Tag Archives: Big Oil

Environment

Keystone XL Builder Has Explosive Problems

TransCanada, the company that would build and own the Keystone XL oil pipeline from Canada’s tar sand fields to the U.S. Gulf Coast, has dialed up its lobbying in Congress after a U.S. State Department report that favored the pipeline. The giant oil pipeline is perfectly clean and safe, say the lobbyists. TransCanada will be using the best, newest technology, monitoring and materials. The citizens of Montana, South Dakota, Nebraska and points south need not worry their little heads.

Then, BOOM! A TransCanada natural gas pipeline in Manitoba, Canada blew up in a spectacular fireball on January 25, reaching hundreds of feet into the air. It burned for 12 hours and only its rural location prevented a human catastrophe. (A nearly identical gas pipeline explosion in San Bruno, California killed eight people and burned a neighborhood in 2010). A TransCanada pipeline in Ontario exploded in a nearly identical manner in 2011. Another TransCanada pipe in Ontario blew up in 2009 as well.

TransCanada ExplosionA week after the Manitoba blast, TransCanada still didn’t know what caused it, or wouldn’t say.

Oil pipelines may fail without fireballs, but are no less dangerous to neighbors and the environment. No matter what a pipeline carries, maintenance and vigilance matter. But keeping a pipeline from exploding-or gushing a lake of flammable, toxic crude oil into local water supplies-isn’t a profit center. (What would pour out of Keystone XL is actually a slurry of corrosive tar and chemical-laced, highly flammable thinners.) To a corporation, safety spending is a dead loss. Only the lip service is free.

Ronald Reagan famously said of negotiating with the Soviet Union, “Trust, but verify.” The same goes for the promises of TransCanada, yet U.S. pipeline regulators are too strapped for staff and money to verify even existing pipeline safety, according to a New York Times story.

Another TransCanada pipeline explosion in 2009, in Ontario’s northern wilderness, was blamed on “95% corrosion” of the pipe. A Canadian government report said TransCanada’s inspection tools “failed to accurately assess” the level of corrosion.

The real question about the Keystone XL pipeline is why the United States should bear all of these risks, for no reward. A Consumer Watchdog study last year found that the pipeline, by sending Canadian oil overseas from the Gulf Coast, would actually raise gasoline prices in the U.S. The number of permanent jobs created would be paltry. Domestic oil production is rising and U.S. consumption is falling, so there is no economic rationale for more tar sands oil.

The XL pipeline, with all its attendant risks of spills, pollution–even deliberate vandalism or terrorism–is being built through America but not for America.

Canadians who understand the danger are turning down proposals for oil pipelines to their own Pacific coast.

Oh, and the U.S.State Department report that TransCanada’s lobbyists are waving so proudly? It was drafted by a subcontractor with financial ties to TransCanada. Chalk up one more reason why the U.S. should decline to be TransCanada’s beast of burden.

Posted by Judy Dugan, Research Director Emeritus of Consumer Watchdog.

Uncategorized

“Gas Pain” At Pump And Smokestack

A California license plate seen recently that said, “Gas Pain,” might be the sly joke of a gastroenterologist, but it’s not on a Mercedes. So let’s stipulate that it means pain at the pump, with a gallon of regular gas stuck for months  at around $4.40. This kind of price is as usual fueled by investor speculation and an oil industry that cuts supply to drive up profit. But the license plate could just as well be about a different kind of gas-a  big increase in greenhouse gas emissions by the state’s oil refineries.

A California license plate seen recently that said, “Gas Pain,” might be the sly joke of a gastroenterologist, but it’s not on a Mercedes. So let’s stipulate that it means pain at the pump, with a gallon of regular gas stuck for months  at around $4.40. This kind of price is as usual fueled by investor speculation and an oil industry that cuts supply to drive up profit. But the license plate could just as well be about a different kind of gas-a  big increase in greenhouse gas emissions by the state’s oil refineries.

California refineries “emit 19-33% more greenhouse gases (GHG) per  barrel [of crude oil] refined than those in any other major U.S.  refining region,” according to a recent report for  the Union of Concerned Scientists. The reason is a corresponding increase in the amount of heavier, dirtier crude oil processed,  including dark, sticky tar sands oil from Canada. The gasoline produced at the end of the process is no dirtier-but the gases that could otherwise come from your tailpipe are going up the refinery smokestack instead.

