In one headline it advances: socialism instead of “record profits”; “the planet burns,” meaning “climate change,” the recent bugaboo that replaced “global warming”; and the idea that giving people a commodity essential to civilization is “greed.”
It begins: “Chevron, Shell, Exxon Mobil and other oil companies made more money than ever in 2022, showing just how massive a windfall they reaped as surging gas prices made it a struggle for drivers to afford filling up.” Actually, the cause is not a “surge in gas prices,” but a surge in global oil prices.
Something bizarre happened in the oil markets on Monday: Prices fell so much that some traders paid buyers to take oil off their hands.
The billions in record profits they posted this week bolster the appeal of California Gov. Gavin Newsom’s effort to curb oil industry price gouging. Under a proposal he released late last year, the state would set a cap on oil refinery profit margins, penalizing excess profits and returning a percentage of it to consumers.
Last year’s spikes hit Californians especially hard, because they already pay the nation’s highest gas prices, and saw them jump even higher, reaching more than $8 a gallon at one Los Angeles gas station. They deserve real action to deter oil companies from squeezing out excessive profits from motorists at the gas pump.Much further down in the overlong editorial they concede, “California’s gas prices reached new heights last year as the Russian invasion of Ukraine, among other factors, pushed prices to an average of $6.44 in June 2022, the highest on record in the state.”
Well, if it’s the fault of the war, then why blame California’s refineries? California has no influence over the war, because foreign policy is handled by the president, the State Department, and Congress.
Oil companies are interested in protecting their bottom lines, spending millions last year trying to elect sympathetic state legislators and pushing a referendum to overturn a new California law that bans new drilling near homes and schools to protect people’s health.Fancy that. Government attacks an industry, and that industry hires lobbyists to protect itself. The L.A. Times adds:
The proposal before lawmakers includes provisions to increase oversight and transparency by expanding state authority to collect data that could shed light on California’s mysteriously high gas prices, which regulators say there isn’t enough information to explain.But there’s no mystery. The high prices result from the Ukraine War, the general inflation of the past two years from too much federal spending, and high California regulations and taxes. The L.A. Times:
Stricter oversight of oil refining will be increasingly important in the coming years as California’s climate policies, including a zero-emission vehicle mandate, shrink demand for petroleum.Actually, what’s more likely to “shrink demand for petroleum” in California is more people leaving this badly governed state. Meanwhile, global demand for petroleum continues to grow. According to a Jan. 31 projection by the Statista Research Department, here are the numbers beginning with 2020, the COVID year, in millions of barrels per day:
- 2020: 91
- 2021: 96.5
- 2022: 99.4
- 2023: 101.2
- 2024: 102.3
- 2025: 103.2
- 2026: 104.1
Moreover, here’s something I haven’t heard elsewhere. The Ukraine War largely is a petroleum war. All those tanks, trucks, and planes are not powered by electric engines, but by gas, diesel, and jet fuel. So are almost all ships, with the exception of nuclear-powered aircraft carriers and subs. Russia, China, India, Japan, and other major military powers are going to make sure they have enough of all those petrochemical fuels to keep their vehicles and ships going.
The L.A. Times should talk to the California National Guard about how well it could operate if it had to switch to electric-only vehicles to avoid helping “Big Oil” reap “record profits.”
Ouch. Attacking windfall profits is an inauthentic move, especially in the Midwest, which already suspiciously laughs at anything involving California, but holds crucial primaries any Democratic candidate must win. In his obvious presidential bid, which Axelrod mentioned, Newsom needs to move to the center and to reflect the needs and gripes of voters far removed from the hothouse of the Los Angeles Times editorial board.