State Department of toxic Substances Control Must Send “Strong Message” to Evergreen Oil Re-Refiner Over Repeated Safety Lapses, Accidents

Consumer Watchdog called on the Director of the California Department of Toxic Substances Control, Debbie Raphael, to indefinitely close the Evergreen Oil waste-oil re-refinery in Newark, Ca. in a letter sent today.  On July 6, a pipe leak spewed “superheated oil” and triggered an emergency evacuation of the facility.  The company and Newark police warned the surrounding community, including a nearby elementary school, to expect a wave of “strong odors” from the leak.

Read today’s letter to Raphael here

Consumer Watchdog cited repeated problems at the facility as an example of DTSC’s failure to take tough action against toxic industries that continue to operate after repeated safety violations near homes and schools in testimony and a letter presented at Debbie Raphael’s State Senate confirmation hearings in April.

The confirmation letter said several companies, including Evergreen, “appear to have manipulated or ignored the DTSC and other agencies to the detriment of concerned and frustrated local residents.”

The accident marks the latest in a string of problems at the plant that re-refines used motor oil, including a burst pipe and major fire in March 2011 and repeated citations by the DTSC for safety violations and carelessness.

“Consumer Watchdog is appalled to learn of yet another accident at the Newark-based used oil recycler Evergreen Oil,” said Liza Tucker, an advocate at Consumer Watchdog.  “We call on the DTSC to shut this refinery down indefinitely.   Evergreen needs to know that sloppy safety procedures, and refusal to fix or replace shoddy infrastructure, is simply unacceptable.”

The DTSC has let the company off the hook with consent decrees and hand-slap fines for at least a dozen years, said Consumer Watchdog.  The group called for the new leadership at the DTSC to send toxic industries a strong message that there is a new sheriff in town who won’t allow careless endangerment.

The letter sent today to Director Raphael said in part:

“Your department has repeatedly cited Evergreen Oil for cracks and gaps in waste container storage and transfer areas, failing to track contaminated petroleum waste coming in and out of the facility, careless soil contamination, and omissions in its own inspection system.

“Still, the DTSC fined this company that generates some $36 million in annual revenues less than $60,000 under six separate consent decrees between 2006 and 2011.  This practice of accepting promises that Evergreen will police itself, instead of taking the company to court, has been an abject failure. The DTSC has cited the company for failure to follow even its own simple safety procedures.

“At the same time, members of the local community say that for 25 years Evergreen has ignored federal and state laws and polluted their neighborhoods.”

The department has a special responsibility to working and middle class families in the small cities where companies produce and recycle toxics including PCBs, dioxin, and heavy metals near homes and schools, Consumer Watchdog said.  Too many of these companies have mastered the arts of delay to avoid fixing leaks, improving infrastructure, and following adequate internal safety controls.

“Evergreen Oil has proven repeatedly that it cannot be trusted,” said Tucker.  “The DTSC and other regulators need to put community safety first and show zero tolerance for such polluters.”

Consumer Watchdog has previously described problems at several hazardous waste sites, and also called for reforms at the DTSC to address a lack of transparency, a disconnect between inspection and enforcement, and a preference for weak settlements instead of more aggressive prosecution of serial violators.

Read Letter to Director Raphael

Also read Consumer Watchdog’s April 9 letter to the Senate Judiciary Committee

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State Department of toxic Substances Control Must Send “Strong Message” to Evergreen Oil Re-Refiner Over Repeated Safety Lapses, Accidents

Consumer Watchdog called on the Director of the California Department of Toxic Substances Control, Debbie Raphael, to indefinitely close the Evergreen Oil waste-oil re-refinery in Newark, Ca. in a letter sent today.  On July 6, a pipe leak spewed “superheated oil” and triggered an emergency evacuation of the facility.  The company and Newark police warned the surrounding community, including a nearby elementary school, to expect a wave of “strong odors” from the leak.

Read today’s letter to Raphael here

Consumer Watchdog cited repeated problems at the facility as an example of DTSC’s failure to take tough action against toxic industries that continue to operate after repeated safety violations near homes and schools in testimony and a letter presented at Debbie Raphael’s State Senate confirmation hearings in April.