A story in Inside Climate Today points  to requirements that refiners remove sulfur pollutants from gasoline and diesel fuels. Such scrubbing is harder to do with the cheaper, dirtier tar oil, and refiners may emit more carbon pollutants during a longer refining process, especially as they try to squeeze out more fuel from every barrel of oil.

California isn’t yet capping refiinery pollution, and this week delayed putting financial teeth in planned emission caps. Pardon us for thinking oil industry lobbying could have had something to do with it.

No one is forcing refiners to buy Canadian tar oil-refiners want because it’s cheaper than lighter oils and produces a bigger profit.  It’s the same reason oil companies are demanding their high-volume Keystone XL pipeline from Canada to Texas, which could make California  refinery pollution look like a clear day in spring. Exxon Mobil officials won’t even admit that the tar oil is dirtier to refine. From a Texas story on the pipeline:

An ExxonMobil spokesperson refused to specify how much heavy crude the company’s refineries are already processing in Texas or might process if the pipeline is completed. Nor would the company respond to questions about how refining tar sands oil affects the amount of air pollution created by the plants.

Extra profit also comes from U.S. refiners exporting gasoline and diesel fuel at record rates. Fuel is now America’s top export, even as refiners import the dirtiest oil to make it.  Domestic pump prices go up and the refinery pollution burden on Americans goes up while other nations reap the clean fuel.

Californians are already buying and driving cleaner cars and cutting consumption. All families prize clean air, but those who live near  refineries are suffering more, not less, pollution. There’s “gas pain” for everyone except the oil industry and its servants in government, as in a Congress that won’t even trim the industry’s billions in corporate welfare.

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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.

Environment

CLCV Rejects Attack on Debra Bowen’s Environmental Credentials

Statement of Warner Chabot, CEO, CA League of Conservation Voters

The California League of Conservation Voters (CLCV), rejects the latest round of the misleading campaign mail that questions Debra Bowen’s integrity, her commitment to the environment and the public interest.

These attacks are unfair and unwarranted. Bowen has fought for the public interest, the public’s full involvement in our democracy, and the environment her entire career. She’s never given in to special interests of any kind, and has always stood up to big polluters like the oil industry.

That’s why Debra Bowen is the only candidate to receive the endorsement of both the Sierra Club and CLCV.

Bowen earned a 96% lifetime score from CLCV’s Environmental Scorecard on environmental issues while serving in the state legislature. Of all the candidates, Bowen brings the greatest depth of experience and achievement on a wider range of environmental issues. She fought for laws to oppose offshore drilling, fight climate change, promote alternative energy and to clean up the Ports of L.A. and Long Beach. With now-Secretary of Labor Hilda Solis, she passed a landmark environmental justice bill to protect poor communities from becoming environmental dumping grounds.

We believe Debra Bowen’s experience and integrity will make her a highly respected and effective environmental champion and leader in Congress.

For more information, read our blog “CLCV endorses Debra Bowen for Congress”: http://www.ecovote.org/blog/cl…

California

Big Oil’s Dirty Fingerprints

You don’t have to be a detective to find Dirty Energy’s oily fingerprints all over our current national political debate on expanding oil drilling. But it helps that there are still investigative journalists who look into these things every now and again.

Yesterday, the U.S. House of Representatives passed the “Restarting American Offshore Leasing Now Act” by a 266 to 149 margin. Today, the Huffington Post reveals that the sponsors of the bill, which would expand oil drilling in the Gulf of Mexico and open the coastal waters of Virginia for exploration, received $8.8 million in contributions from Big Oil.

I’m sure you join me in believing fervently that the industry’s millions have absolutely zero influence on the motivations of the bill’s sponsors. Not.

According to the Huffington Post:

“The oil and gas industry is one of the most politically active interests groups in Washington. In the 2010 mid-term election cycle alone it spent $30 million in contributions to federal candidates… And those figures pale in comparison to the amount the industry spends on lobbying. In 2010, oil and gas companies spent just under $146 million employing the service of nearly 800 lobbyists.”

The “Restarting American Offshore Leasing Now Act” passed by Big Oil’s friends in the House is just the first of a series of largely GOP-supported, fast-tracked bills intended to loosen restrictions on offshore drilling. The three bills passed the House Committee on Natural Resources in April.

