Replies

Nearly everything cost more in California than Texas.

Yep, because in addition to taxes, nearly every industry and supplier here uses energy that costs more, from production costs and transportation to what they have to pay their employees to live here.

This isn’t just a function of the refining industry.

You don't (with any honesty0 have the rhetorical luxury of claiming that gasoline is a uniform commodity and that differences in pricing are because of other factors than production costs, because the product isn't close to being equivalent from place to place, if only because of its alcohol content. Please explain why else my car got nearly 50% better gas mileage in Texas on 82 octane gas than in California on 87 octane gas and how that doesn't represent a higher cost in California due ONLY to formulary differences. In any place I've ever been, that represents 50% higher cost and also means 50% more gasoline sold, per mile. Gosh, if capacity was so tight, they could reformulate... Oh, wait...

You then turn around and claim that a $0.40 per gallon difference in price is primarily the consequences of non-uniform "costs" in which transportation and production costs due to fuel is somehow magically not a factor. Nor did I ever imply that taxes weren't higher here.

BTW, your comparative cost numbers between locations are bogus. Long Beach is upper crust compared to most of Houston, or most of Los Angeles for that matter. As an example of the credibility of this survey, I compared Bakersfield CA to San Antonio, TX:

Groceries will cost: 26% more
Housing will cost: 2% more
Utilities will cost: 21% more
Transportation will cost: 1% more
Healthcare will cost: 10% more

Please explain why I should regard this survey you cited as credible when it says that the costs of transportation in Bakersfield, CA and San Antonio, TX are equivalent. Even you would agree that is plainly absurd as virtually all the gasoline used in Bakersfield is trucked in from LA. I know for a fact that the last time I drove through both Bakersfield and Texas only weeks apart, that the price of gas was some $0.50 different.

After the twenty years of market racketeering in everything from knowingly putting MTBE into plastic tanks that the industry KNEW would leak, to therefore replacing TWICE all the underground storage tanks without any necessity in the first place, and thus eliminating virtually every mom and pop gas station, the mandated use of huge amounts of natural gas for the thermal oxidation for less VOC than is produced by one tree, the regulation of the timber business to the point that plastic lumber and concrete siding is economic... for you to claim this virginity in the owners of the petrochemical industry, when all of it is mandated or inflected by a legal/activist process that is heavily funded by said OWNERS of the oil and gas industry, is so far beyond credibility I don't know why you bother. I have never yet seen a government mandate for some environmental purpose that does not use more energy.

Not one. Gad, recycling alone was a huge energy scam in everything but aluminum.

Just because you don't see it from within the industry doesn't mean that this kind of influence does not exist. Nor does citing tight margins have a damned thing to do with ROI in a high volume commodity business. Nor have I ever said that the companies themselves exert this influence, although they certainly did when it came to mandating MTBE and it was hand in hand with the NRDC (David Donniger was there at the EPA meeting with no other NGO represented). The bulk of this influence is exerted by the industry's owners, and increasingly it is done through middlemen such as Tides Foundation thus to launder the influence money. That influence is becoming harder and harder to trace.

So when a refinery has a fire (and they all do from time to time), and the price spikes to the point that the fire was profitable, it is no wonder people blame the company for those market conditions because something stinks when the price jumps that much due to such an actuarially predictable cause. Had we a real free market, those inflections would be far smaller because the production impact would be more distributed and capacity not so tight.

To the latter, and contrary to your statements, Chevron did try to expand that plant and failed. Why? Environmental lawsuits. Had Chevron built that expansion, we would not see as large a spike in prices as is likely as a result of the fire. Hence, your claim that they did not need extra capacity is wrong and my contention that they could not build due to environmental groups is exactly correct. Without those lawsuits, Chevron would not see an increased cash flow resulting from its own mishap.

QED