The confirmation letter said several companies, including Evergreen, “appear to have manipulated or ignored the DTSC and other agencies to the detriment of concerned and frustrated local residents.”

The accident marks the latest in a string of problems at the plant that re-refines used motor oil, including a burst pipe and major fire in March 2011 and repeated citations by the DTSC for safety violations and carelessness.

“Consumer Watchdog is appalled to learn of yet another accident at the Newark-based used oil recycler Evergreen Oil,” said Liza Tucker, an advocate at Consumer Watchdog.  “We call on the DTSC to shut this refinery down indefinitely.   Evergreen needs to know that sloppy safety procedures, and refusal to fix or replace shoddy infrastructure, is simply unacceptable.”

The DTSC has let the company off the hook with consent decrees and hand-slap fines for at least a dozen years, said Consumer Watchdog.  The group called for the new leadership at the DTSC to send toxic industries a strong message that there is a new sheriff in town who won’t allow careless endangerment.

The letter sent today to Director Raphael said in part:

“Your department has repeatedly cited Evergreen Oil for cracks and gaps in waste container storage and transfer areas, failing to track contaminated petroleum waste coming in and out of the facility, careless soil contamination, and omissions in its own inspection system.

“Still, the DTSC fined this company that generates some $36 million in annual revenues less than $60,000 under six separate consent decrees between 2006 and 2011.  This practice of accepting promises that Evergreen will police itself, instead of taking the company to court, has been an abject failure. The DTSC has cited the company for failure to follow even its own simple safety procedures.

“At the same time, members of the local community say that for 25 years Evergreen has ignored federal and state laws and polluted their neighborhoods.”

The department has a special responsibility to working and middle class families in the small cities where companies produce and recycle toxics including PCBs, dioxin, and heavy metals near homes and schools, Consumer Watchdog said.  Too many of these companies have mastered the arts of delay to avoid fixing leaks, improving infrastructure, and following adequate internal safety controls.

“Evergreen Oil has proven repeatedly that it cannot be trusted,” said Tucker.  “The DTSC and other regulators need to put community safety first and show zero tolerance for such polluters.”

Consumer Watchdog has previously described problems at several hazardous waste sites, and also called for reforms at the DTSC to address a lack of transparency, a disconnect between inspection and enforcement, and a preference for weak settlements instead of more aggressive prosecution of serial violators.

Read Letter to Director Raphael

Also read Consumer Watchdog’s April 9 letter to the Senate Judiciary Committee

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Consumer Advocates Say Prop 33 Means Auto Insurance Rate Hikes of 33% or More

The newly numbered Proposition 33, funded by Mercury Insurance’s billionaire Chairman George Joseph, is a replay of Mercury’s unsuccessful 2010 initiative aimed at raising auto insurance premiums on millions of Californians.

According to the Attorney General’s official title of the initiative, Prop 33: “Changes Law to Allow Auto Insurance Companies to Set Prices Based on a Driver’s History of Insurance Coverage.” The Attorney General’s summary explains that Prop 33 “Will allow insurance companies to increase cost of insurance to drivers who have not maintained continuous coverage.”

Prop 33 aims to change over 20 years of insurance law by repealing a key anti-discrimination provision from the 1988 voter initiative Proposition 103. In addition to broadly reforming insurance rates in California, Proposition 103 specifically prohibited an insurance industry redlining scheme first brought to public attention by the 1985 California civil rights case King v. Meese. While Prop 103 made that scheme illegal 24 years ago, Prop 33 would rollback that protection and revive this discriminatory practice by insurance companies that particularly targets low-income and other Californians struggling financially.

Consumer advocates opposing Prop 33, including Consumers Union, Consumer Federation of California and Consumer Watchdog, say that Prop 33 is another deceptive insurance company trick to raise auto insurance rates for millions of responsible drivers in California. While the insurance industry backers of Prop 33 promise that it will give people discounts, the measure is actually designed to get around an existing law that prevents unfair surcharges on good drivers.

Prop 33 allows insurance companies to charge dramatically higher rates to customers with perfect driving records, just because they had not purchased auto insurance at some point during the past five years. Drivers must pay this unfair penalty even if they did not own a car or need insurance at the time.