Closer to home for Californians, one of the next steps is to put to a House vote HR 1231, or “Reversing President Obama’s Offshore Moratorium Act,” which would require that each five-year offshore leasing plan include lease sales in the areas containing the greatest known oil and natural gas reserves. Every five years, the federal government would be required to lease at least 50% of available unleased acreage off the West Coast, Alaska, the Gulf of Mexico and much of the East Coast.

It’s been called the “Law of Eventually Drilling Everything” by Richard Charter, senior policy adviser for Defenders of Wildlife. A vote on the House floor is expected next week.

According to California Watch:

“Under existing law, the government decides which areas to lease. This new law would effectively double the current level of offshore drilling. And states, such as California, would have no say in the matter. ‘Earlier versions of bills like this generally allowed a state to veto projects,’ said Regan Nelson of the Natural Resources Defense Council. ‘Californians have consistently made it clear that they oppose new offshore drilling off their coast. This bill is so out of sync of what people want. They’re willing to put oil production over all other considerations.'”

Considerations like the clear environmental hazards of drilling, and risks to the public’s health and safety. It was only a year ago that the BP Deepwater Horizon oil rig exploded in the Gulf of Mexico, creating one of the largest environmental catastrophes ever.

It’s mind-boggling that in light of that very recent disaster, federal lawmakers including those that represent California are considering encouraging more drilling off the West Coast.

California Congressman Jeff Dunham claims that he supports the series of bills allowing more drilling in part because domestic energy production will “bring relief at the pump.” Rep. Denham is joined by fellow Californians Rep. Tom McClintock and Rep. Jim Costa in supporting the bills.

But a study conducted by the federal government’s Energy Information Administration showed that new drilling off the country’s coasts would only reduce gas prices by a few cents. (Oops! So much for that argument.)

Compare those pennies to the millions of dollars in contributions being doled out by the oil industry, and suddenly certain lawmakers’ urgent calls to allow more risky offshore drilling makes more than enough “cents.”

Speaking of something that makes no sense (or cents) for us taxpayers… Americans are still paying for billions of dollars in oil industry tax breaks, despite record oil industry profits and despite the fact that a recent poll found that 74 percent of voters support eliminating tax breaks to oil companies.

According to the national League of Conservation Voters, ExxonMobil recently announced nearly $11 billion in profits; BP announced $5.5 billion profits; and ConocoPhillips announced $3 billion in profits-all in the first three months of 2011. Obscene is the word that comes to mind.

Next week, Senate Majority Leader Harry Reid is expected to bring to the floor a bill, authored by Senator Max Baucus, that would end the billions of dollars in tax breaks for large oil producers–estimated to cost taxpayers $5 billion each year–and increase breaks for clean-energy producers.

As national League of Conservation Voters President Gene Karpinski says of the handouts to Big Oil:

“And as ire over gas prices grows, so will frustration with Members of Congress who remain close to Big Oil. So while Speaker Boehner and others may be confused about where they stand on the issue, the choice is clear: end the Big Oil handouts now or see what the voters think in eighteen months.”

California voters made it clear what they thought of Dirty Energy’s election meddling last fall by overwhelmingly defeating an oil industry-funded attempt to repeal our landmark clean energy law. I expect we’ll once again make it clear in the 2012 elections what we think of elected officials covered in Big Oil’s fingerprints–in other words, those who put oil industry profits above the needs of the Californians they claim to represent.

Uncategorized

$4 Gasoline and the Price of Silver: Yeah, There’s a Connection

1 Comment

U.S. gas prices have hit their highest level ever for springtime, at $3.96 a gallon for regular on average. Yep, higher even than the record surge in 2008, as oil companies reap near-record profits. So what does that have to do with the price of silver?

U.S. gas prices have hit their highest level ever for springtime, at $3.96 a gallon for regular on average. Yep, higher even than the record surge in 2008, as oil companies reap near-record profits. So what does that have to do with the price of silver?

The speculative price of silver is dropping, maybe crashing, from its high around $50 an ounce largely because of one move: the New York Mercantile Exchange, where silver is traded, increased how much of the price of a trade has to be paid up front. Instead of a few cents on the dollar, it’s now several cents on the dollar.

