Democrats out of California have started to demand answers from the various gas companies for the still escalating prices for gas, calling out gas and oil producers and refiners for hiking prices far more than necessary in order to create more profits.
“Here are the facts: Crude oil prices are DOWN. And yet…gas prices are up. That’s because greedy oil companies are ripping you off,” expressed California Governor Gavin Newsom via a social media post this past Thursday, stating that he now had plans to increase taxes against oil companies in response to the price spiking. “They are raking in record profits at your expense. I’m calling for a new tax on these corrupt oil companies to put money back in your pocket.”
David Hochschild. the chair of the California Department of Energy, issued demands for answers from industry leaders, stating via social media, “Last week I asked the oil industry for answers about the recent gas price spike placing an unacceptable burden on Californians. Maintenance alone cannot explain a sudden $1.54 increase in what refineries charge for every gallon of gas.”
Last week I asked the oil industry for answers about the recent gas price spike placing an unacceptable burden on Californians
Maintenance alone cannot explain a sudden $1.54 increase in what refineries charge for every gallon of gas
My full statement ➡️ https://t.co/Z5IXvKgySa pic.twitter.com/jytPr7vXQj
— David Hochschild (@ChairHochschild) October 6, 2022
Valero Energy, based out of Texas, shot back a response — with just a single day left on the deadline set — and put forth a laundry list of reasons that attempted to express just how much more difficult it was for any energy company to step in and serve the markets of California.
NEW: VALERO responds to California’s demand for answers recent gas price spike.
“As demanded with one business day to respond…”
“California is the most challenging market to serve in the United States for several reasons.” pic.twitter.com/r2T2UQleme
— Ashley Zavala (@ZavalaA) October 8, 2022
“For Valero, California is the most expensive operating environment in the country and a very hostile regulatory environment for refining,” stated the Vice President of State Government Affairs, Scott Folwarkow, via a letter. “California policy makers have knowingly adopted policies with the expressed intent of eliminating the refinery sector. California requires refiners to pay very high carbon cap and trade fees and burdened gasoline with cost of the low carbon fuel standards. With the backdrop of these policies, not surprisingly, California has seen refineries completely close or shut down major units. When you shut down refinery operations, you limit the resilience of the supply chain.”
Folkwarkow went on to try and explain that California had forced a special fuel blend that was not available for use in most other parts of the country — meaning that it had to be specially created and during times of shortages, additional supply could not just be sent in from other areas.
“From the perspective of a refiner and fuel supplier, California is the most challenging market to serve in the United States for several reasons,” he explained, adding, “California has imposed some of the most aggressive, and thus expensive and limiting, environmental regulatory requirements in the world. California policies have made it difficult to increase refining capacity and have prevented supply projects to lower operating costs of refineries.”
Folwarkow ended his statements by issuing a warning to the state that further regulations and taxes — of the type highlighted by Newsom — would only make the ordeal worse for the people.
“We believe the Commission experts understand that California cannot mandate a unique fuel that is not readily available outside of the West Coast and then burden or eliminate California refining capacity and expect to have robust fuel supplies,” he stated. “Adding further costs, in the form of new taxes or regulatory constraints, will only further strain the fuel market and adversely impact refiners and ultimately those costs will pass to California consumers.”