“The insurance companies are at it again with another deceptive initiative that says one thing but does another,” said consumer advocate Douglas Heller with Consumer Watchdog Campaign. “When an insurance billionaire spends millions of dollars on a ballot measure, hold onto your wallet. Prop 33 is the newest edition of Mercury’s long-running effort to give insurance companies a new way to unfairly raise auto insurance premiums.”

Mercury Insurance Chairman George Joseph has already spent eight million dollars on Prop 33 and will likely spend more than the $16 million spent by Mercury for its 2010 initiative, according to consumer advocates. Prior to his serial attacks on consumer rights at the ballot box, Joseph and his company pushed for legislative repeal of the consumer protection laws, but that change was ruled illegal by the California Court of Appeal.

About ten years ago, Mercury was caught illegally surcharging many of its customers using the same so-called “continuous coverage” scheme proposed in Prop 33. At the time, Mercury added a 40% surcharge on drivers with perfect records who did not have prior insurance coverage at some point in the past, even if they did not need coverage. In other states where Mercury is allowed to add the Prop 33 surcharge, rates jump by 50% to 100% and sometimes more.

“Wherever Mercury has imposed the financial penalty that would be allowed under Prop 33, premiums for many drivers skyrocket,” said Heller. “When California voters go to the polls in the November, they should ignore the insurance industry’s slick ad campaigns and simply remember that Prop 33 will raise auto insurance rates by 33% or more.”

Prop 33 would increase premiums for Californians who stopped driving for legitimate reasons, including:

• graduating students entering the workforce;
• people who dropped their coverage while recuperating from a serious illness or injury that kept them off the road
• Californians who previously used mass-transit; and
• the long-term unemployed.

Californians who had chosen not to drive for a time and did not need insurance would be surcharged when a new job, move or some other circumstance requires them to buy insurance again. Prop 33’s unfair penalty would punish drivers with premium surcharges that could reach $1,000 a year or more just because they took a hiatus from driving their automobile.

For more information about Prop 33, Consumer Watchdog Campaign has created: www.StopTheSurcharge.org

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Commissioner Dave Jones Sides With Consumers, Echoes Concerns Raised by Consumer Watchdog in Lawsuit Over the So-Called “Death Spiral”

Santa Monica, CA – Consumer Watchdog praised Insurance Commissioner Dave Jones’ announcement today opposing Blue Shield’s plan to close 23 health insurance policies, and echoing concerns raised by Consumer Watchdog in a recently-filed class action lawsuit.

Consumer Watchdog said, however, that as many as 100,000 Californians are still trapped in closed or lower-benefit health plans following policy closures carried out by Blue Shield’s affiliate regulated by the Department of Managed Health Care in 2010.

“Blue Shield is on notice that the company’s plan to close health insurance policies fails to protect consumers as the law requires,” said Jerry Flanagan, staff attorney for Consumer Watchdog. “If Blue Shield decides to go forward with the policy closures, we look forward to working with the company to implement a consumer-friendly plan. We also hope that Blue Shield will ensure that consumers affected by the 2010 policy closures will finally benefit from the protections mandated by law.”

The lawsuit filed by Consumer Watchdog and Whatley Kallas, LLC alleges that Blue Shield is illegally gaming the health insurance system by alternately closing older policies and opening new ones in order to push older, sicker consumers who are more expensive to insure into lower benefit, higher deductible coverage that requires consumers to pay more out of pocket.

The lawsuit seeks to stop Blue Shield from shoving its policyholders into what is known as a “Death Spiral”-the industry term for what happens when a health insurer “closes” certain insurance policies to new customers, and later raises rates to those remaining in the closed policy until those enrollees can no longer afford coverage. Since consumers with preexisting conditions cannot switch to a comparable or better policy, consumers trapped in the closed policies must either accept greatly inferior coverage or face bigger and bigger premium increases.

Download the lawsuit filed in San Francisco Superior Court here

According to legislative records, it was Blue Shield’s own past business practices, resulting in Death Spirals for consumers, that spurred the Legislature to adopt the same 1993 law that Consumer Watchdog and Whatley Kallas, LLC now allege the company has violated.

The policy closures are taking place among certain insurance plans in the individual market. California law requires that when health insurers close a policy the insurer must either offer consumers new comparable coverage, or minimize rate increases on the closed policies.