Oil futures are sold even more cheaply–with speculators still putting up only around 6 cents on the dollar to trade hundreds or thousands of barrels of oil. That makes it too easy to gamble and encourages trades that are intended to push the price up further, to the detriment of your personal wallet. Just as with silver, most of the traders don’t produce oil and never intend to take delivery of a barrel of oil on their Manhattan doorsteps. Just as with silver, oil is attractive to speculators looking for a commodity that’s protected from any drop in the value of the dollar–even if their activity ends up hurting the value of the dollar, as shown in a 2009 Rice University study on energy speculation.

There are some differences, including the fact that oil markets are too vast to be cornered by one or a few traders, unlike silver. But the similarities are more numerous.

So why not raise the margin–the amount that pure speculators have to pay up front–on oil futures trading? Sens. Bill Nelson of Florida and Maria Cantwell of Washington recently asked the Commodity Futures Trading Commission to do just that–and quickly. But the CFTC hasn’t lifted a finger and won’t even comment on the Nelson letter–which is evidence of the power of the financial industry’s lobbying power in Washington.

The White House appoints the members of the CFTC. If its chairman, Obama appointee Gary Gensler, won’t exercise his power to protect consumers and the economy, President Obama should be all over him.

If you’re interested in raising the price of speculation to lower the price of gasoline, why not give the president a call and tell him to give the CFTC a kick in the pants? White House e-mail is here (put “oil speculation”) in the subject line).  Comment line is 202-456-1111, and live switchboard is 202-456-1414. Every call is logged.

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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.

Uncategorized

Is There a ‘Gashole’ in Your Tank?

It’s as though we had another Hurricane Katrina furiously driving up the price of fuel, but without the storm. Which makes it interesting that an indie documentary called “Gas Hole,” (trailer), examining the reasons for our high gas prices in the post-Katrina world and oil company influence on the gas-guzzling engines in our cars, is now getting wider release. You can be sure that Exxon didn’t provide the funding for this funny/weird/disturbing doc. (I love the old desert-rat types with faded sedans that get 100 mpg, and their stories of disappearing clean-car patents.)

The national average price of plain old regular gasoline is up a dollar a gallon over the past week to $3.83, according to AAA. California, which alerts the rest of the nation to where pump prices are going, is at $4.20. And nationwide, the diesel fuel that drives our trucks and trains is $4.14 a gallon, even though diesel is cheaper to make than gasoline. No wonder food prices are spiking.


It’s as though we had another Hurricane Katrina furiously driving up the price of fuel, but without the storm. Which makes it interesting that an indie documentary called “Gas Hole,” (trailer), examining the reasons for our high gas prices in the post-Katrina world and oil company influence on the gas-guzzling engines in our cars, is now getting wider release. You can be sure that Exxon didn’t provide the funding for this funny/weird/disturbing doc. (I love the old desert-rat types with faded sedans that get 100 mpg, and their stories of disappearing clean-car patents.)


We find out why there’s no supply and demand in any real sense driving the price of gas today. Oil prices are spiked upward by speculation in futures markets, not by physical shortage on the market. Gasoline is driven upward not just by oil prices, but by refining companies’ restrictions on their output, and overall supplies. Then the price of gasoline pushes up oil prices some more. We’re all at the mercy of greed, not supply and demand.


Some of the serious points covered in “Gas Hole” track OilWatchdog’s studies and reports over the years, which are covered in my colleague Jamie Court’s book, “The Progressive’s Guide to Raising Hell.” (video). (Full disclosure: Jamie was interviewed for the movie.)


Some of the most eye-opening points from the book:


Remarkably, the idea that oil companies have control over the price at the pump is controversial in Washington, D.C. Oil company executives point to geopolitical instability, future predictions of crude oil scarcity, OPEC, and other forces beyond their control as the culprits.


The public knows the scoop, and its instincts track the research. Oil companies know they can make more money by making less gasoline, so they do.


I have studied the issue of high gasoline prices for more than a decade.


Here’s what I have learned about how the big five oil companies control gasoline prices by making the commodity scarce and keeping the price high. This knowledge is critical to opposing the industry’s anticonsumer behavior and pushing Americans toward real energy change.


