Politicians are fiddling while motorists burn through their budgets. The federal government’s weekly gasoline report shows national prices up another dime last week, to $2.671 for regular and California at $3.228, nearly 56 cents above the national average. Today, in real time, AAA has California at $3.268. Where are the investigations, the subpoenas, the regulatory action?
The mainstream media are showing some open skepticism about oil company excuses, given that gasoline prices are far outpacing oil. Here’s the Oakland Tribune recounting the excuses of oil companies for their profiteering.
If federal officials remain inert, states must act. In California, Atty. Gen. Jerry Brown can keep his populist credibility with a tough investigation of this spring’s unusual refinery shutdowns. Why the extra level of “scheduled maintenance?” And why should anything that’s "scheduled" cause a price jump anyway?
When one refinery had a fire, shouldn’t others postpone their “maintenance,” as the refiner Valero finally did when pointedly asked to do so by the California Energy Commission? (The request, however, was too little and too late).
What the oil companies are doing may be legal, which means only that laws and regulations must be changed to respond to a breakdown of the supply-demand equation. That’s government’s job.
Even the cautious industry watchers of AAA are openly skeptical. "The energy companies like to point to supply and demand, and while these are legitimate forces, they only tell part of the story," AAA’s Sean Comey told the Tribune. "Nobody likes to talk about their large profits and how that impacts what we pay."
What Comey could have gone on to say is that the oil companies control—and suppress—the supply of gasoline by restricting and manipulating refinery output. As San Diego analyst Charles Langley of the consumer group UCAN quipped to the Tribune, the next thing oil companies will say is “The dog ate my refinery.”
The LA Times said in a March 23 story, “An unusually active maintenance schedule at many of California’s 14 fuel-making plants over the last few months left the state vulnerable to outages and the resulting price surge.”
Waiting and watching the oil industry do to the nation what Enron did to California’s power industry in 2000 is not an acceptable political response.