Two regulatory agencies – the California Department of Managed Health Care (“DMHC”) and the California Department of Insurance (“CDI”) – oversee different segments of Blue Shield’s insurance business. In the lawsuit, Blue Shield is accused of illegally closing eight policies regulated by the DMHC in 2010, and announcing it would close 23 policies regulated by the CDI on July 2, 2012 without offering consumers comparable policies or limiting rate increases as required by law.

Consumer Watchdog and Whatley Kallas, LLC settled a similar class action lawsuit last year targeting Blue Cross of California’s illegal Death Spiral practices. Read more about that lawsuit and settlement here. Under the terms of that settlement, Blue Cross must both offer consumers in the closed policies access to comparable coverage and limit rate increases in the closed policies if consumers choose to remain enrolled in the older, closed policy.

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Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at: http://www.ConsumerWatchdog.org

WhatleyKallas has earned a national reputation-based on trust, respect, demonstrated commitment and tangible results-in connection with its representation of healthcare providers and members of the organized medicine community. The firm’s lawyers have negotiated settlements with most of the major health insurers in the country on behalf of hundreds of thousands of consumers, physicians and medical associations that resulted in monetary relief and revolutionary practice changes valued in the billions of dollars. These settlements fundamentally changed the way managed care companies do business. The lawyers of WhatleyKallas have been repeatedly recognized in legal publications, such as “The National Law Journal” and “American Lawyer”, by their peers and by leaders of organized medicine for our work in the healthcare field. For more information, go to: http://www.whatleykallas.com/

Just when consumers are finally getting a look at how health insurance companies conduct their business, the industry is racing to shut and lock the door. Buried deep in a “model law” for states to update health insurance regulation is a clause that would keep secret the companies’ justification for  exorbitant rate increases.

Why’s this so bad? Because one of the few ways patients and consumer groups can tell whether a rate increase is justified is to closely examine the data-heavy actuarial reports that insurers use as their defense. In states with consumer-friendly insurance commissioners, some have found gross math errors in favor of the companies. (Simple mistakes? Maybe.) Without access to actuarial and other related data, consumers can’t even hold an unfriendly insurance regulator to account, much less force the company to back down.

The “model law” is being drafted by the National Association of Insurance Commissioners, a private body of state insurance commissioners. It has long been criticized for being too cozy with the industry. The NAIC, however, has also drafted a lot of the regulations governing health insurance reform nationally, with the explicit approval of the Department of Health and Human Services. So what the NAIC says and does matters to every insurance policyholder.

Here’s the industry-friendly secrecy clause tucked into the NAIC’s model law, which most states would closely follow in drafting their own laws:

Each health carrier shall file with the commissioner annually on or before March 15, an actuarial certification certifying that the carrier is in compliance with this Act and that the rating methods of the carrier are actuarially sound. The certification shall be in a form and manner, and shall contain such information, as specified by the commissioner. A copy of the certification shall be retained by the carrier at its principal place of business.

(3) (a) A health carrier shall make the information and documentation described in paragraph (1) available to the commissioner upon request.

b) Except in cases of violations of this Act, the information shall be considered proprietary and trade secret information and shall not be subject to disclosure by the commissioner to persons outside of the Department of Insurance except as agreed to by the health carrier or as ordered by a court of competent jurisdiction.

There is a lot of room for mischief in an actuarial certification, especially when the actuarial company depends on the insurance company for its pay. The insurance industry primarily uses the certifications as a shield against state oversight, especially any attempt to lower rates.

Under this clause, a state insurance commissioner could have trouble even telling the public why an insurance rate is unjustified,  turning protective oversight  into a he said-she said catfight. Given tens of millions in lobbying money employed on the insurance industry side, it wouldn’t be an even battle Consumers couldn’t fight back against rates without data to back their argument.

If the secrecy clause stays in, states that already make such data public. like California, will find their legislatures swarming with insurance lobbyists pushing to put the data back in a closet, because the NAIC model law says to do it. The insurance lobby has repeatedly blocked state authority to deny or modify rate increases, so for a $35-million annual lobby, a little secrecy looks easy.

There is almost no such thing as a “trade secret” in a service industry like insurance. The companies don’t need to keep their actuarial reports secret from other insurers–they just need to keep the data away from outraged consumers.