• Rather than compete with each other to provide more and cheaper gasoline, oil companies cheat together to withhold needed gasoline supply from the market. Consistently, the companies artificially pull back refinery production of gasoline in order to reduce supply coming in during periods of peak demand so they can increase prices. … This behavior has been documented by government agencies like the Federal Trade Commission, which found, for example, in an investigation of Midwest gasoline price spikes, that one refiner admitted keeping supply out of a region in need because it would boost prices.


• Oil companies failed to build ample refining capacity to meet demand. Over the last twenty years,America’s demand for gasoline increased 30 percent and refinery capacity at existing refineries increased only 10 percent. No new American refinery has come on line during the last thirty years. Internal memos and documents from the big oil companies show they deliberately shut down refining capacity in order to have a greater command over the market.


• The big oil companies have their own crude oil production operations and control substantial foreign production of crude oil. They profit wildly when the price of crude oil skyrockets, so they have an interest in driving up the price, despite the fact that they blame OPEC for those crude oil increases.The crude oil producers can even drive up the price of crude by restricting gasoline production and trading crude oil among their own subsidiaries to drive up the price paid for crude by others. Traders with connections to the oil companies can also make big bets on the opaque crude oil futures market to drive up the price and also drive up the value of their Exxon shares.


• The crude oil that big integrated oil companies use in their own refineries is mostly bought on long-term contracts or through their own production, so the oil companies don’t pay the world price for crude oil when it’s high. Their raw material costs are much lower than they would like us to believe. So when the companies raise the price of gasoline in tandem with the run-up in crude oil prices, they are making big profits because Exxon’s crude oil unit is charging its own refining unit a higher price for crude than is necessary.The accounting shenanigans result in an overall windfall profit but show the companies’ gasoline refineries making little profit.


“Gas Hole” also pays close attention to oil companies’ long history of influencing markets and government to boost their profits and protect their business model. It pays impressive tribute to the inventor of modern investigative reporting (and one of my personal heroes), Ida Tarbell, whose 1904 history of Standard Oil laid bare a price-fixing national monopoly with tentacles everywhere in government.


Gee, does that sound familiar today? “Gas Hole” has too much sense of the absurd–even a clip from “Reefer Madness”–to be pedantic. But knowledge is power. In the end, it’s a lot more useful than boycotting the Exxon station.

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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.

Uncategorized

What’s Causing the Gas Hole in Your Wallet? You’ve Got to See This Movie

If you want to know why we're really paying over $4 per gallon for gasoline, and there appears to be no end in sight, the film Gas Hole lays it all out for anyone who wants to know the history of the pain at the pump.

The filmmakers pull back the curtain on the dirtiest secrets of the oil industry: from oil companies buying up patents for devices that would give you 100 miles per gallon, to intimidation of inventors of green technology, to oil company manipulation of the gasoline supply that drives up prices.

Being released on DVD in time for Earth Day, Gas Hole, narrated by Peter Gallagher and featuring Joshua Jackson, is an eye-opening documentary about the history of oil prices and sheds light on a secret that the big oil companies don't want you to know — that there are viable and affordable alternatives to petroleum fuel!

View the Gas Hole Trailer from Cinema Libre Studio on Vimeo.

Gas Hole provides a detailed examination of our continued dependence on foreign oil and examines various potential solution.

The film also tells the story of the battle my group, Consumer Watchdog, fought with Shell Oil to keep the company from demolishing a key gasoline refinery during a period of high demand and low supply in order to drive up the price at the pump. A combination of public pressure and intervention by US Senator Barbara Boxer and then California Attorney General Bill Lockyer forced Shell to keep the refinery open and sell it to a competitor.

As Gas Hole documents, it took every bit of raising hell know-how we had to keep Shell honest. Most communities just cannot fight back.

The film artfully lays out what I learned about fighting oil companies for more than a decade about how they jack up the price up at the pump.

• Rather than compete with each other to provide cheaper gasoline, oil companies cheat together to withhold needed gasoline supply from the market. Consistently, the companies artificially pull back refinery production of gasoline in order to reduce supply coming in during periods of peak demand so they can increase prices.

• Oil companies failed to build ample refining capacity to meet demand. Over the last 20 years, America's demand for gasoline increased 30 percent and refinery capacity at existing refineries increased only 10 percent. No new American refinery has come on line during the last 30 years. Internal memos and documents from the big oil companies show they deliberately shut down refining capacity in order to have a greater command over the market.

