20+ Groups In California Call Out Oil Refiners Profits, Seek Penalty By Summer

  • Published on March 20th, 2024

A coalition of over twenty public interest groups exposed new state data showing that California oil refiners averaged more than $1 per gallon in gross profits during 2023 and called on the California Energy Commission to adopt a price gouging penalty by summer.

A coalition of over twenty public interest groups exposed new state data showing that California oil refiners averaged more than $1 per gallon in gross profits during 2023By Dan Bacher

The data on excess profits was revealed after a year when Big Oil spent more money on lobbying in California than any other year on record besides 2017. Big Oil spent $25,445,606 on lobbying in California in 2023 and $25,445,606 in 2017.

Today, the CEC will hold a  Pre-Rulemaking Workshop on a price gouging penalty as directed by SBX1 2, according to a press statement from Consumer Watchdog.

“California’s oil refiners reported to the Energy Commission that their average gross refining margin from selling gasoline in the California gallon in 2023 was $1.01 per gallon,” the groups wrote to the commissioners and Governor Newsom.  “A buck per gallon is too much for oil refiners to take for profit and overhead when working people have to choose between paying for food and filling up.

“California oil refiners reported to their investors that their operating and other costs of running their refineries are between 20 and 30 cents per gallon. California oil refiners are keeping between 70 and 80 cents off every gallon of gas sold as pure profit….The buck stops this summer.”

The groups signing the letter include: the Asian Pacific Environmental Network, Center for Biological Diversity, The Center on Race, The Climate Center, Poverty, and the Environment, The Climate Alliance of Santa Cruz County Climate First: Replacing Oil & Gas, Consumer Watchdog, Consumers for Auto Reliability and Safety, Elected Officials to Protect America – California, Environmental Working Group, Friends of the Earth, Gemini Energy Solutions, Glendale Environmental Coalition, Long Beach Gray Panthers, Mothers Out Front, Oil and Gas Action Network Oil Change International, RootsAction.Org, San Francisco Bay Physicians for Social Responsibility, Santa Cruz Climate Action Network, Stand.Earth, Sunflower Alliance, and Working Families Party.

“It’s been nearly a year since the Governor signed landmark legislation for a price gouging penalty in a special session, it’s time the California Energy Commission delivered on a rule implementing the law before summer when gas prices are expected to spike again,” said Jamie Court, president of Consumer Watchdog.

The group posted this “Consumer Alert” video as part of its “The Buck Stops This Summer” campaign, calling for the public to reach out to the Energy Commission for action. Consumer Watchdog noted that two oil refineries in Northern California are expected to go off-line this summer, creating potential for a huge gasoline price spike.

“The greed of California oil companies is hitting frontline communities the hardest. Californians are paying with their health, their air, and their wallets,” said Connie Choe, Just Transition Policy Strategist of Asian Pacific Environmental Network. “Meanwhile, oil refiners continue to hike up prices at the pump and slow progress to combat climate change for their own benefit. Implementing a price gouging penalty is integral to ending greedy oil prices, and protecting frontline communities from taking another hit.”

“Big Oil has been dishonestly raising gas prices and gouging billions from everyday Californians to enrich their billionaire CEO’s and shareholders,” said Jane Kim at California Working Families Party. “Meanwhile, working families are feeling the pinch. The California Energy Commission must step in to hold Big Oil accountable and protect Californians from being exploited by enacting a price gouging penalty. Implementing a cap on gas profits is critical to curb oil executives’ profiteering.”

According to the groups, “As summer approaches, Californians brace themselves for the annual uptick in gasoline prices, heightening concerns over affordability. With the cost of fuel climbing, there’s a pressing call for safeguards against price gouging to ensure that essential expenses remain manageable. For many, the dilemma of choosing between filling up their tanks and putting food on the table underscores the harsh economic realities faced by households already struggling to make ends meet.”

“Everywhere Californians go, they are seeing inflated prices, but nowhere worse than at the gas pump,” said Bill Allayaud, California Director of Government Affairs for the Environmental Working Group. “And the gas gouging started before the current round of rising prices on other essential consumer goods and electricity costs. We really need the Energy Commission to come through for consumers with a sense of urgency.”

Chevron and Western States Petroleum Association top 2023 California lobbying with $18.1 million

Why has Big Oil been able to get away with what it does in California for decades? It’s because of the inordinate influence of Big Oil on California politicians and regulators.

Big Oil spent more money on lobbying in California in 2023 than any other year on record besides 2017. Big Oil spent $25,445,606 on lobbying in California in 2023 and $25,445,606 in 2017, according to the research team at Sunstone Strategies in their “Crude Truth” newsletter.

The group analyzed the California lobbying filings of every registered oil company in California, in putting 2023 trends into the context of industry lobbying for the past 20 years dating back to 2004. While in an earlier report on oil spending I used the raw data on fossil fuel spending from the filings on the California Secretary of State’s website, the newsletter used a slightly different methodology.

“Topping the lobbying spending charts in 2023 was Chevron, the second biggest oil producer in the state and the leading crude oil refiner. Trailing at number two: its trade association, the Western States Petroleum Association (WSPA),” wrote Sunstone Strategies.

“The two combined spent $18.1 million in 2023 — more than 71% of the industry’s total $25.4 in expenditures for 2023. Aera Energy, California’s top oil producer and a former joint venture of Exxon Mobil and Shell, placed in a distant third for 2023 lobbying spending,” they said.

However, in the fourth quarter, “WSPA and Chevron exchanged the number one and number two spots as the top lobbying spenders. Their expenditures totaled $2.8 million, accounting for over 60% of Big Oil’s quarterly spending total. Trailing in third was ExxonMobil, spending over $243,000 in lobbying for the quarter.”

The report also revealed that the state’s five major refiners, including Valero, PBF Energy, Marathon Petroleum, and Phillips 66, spent over $2.5 million on 2023 lobbying and influence activities.

Since 2009 I have documented how WSPA and the oil companies wield their power in 8 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups; (5) working in collaboration with media; (6) sponsoring awards ceremonies and dinners, including those for legislators and journalists; (7) contributing to non profit organizations; and (8) creating alliances with labor unions, mainly construction trades.

About the Author

Dan Bacher is an environmental journalist in Sacramento who focuses on California's water issues, a healthy environment for the salmon fishery of the Northwest, and the attempts by big agriculture and big oil to hog all the water.

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