The NAIC’s own consumer representatives oppose the industry secrecy clause. We hope the Department of Health and Human Services, which has strongly favored disclosure and transparency, will also weigh in. Otherwise, it will be up to the states to understand that this clause is a model of nothing except the lobbying might of the health insurance industry.

Consumers who’d like to fight back, at least in California, can start by learning more about the Consumer Watchdog Campaign’s November ballot initiative. It would make insurance companies justify their rates before they go into effect, and reduce or retract rates if they’re unjustified.

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Posted by Judy Dugan, research director for Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

SACRAMENTO, CA – Consumer Watchdog today called on state and local governments to quit spending taxpayer millions on Scott toilet paper, Kleenex tissues and other products from Kimberly-Clark Corporation. The global company is part of a corporate coalition battling to keep a tax loophole that benefits only out-of-state corporations—to the detriment of California schools, local governments and state services.

In letters to Gov. Jerry Brown and the mayors and executives of 21 cities and some large counties, Consumer Watchdog also urged governments to avoid Chrysler and GM auto and truck purchases. The automakers are also in the coalition of out-of-state corporations eager to evade corporate taxes in California.

The letter to Gov. Brown said in part:

“Every dollar of taxes evaded by large corporations is another dollar taken from our schools, fire and police protection and support for the impoverished and disabled.  We ask you to set an example by avoiding taxpayer-funded purchases from out-of-state companies lobbying to protect a state loophole that lets them pay less than in-state companies.

“A ripe target is toilet paper and other janitorial products made by Kimberly-Clark, whose brands include Scott paper products and Kleenex. The global company is part of a corporate coalition battling against efforts to use the same corporate tax formula for all companies that sell products in California, as almost all other major states do. California’s “take-your-pick” loophole costs the state up to billions of dollars a year. Constituents would both smile and applaud your vow to “Flush Tax-Evader Toilet Paper.”

“We also ask you to avoid taxpayer purchases of Chrysler and GM autos and trucks for public safety and other state uses, as well as cardboard products from International Paper Co. They are in the coalition with Kimberly-Clark formed specifically to lobby against a legislative proposal and likely ballot initiative that would close the tax loophole.

(Click here to see the letter to Gov. Brown. The letters to localities are similarly phrased.)

A Consumer Watchdog analysis of California purchases through a state purchasing coalition in the current fiscal year shows that Kimberly-Clark products account for 20% to 25% of total “janitorial supply” orders, and over $1.6 million of taxpayer spending in a year. Only some counties, cities and state agencies use the purchasing contract, so the statewide total would be several times larger than  $1.6 million. However, the proportion of purchases is likely to be similar statewide, said Consumer Watchdog.

“We want local and state government to flush tax-evader toilet paper,” said Judy Dugan, research director for Consumer Watchdog. “State universities, local police departments and other agencies that buy Kimberly-Clark products are also buying themselves deeper cuts in essential services. There are plenty of better choices on the market.”

The Consumer Watchdog analysis looked at Department of General Services order lists for janitorial supplies during two quarters of 2011. On an annual basis, orders for Kimberly-Clark products would total more than $1.6 million. (see Excel charts for Q1 and Q3 of the 2011-12 fiscal year linked below.) Independent purchases by many cities and counties would likely at least triple the amount. For instance, Los Angeles, San Diego, San Francisco and Sacramento do not list any purchases through the state contract.

Kimberly-Clark sells 122 products to state and local governments through the janitorial supply company Waxie, which has a multi-state contract for cleaning and janitorial supplies under the Western States Contracting Alliance. Purchases included several counties, small cities, state universities, transit and police agencies.

Kimberly-Clark is one of four global corporations in the deceptively named “California Employers Against Higher Taxes” coalition. The group was formed to fight elimination of an “alternative” corporate tax calculation that benefits out-of-state companies. The loophole costs California up to billions of dollars a year at a time when schools, protective services and aid to the disabled are being slashed.

Two other members of the pro-loophole group, Chrysler and General Motors, recently lost out on a large state contract for nearly 2,000 police cruisers and utility vehicles, for the California Highway Patrol and other agencies. The contract, worth close to $50 million over two years, went to Ford, which is not part of the pro-loophole coalition.