• The big oil companies have their own crude oil production operations and control substantial foreign production of crude oil. They profit wildly when the price of crude oil skyrockets, so they have an interest in driving up the price, despite the fact that they blame OPEC for those crude oil increases. The crude oil producers can even drive up the price of crude by restricting gasoline production and trading crude oil among their own subsidiaries to drive up the price paid for crude by others. Traders with connections to the oil companies can also make big bets on the opaque crude oil futures market to drive up the price and also drive up the value of their Exxon shares.

• The crude oil that big integrated oil companies use in their own refineries is mostly bought on long-term contracts or through their own production, so the oil companies don't pay the world price for crude oil when it's high. Their raw material costs are much lower than they would like us to believe. So when the companies raise the price of gasoline in tandem with the run-up in crude oil prices, they are making big profits because Exxon's crude oil unit is charging its own refining unit a higher price for crude than is necessary. The accounting shenanigans result in an overall windfall profit but show the companies' gasoline refineries making little profit, and "upstream" crude-oil production divisions making the lion's share.

The oil companies cannot be shamed, but Gas Hole shows why we need to keep them on a short regulatory string.

What are the solutions? Gas Hole offers them up starting with claims of buried technology that dramatically improves gas mileage, to navigating bureaucratic governmental roadblocks, to evaluating different alternative fuels that are technologically available now, to questioning the American Consumers' reluctance to embrace alternatives.

If you are paying $4 dollars or more per gallon for gasoline, spending a little more on the DVD of Gas Hole is a wise choice.

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Jamie Court is the president of Consumer Watchdog and author of The Progressive's Guide To Raising Hell (Chelsea Green)

Follow Jamie Court on Twitter: www.twitter.com/RaisingHellNow

Uncategorized

Facts of Life on High Gas Prices: It’s the Speculators & Oil Companies to Blame, Not Middle East

While skirmishes in Libya and uncertainty in the Middle East are nice cover for outrageous gasoline prices, the fact is the same old suspects are making a killing from sky-high gas prices approaching $4 dollars per gallon in California: big oil companies and greedy speculators.

While skirmishes in Libya and uncertainty in the Middle East are nice cover for outrageous gasoline prices, the fact is the same old suspects are making a killing from sky-high gas prices approaching $4 dollars per gallon in California: big oil companies and greedy speculators.

The speculative market may have driven crude oil prices up, but that’s not the price oil companies pay for the crude oil that goes into our gasoline. America’s big oil companies use crude oil that they have harvested from the ground or bought much cheaper through long term contracts to refine into gasoline. You’ll see the results in next quarter’s profit statements: big profits from both crude oil sales and refineries that make gasoline, what’s called “upstream’ and “downstream” operations in profit reports.

Consumer Watchdog has for years both tried to curb the opaqueness of the volatile speculative market for oil and to regulate supplies at gasoline refineries because oil companies game both systems, creating artificial shortages in the markets to jack up prices or exploiting historical events to justify obscene profits.  Today’s sky high gasoline prices are the result of oil companies shutting down refineries and playing the speculative markets for big gains.

The deafening silence from the White House and groups in DC loyal to the President who know better is the most astonishing thing.

Obama campaigned against oil company greed on the campaign trail but now he seems to have lost his voice on the subject. Republicans are taking the offensive, but the oil industry that has been nourished in their bosoms for decades is at the heart of the crisis. Oil companies have kept the nation running on such short supplies of gasoline that any jolt to the system sends gas prices through the roof and makes the economy pay.

What follows is the five facts of life I have learned from more than a decade fighting oil companies, battles I recount in my new book The Progressive’s Guide To Raising Hell. It’s about time the White House started educating Americans about these facts of life and fighting back against the real perpetrators of the pain at the pump.

• Rather than compete with each other to provide more cheaper gasoline, oil companies cheat together to withhold needed gasoline supply from the market. Consistently, the companies artificially pull back refinery production of gasoline in order to reduce supply coming in during periods of peak demand so they can increase prices. It’s legal so long as there is no smoky back room where they talk about it, but they don’t need to since industry data about supply flows freely on corporate computer screens. This behavior has been documented by government agencies like the Federal Trade Commission, which found, for example, in an investigation of Midwest gasoline price spikes, that one refiner admitted keeping supply out of a region in need because it would boost prices.

