LOS ANGELES—Here in the land of perpetually jammed freeways, filling up downtown sets you back $5.09 a gallon. While the national average price for a gallon of gasoline is $3.36, you’d be hard pressed to find anything cheaper than $4 in L.A.
Californians are used to paying some of the highest energy prices in the country, especially in this sprawling city. Not coincidentally, they’re also living in the state most committed to combatting climate change, slashing fossil-fuel consumption, and ramping up renewable energy.
There appear to be some cracks in the organization’s armor. Fueling California’s board of directors once included representatives from United Airlines, Walmart, UPS, Chevron and others. But Fueling California’s website no longer lists the board of directors at all, and Walmart confirmed it is no longer involved.
Through June of this year, Big Oil has spent over $5 million on lobbying California policy-makers (and no, that doesn’t include donations to political campaigns). The Western States Petroleum Association (WSPA is the lobbying organization for California oil interests) spent over $20 million since 2009, and is again leading all spending to influence California politics, and Chevron isn’t far behind (see news coverage, here and here). Given the major oil lobbying push in the Capitol at the end of the legislative session in early September, it will not be a surprise if this trend holds.
Over the past two years, California gas prices have continued to soar, sparking some of the highest prices in the nation.
Oil companies are quick to point the finger at supply and demand, oil markets or the state’s clean air laws as causes for recent spikes, but don’t be fooled. These reasons merely serve as smokescreens to a much larger problem facing consumers at the pump – potential price manipulation.
However, for those concerned about gasoline following the oil price spike over the past few days, there’s possible relief in sight.
Ask Adm. Samuel Locklear III, commander of the U.S. military’s sprawling Pacific Command, what his most serious threat is, and you might be surprised. There’s a long list of possibilities, after all: North Korean nukes, rising Chinese military power and aggressive cyberespionage, multiple territorial disputes between major powers and persistent insurgencies from the Philippines to Thailand, not to mention protecting some of the world’s most vulnerable shipping choke points. Add all of that up, though, and there’s something even more dangerous to keep even the most seasoned military officer up at night: the looming disaster of climate change.
One year ago Tuesday, a fire at Chevron’s Richmond oil refinery sent black smoke wafting across the East Bay.
Contra Costa Health Services asked residents to stay in their homes, close the windows, and wait it out. About 11,000 people sought medical treatment. Many suffered from eye, nasal and throat irritations that were short-lived. For those with pre-existing asthma and chronic obstructive pulmonary disease, their cough and shortness of breath increased dramatically, sometimes for extended periods.
This refinery fire was a dramatic demonstration that air pollution is bad for our health. A more compelling concern is the evidence that chronic, low-level exposure to air pollution has serious long-lasting adverse effects, including stunting of lung growth and increasing asthma among children, premature death in those with chronic lung diseases, and heart attacks.
The U.S. oil market is well supplied, with U.S. commercial crude oil inventories near all time highs, with production of U.S. oil increasing by some million barrels/day from a year ago, with weekly inventory of gasoline jumping by 800,00bbls equivalent last week alone, while Chinese demand is flat to down and the risks to Suez canal transit have abated. Yet the price of oil has jumped by some 9.5 percent over the last thirty days. This while virtually all basic commodities have gone down in price significantly.
How do I know the price of oil is rigged? I don’t, and that is the problem. There is no transparency whatsoever in the trading of oil on the commodity exchanges. We don’t know who is taking positions and for whose account. Are the oil companies themselves directly or indirectly, or the sovereign wealth funds of oil-producing nations with their billions upon billions of invest-able capital pushing up prices by buying oil derivatives ? Trading on the Exchanges, including such as the New York Mercantile Exchange or the Atlanta ‘ICE’ in oil futures/derivatives has exploded exponentially whereby paper barrel contracts dwarf actual oil production by a factor of thirty to one, I repeat, 30 to 1. (“Policy Brief #25 United Nations Conference On Trade and Development” 09.12)
Summer is under way, with its barbecues, parades, beach trips – and higher gas prices. And Angelenos recently found themselves paying a dizzying 11 cents more for every gallon – in an area that already ranks among the top five in the nation for high gas prices.
As a business owner who operates an all-natural gas fleet, we will avoid the fluctuations of summer gas prices, but our customers will feel the impacts.
Meanwhile, with $44 billion in profits last year, the oil companies’ grip on the industry affects our personal savings and business operations, and the nation’s economy. To be sure, gas prices rise and fall for many reasons, but one dangerous constant is that here in California, in particular, large oil companies are increasingly consolidated, reducing competition and generating concerns that consumers have ever-fewer defenses.