Click here to see Consumer Watchdog’s news release on the police cruiser contract.

“The state’s large contract for Ford vehicles sets a good precedent for putting taxpayer money in the right hands-a major automaker willing to pay its fair share of California taxes,” said Dugan.

The fourth member of the coalition is International Paper, which makes cardboard products including the boxes in which California produce is shipped. Its products, usually unbranded and sold through middlemen, are hard to track. A fifth member, Proctor and Gamble, dropped out of the coalition following public protests against its products.

Click here to see Consumer Watchdog’s analysis of federal tax evasion by members of the  pro-loophole coalition.

The two efforts to close the loophole are legislation by Assembly leader John Perez (AB1500) and a ballot initiative sponsored by tech multimillionaire Thomas Steyer, who fought successfully in 2010 against Proposition 23, which would have benefited oil companies. The proposals would shift California to the corporate tax system used in other major states–a single tax calculation that is primarily dependent on the amount of sales a company made in California.

Consumer Watchdog, a nonprofit, nonpartisan consumer advocacy group, does not support any particular proposal to fix the loophole as long as it stops the gaming of the state tax code.

Here are links to quarterly lists in xlsx format of janitorial purchases through state purchasing contracts.

Q1, 2011-2012

Q3

Cities and counties to which letters are being faxed include: Los Angeles, Long Beach, Los Angeles County, San Diego, San Diego County, San Francisco, San Jose, Irvine, Santa Ana, Anaheim, Orange County, Sacramento, Riverside, Fresno, Oakland, Bakersfield, Stockton, Fremont, San Bernardino, Modesto, Oxnard, Fontana, Chula Vista and Santa Monica.

They say you cannot fight city hall, but recently some folks unhappy with the California Energy Commission’s decision to give hydrogen-fueling station contracts only to bidders approved by the major automakers won a victory. It’s a reversal of what they called “sweet heart” deals.

Citizens don’t often get change from their government ofiicials. This, however, is a classic case of how sunlight can still be the best disinfectant.

Tom Elias, a long time syndicated columnist, broke the story of the boondoggle and its collapse. After enough heat and light, the Commissioner responded by saying it would nix the automakers’ veto power in the contracts.

Elias writes:

Less than two weeks after this column exposed a situation where tens of millions of state tax dollars were given to billion-dollar corporations —- but only with approval from other billion-dollar corporations —- the California Energy Commission suddenly ended that practice.

In a message sent late May 25, the commission said it “is canceling its grant solicitation for hydrogen fueling stations in order to revise solicitation protocols. The commission will issue a new solicitation at a future date.”

The grants, funded by vehicle license fees under a 2007 law authored by former Democratic Assembly Speaker Fabian Nunez and signed by then-Gov. Arnold Schwarzenegger, amounted to $15 million in 2010, with an additional $12 million winning tentative approval in April. Those grants have now been canceled.

The grants are designed to encourage construction of refueling stations for hydrogen fuel cell cars that are due to hit showrooms by 2017. These will be built by eight automakers:Nissan, Toyota, Honda, GM, Chrysler, Volkswagen, Daimler and Hyundai.

The Energy Commission’s Schwarzenegger-era policy was to require that at least one automaker approve any refueling location before a grant application could even be considered.

Elias’s first column on the scandal ran statewide at a time when the goverment is trying to sell austerity and prudence to the public, which will vote on tax hikes in November.  Government officials need voters’ trust. The Commission felt the heat and changed the recipe.

Whether hydrogen vehicles are the best way to go remains to be seen, and most at Consumer Watchdog are skeptical. But at least the contracting for the developing fueling system won’t allowed to be rigged in favor of the major automakers and their allies.

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Posted by Jamie Court, author of The Progressive’s Guide to Raising Hell and President of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

The energy investigators who nailed Enron for energy price manipulation that nearly bankrupted California just took aim at oil refining giants including Chevron and BP. May the refiners’ gasoline-price schemes now come crashing down in an Enron-style heap.

We’ve known for years that California and West Coast refiners find endless ways to shut down some of their gasoline production, cutting supplies and jacking up  pump prices.  They actually make more money from making and selling less gasoline. It explains why West Coast drivers are stuck paying $4-plus a gallon while pump prices take a dive in the rest of the country. Now a credible study and a U.S. Senator have reached the same conclusion-and trying to put some muscle on the oil industry.