• Oil companies failed to build ample refining capacity to meet demand. Over the last twenty years, America’s demand for gasoline increased 30 percent and refinery capacity at existing refineries increased only 10 percent. No new American refinery has come on line during the last thirty years. Internal memos and documents from the big oil companies show they deliberately shut down refining capacity in order to have a greater command over the market.

• The big oil companies have their own crude oil production operations and control substantial foreign production of crude oil. They profit wildly when the price of crude oil skyrockets, so they have an interest in driving up the price, despite the fact that they blame OPEC for those crude oil increases. The crude oil producers can even drive up the price of crude by restricting gasoline production and trading crude oil among their own subsidiaries to drive up the price paid for crude by others. Traders with connections to the oil companies can also make big bets on the opaque crude oil futures market to drive up the price and also drive up the value of their Exxon shares.

• The crude oil that big integrated oil companies use in their own refineries is mostly bought on long-term contracts or through their own production, so the oil companies don’t pay the world price for crude oil when it’s high. Their raw material costs are much lower than they would like us to believe. So when the companies raise the price of gasoline in tandem with the run-up in crude oil prices, they are making big profits because Exxon’s crude oil unit is charging its own refining unit a higher price for crude than is necessary. The accounting shenanigans result in an overall windfall profit but show the companies’ gasoline refineries making little profit, and “upstream” crude-oil production divisions making the lion’s share.

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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.

Environment

HItting the phones in San Rafael

Although I had received an incredibly supportive welcome from campaign organizers at the San Francisco office, I was happy to move to the simpler tasks of the grassroots campaign, for which I felt much more qualified.

I have been working primarily out of an office in San Rafael, run by two members of Green Core who recently graduated college. I spend my time phone banking, meeting with volunteers and attending rallies in the surrounding area.

San Rafael, being sunny, beautiful, and inhabited by a fair few crunchy, eco-friendly people, is of course not a bad place to be working on an environmental campaign.

Having a fear of phones that makes me avoid calls even with my closest friends, I never thought of myself as a prime candidate for phone banking. Despite my hesitation, it has become one of my favorite activities. Most people don’t pick up, and many that do are clearly not in the mood to talk. The rare person though who seems truly enthusiastic makes up for all the disappointments, and I often find myself full of adrenaline after a successful phone banking session. There is also a camaraderie with the other phone bankers, as you chat together while phones ring.

Obviously phone banking is laborious and slow, but there is a feeling of accomplishment that I found lacking in other activities, a sense of reaching real, live voters (who can otherwise seem almost like mythical creatures, as you discuss them at length but never actually meet them).

I enjoy rallies tremendously, but from the outside of a campaign, I honestly thought they served more as moral boosters for the volunteers rather than influencing voters. My opinion was changed late one night, as I sat phone banking. After only the first few sentences of my “schpiel,” the man on the phone interrupted me, asking if this was the proposition he had seen all the people waving signs for the previous weekend. Having been at the rally he was referring to, I could tell him honestly that it was.

“That’s ok then,” he told me. “We’re voting no. We don’t support big oil. You can call someone else now.”

– Evi Steyer



Tom Steyer is co-Chair, with former Secretary of State George Shultz, of the campaign to oppose Proposition 23 in California, an initiative that would undercut California’s commitment to clean energy.

Evi Steyer is one of Tom and Kat’s four children. She graduated from San Francisco’s University High School in 2010 and is taking a year off to volunteer on the Prop 23 campaign and travel, before starting Yale in the fall of 2011.

They are writing a regular father-daughter, intra-generational blog to share concerns and fears, as well as ideas and hopes about the future of California’s environment.

Environment

Prop. 23 Is Debated – and the Millennial Generation Is Tuned In

This is the first installment of what we hope will become a regular father-daughter, intra-generational effort to share concerns and fears, as well as ideas and hopes about the future of California’s environment. – Tom

Tom Steyer:  

I was in Sacramento last week to debate Assembly Member and Prop. 23 author, Dan Logue. As part of my role as the No on Prop. 23 Co-Chair, I’m going to be publicly arguing the ‘no’ side of this measure as often as they’ll let me. I’ve been a passionate and practicing environmentalist for a long time now – and I put my money, and my time, where my mouth is.

