six Democratic primary debates — but he said they shouldn’t just be debates of Democrats. Get Republican contenders on the same stage too, he suggested.
“It’s a good idea to have a group of Democrats and a group of Republicans,” he said. “I think the Republicans, frankly, have gotten away with murder. I think people really do not know what their agenda is.”
San Diego Slime Patrol
The 2012 election is back in the news, with Dorian Hargrove at the Reader reporting on an investigation by the San Diego Ethics Commission into illegal campaign contributions by Advantage Towing. It seems as though the company’s decided to block the investigation by refusing to comply with requests for financial records.
From the Reader:
…Aymen Arakat, through his company Advantage Towing, directed employees to contribute the maximum donation allowed ($500) to the mayoral campaigns of district attorney Bonnie Dumanis, Carl DeMaio, and Nathan Fletcher. Arakat subsequently cut checks to those employees, reimbursing them for the donations. There were 15 alleged violations.
The mayoral election in 2012 had more than one alleged campaign-fund laundering scheme involving San Diego’s district attorney and other candidates: in November 2014, Ernesto Encinas, a former San Diego police detective, was accused and later pleaded guilty to funneling hundreds of thousands of dollars for Mexican businessman José Susumo Azano Matsura to political candidates’ campaign accounts.
Dumanis’s mayoral campaign was tied to another campaign violation: a second tow company, Escondido’s NK Towing and Roadside Services, and it’s owner Amir Iravani, was also fined for reimbursing employees for their maximum contributions to her campaign.
The Commission has petitioned a judge force the company to turn over the requested documents.
Photo: Yelp via the Reader
Civiv SD’s Gravy Train Running Full Speed Ahead
There may be lawsuits and controversy over the legality and propriety of Civic San Diego’s role in local redevelopment, but that hasn’t stopped the City from giving the group more money to spend.
Once again we turn to Dorian Hargrove at the Reader:
On June 8, the city council approved Civic San Diego’s $7.445 million budget for the coming fiscal year, a 10 percent increase from the current year budget. Nearly half of that money, $3.6 million, is paid from the Redevelopment Property Tax Trust Fund…
…In addition to the bump in operating expense, Civic San Diego staff now have the authority to ask the city for “advances” to pay for permitting and “non-permit-related” services. According to the budget report, revenue from permitting is expected to raise over $1 million per year. However, nowhere in the staff report was there any mention of how and when any advances would be repaid.
So what we have is an agency whose basic legality is in question, whose decisions are not subject to any direct review and whose actions have shown that it doesn’t really give a damn about public input, getting both a budget increase and a line of credit.
That’s sooo San Diego.
The Muck is Getting Murkier
Before I sign off for the weekend I need to point to three stories readers should keep in mind. All of them point to troubles in the local plutocracy; what these tidbits actually mean remains to be seen.
From UT San Diego:
Mark Leslie, chief executive of the San Diego County Taxpayers Association, announced Thursday that he’s leaving after one year at the helm of the nonprofit government watchdog group.
The SDCTA has long served business interests in San Diego by providing a neutral appearing platform to generate consent for programs aimed at increasing the wealth of the local oligarchy. It’s also essentially a farm team for local right-wing political interests; newly ensconced City Councilman Chris Cate cloaked himself in the aura of its legitimacy to convince voters of his experience.
So, when the CEO of the group leaves suddenly, it’s indicative of internal troubles.
***
The downtown crowd has changed its tune about what is to be done about the Convention Center.
From Voice of San Diego:
Not that long ago, any suggestion that the city could expand the Convention Center with a separate building across the street or farther away was met with derision from boosters and city leaders who were committed to a contiguous facility.
Now the mayor’s point man on the expansion project and the current chairman of the Convention Center Corp., Steve Cushman, is signaling he’s changing his mind. At the same time, a new study is going forward that may show an offsite campus is best for the customers the Convention Center wants to attract.
It’s a slow-motion flip of prevailing opinion of downtown boosters and city leaders that could have major implications for the future of the waterfront.
Cushman was cast as the devil by Chargers’ point man Mark Fabiani a few months ago as the mayor assembled the Stadium Advisory Group. And while Cushman ultimately was excluded from the group, this tension was indicative of the competing interests of two groups. The split facility Convention Center proposal bandied about was one of the vehicles making construction of a downtown stadium possible.
The Chargers organization wanted it; the Convention Center (mostly hoteliers) people didn’t. Now it appears San Diego could end up with no stadium and no convention center expansion. And Cushman’s had a change of heart.
***
From Cory Briggs via Voice of San Diego:
There’s political gold to mined in an op-ed from the environmental attorney most hated by City Hall.
Whether it’s [City Councilman Scott] Sherman blaming my clients for the political decision to take downtown off the table, or the Lincoln Club accusing Mark Fabiani of somehow tricking the mayor, or Council members blaming the Convention Center board for the $14 million Fifth Avenue Landing waterfront lease debacle … all of these tortured distractions can be traced to a common source: downtown waterfront hoteliers and their entourage. And they are succeeding.
Our politicians seem to have opted for proposals that would make local residents pay, rather than making visitors pay, for the public’s share of a new stadium. They are making this choice even if it means losing the Chargers.
Why are they doing this? Hoteliers believe that every guest dollar should land in no pocket other than their own. That’s why they opposed a transient occupancy tax increase a decade ago, that’s why they’ve been fighting to take over the Convention Center and that’s why they are opposed to a joint-use facility downtown.
I have long thought the delays and political angst over getting on with building (or not) a new football stadium/convention center expansion was really about competing real estate interests.
I’m not saying who (if anybody) are the bad guys here, or even if there are even bad guys here. But I do know who’s funded or supported just about every bit of reactionary politics in San Diego.
Stay tuned and hold on to your wallets.
On This Day: 1963 – Civil rights leader Medgar Evers was fatally shot in front of his home in Jackson, MS. 1967 – State laws which prohibited interracial marriages were ruled unconstitutional by the U.S. Supreme Court. 1981 – A Major League Baseball strike began, forcing cancellation of 713 games. Most observers blamed team owners for the strike: they were trying to recover from a court decision favoring the players on free agency.
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Doug Porter
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By my count this is the 4th illegal contribution to Dumanis. Anyone else see a pattern? They are suppose to fear the power of the DA, not buy the power!
Great story on the gas gouge..now what do we do?
What to do about gas prices? Boycott one company at a time. The impact is more immediate. The targeted company will be forced to lower its prices to attract drivers. Start the boycott with whatever major company prices its gasoline highest, so that the fall in business can be tied directly to the boycott’s effects.
Nothing against Mr. Porter but this story is not new. And nothing against Mr. Dorn, but the same tactic has been proposed before. But, we still have the same high gas prices.
The answer is for our state attorney to FINALLY take some action against these companies that have repeatedly and continually overcharged California consumers.
I have an interesting idea; increase supply in California. That’s one time-tested way of driving down prices
The supply is, as the article implies, artificially suppressed. I’ll bet what you’re really wanting to say is that we should eliminate all these pesky environmental constraints. Sorry, bubba, it ain’t happening except maybe in that libertarian paradise called Somalia.
Unfortunately our criminal justice system ignores this kind of avarice.
The only parties that can increase the supply are those oil companies that control it. And — surprise! — they want exactly the opposite; they want the limited supply that they have created. Duh.
Brian, which large government agency would you order to enforce this increase in supply?
Nationalize the oil industry in California to teach oil companies they will forfeit everything because they love screwing the California motorists