Washington State Sen. Maria Cantwell is probably the best-informed on the petroleum industry of all federal legislators, at least among those not joined at the hip with Exxon. She is calling on the  the Federal Trade Commission to investigate six major refiners-Alon, Chevron, ConocoPhillips, Shell, Tesoro and BP.  It’s a smart move, because the oil lobby has a stranglehold on Congress and most state legislatures. President Obama has tried at least twice to reduce the industry’s billions of dollars in taxpayer subsidies, and gotten nowhere.

Here’s the gist of the story by McClatchy news service’s Kevin Hall:

In a letter being sent to regulators on Thursday and obtained by McClatchy, Sen. Maria Cantwell, D-Wash., calls on the Federal Trade Commission to investigate refinery operators Alon, Chevron, ConocoPhillips, Shell, Tesoro and BP following the shutdown of BP’s Cherry Point refinery in Washington State.

Citing a report by Portland energy consultant McCullough Research – a group whose work helped topple energy-trading giant Enron Corp. – Cantwell questioned why May gasoline prices in her state soared recently to within cents of the local record of $4.35 a gallon set in July 2008. Meantime, gasoline prices nationwide in May fell 17 cents a gallon and oil tumbled more than $14 a barrel.

The McCullough Research report questioned whether the historically low gasoline inventories on the West Coast were really a result of a fire on Feb. 17 that idled the BP plant for about three months.

Gasoline prices on the West Coast had tracked closely with the price of West Texas intermediate crude delivered at Cushing, Okla., but in May veered widely from historical norms, according to the report. Had prices followed supply costs, said the report’s author, Robert McCullough, retail gasoline prices on the West Coast would have dropped to about $3.65 a gallon. Instead, prices have been about 68 cents higher.

The report estimates “a windfall profit of $43 million a day” for refiners on the West Coast as the supply manipulation continues.

The investigators who nailed Enron ought to be able to get the attention of the FTC, and Sen. Cantwell may be able to get the oil CEOs into a hearing room for some sworn testimony.

Here’s the full report from McCullough Research, and the news release from Sen. Cantwell’s office, with her letter to the FTC attached. She requests the FTC to:

…utilize its regulatory authority and responsibility granted by Congress to ensure that Washington state consumers are not subject to “any manipulative or deceptive device or contrivance” that could be resulting in unjustifiably high gasoline prices.  In particular, I am asking the Commission, pursuant to the Prohibition on Market Manipulation Rule, to investigate whether or not recent and inexplicable gas price spikes in Washington state are the result of deliberat[e] efforts by West Coast refiners to keep gasoline inventories artificially low.

This is a fight that’s been going on for a long time and California is even more affected by what the refineries are doing. Cantwell would no doubt welcome some company in her effort from Sens. Dianne Feinstein and Barbara Boxer.

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Posted by Judy Dugan, research director for Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

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Posted by Judy Dugan, research director for Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

By John M. Simpson

Have you seen the cloying and annoying video produced by Google called “Google Chrome: Coffee”?  It tells the tale of a man using the Internet to get back in the good graces of his estranged girlfriend.  

It ends with him asking her to join him for a cup of coffee and concludes with the tagline, “The web is what you make of it.”

Naturally the man uses the Internet giant’s browser Chrome to access the web and the full range of Google products from Gmail, to maps, to Picasa, to docs, to YouTube as he remembers the past, apologizes and asks her to join him for coffee.

It’s just sooooo cute.

The problem is that Google doesn’t tell you that while you’re using Chrome and its other products it is amassing a huge digital dossier on your activities so you can be marketed to advertisers.  That’s where 98 percent of Google’ revenue comes from: advertising.  You’re not Google’s customer; you’re its product.

Just to remind folks of the reality, a technologist has produced his own little video called “Google Radar: Coffee.”  It overlays on the original Google video all the information that is sent back to Google for possible inclusion in digital dossiers as the the hero of the tale makes his plea for reconciliation.

Google should really change tag line.  It ought to read, “The web is what we make of you.”

The technologist sent me a link.  Check the video out below.