And so I found myself in Sacramento.  

I had spent several days prepping and practicing, making sure I was on top of the information as well as Mr. Logue’s attitudes and beliefs. I’m pretty passionate about this stuff to start with – and after spending a few days really drilling down on just who’s behind Prop. 23 (billion-dollar Texas oil giants, Valero and Tesoro), what their motives are (make even more money) and what it would mean to our environment (don’t get me started), I was ready to do battle.

Turns out, Dan Logue’s a very nice gentleman from the Truckee area, a small businessman mostly concerned with the climate for small business. He clearly cared generally about the issue. But he repeatedly quoted a series of discredited analytical efforts including one from Sacramento State and another from Berkeley, the authors of which have expressly asked him to please stop misquoting their work. It seemed to me that those Texas oil companies are manipulating him as badly as the rest of us.

One of the interesting things about debating this issue in public was that I got an immediate sense of what resonates and what does not. It’s obvious that the fact this initiative is funded by Texas oil companies resonates with everyone. It’s obvious that polluters should not be able to write their own environmental laws, get them on the ballot, and get them passed. The other point that’s obvious is this is a confusing issue for most people. Even the numbers, AB 32 and Prop 23, are confusing. It was necessary to repeat frequently that the pro-environment vote is a NO on 23 vote.

I found it an emotional experience, much like playing a soccer or basketball game. But even more so because it’s so obviously not a game. I left the debate feeling pretty drained – but also even more focused. Valero and Tesoro are going to spend whatever’s necessary to undermine California’s environmental laws. And I’m going to do my damndest to stop them.

Evi Steyer:

The trip from San Francisco to Sacramento, across the bay, over the golden-brown hills, and through the fields of the Valley, put me in a very California frame of mind.  After mistakenly making my way to a local neighborhood (wine) press club and bar of the same name, I finally found my way to the Sacramento Press Club, where the debate was being hosted.  The street was lined with Yes on Prop 23 advocates and a man dressed as a chicken, a reference to Assemblyman Logue’s feint at backing out of the debate. Late due to my scenic tour of Sacramento, I hustled up the stairs and found a seat at the back of the high-ceilinged room. Two men who resembled Logue himself and seemed to be closely affiliated with him, a couple wearing matching Tea Party t-shirts, and several people wearing Yes on 23 stickers and holding signs, were seated next to me.

As an 18-year old who grew up in a house where conversations about sustainable energy were as common as the morning carpool, I’m proud of California’s environmental laws and think Prop. 23 is deceptive and really, really dangerous.

The facts prove global warming is real, so it was hard for me to react to Mr. Logue’s assertion that the matter remains inconclusive without a certain amount of skepticism. What struck me, more than the arguments presented and the studies cited, was the overall tone of the discussion. Both Mr. Logue and my Dad clearly care about California and its citizens. But Dan Logue most definitely stakes his position on what he believes to be in the best interest of California. The only problem with Mr. Logue’s position though, no matter how passionate he is and how deeply held his beliefs – he’s wrong on the facts.

I was proud of my Dad, not for his debating tactics but for the positive and hopeful stance he presented. The words “innovation” and “creativity” arose frequently in his arguments for AB 32 and against Prop 23. Listening to the debate, I felt fully engaged and excited about the green revolution and the role California will play. I felt hopeful.

Tom Steyer is a successful asset manager, entrepreneur and environmentalist. He founded and is Co-Managing Partner of the San Francisco-based firm, Farallon Capital Management and is a partner at the private equity firm Hellman & Friedman. With his wife Kat Taylor, he created and funded OneCalifornia Bank, which provides loans and banking services to underserved small businesses, communities, and individuals in California. In 2008, Steyer and Taylor made a $40 million gift to Stanford University to create a new research center as part of the Precourt Institute for Energy, the TomKat Center for Sustainable Energy.

Steyer is also co-Chair, with former Secretary of State George Shultz, of the campaign to oppose Proposition 23 in California, an initiative that would undercut California’s commitment to clean energy.

Evi Steyer is one of Tom and Kat’s four children. She graduated from San Francisco’s University High School in 2010 and is taking a year off to volunteer on the Prop 23 campaign and travel, before starting Yale in the fall of 2011.