The three major refiners that provide detailed profit information reported their best ever year to date from oil refining in California. Each company has, at least, tripled their average historical profits in the third quarter, according to Consumer Watchdog analysis.
The huge increases followed a record year for California gas prices, reaching as high as US$1.20 above the national average for the first time in history. The previous high had been US$0.80. In the last nine months, Californians have paid US$7.5 billion more than they should have for gas, according to the report. In Los Angeles, prices remain US$0.75 /gal. higher than the national average, double the usual gap. The report concludes, ‘2015 has emerged as a new era in California refining, record prices, record profits, and record influence peddling.’
Refiners in California spent vast amounts on lobbying this year, matching the threefold profit increases. All of the companies examined spent more on lobbying in the first 9 months of 2015 than any year prior. The oil industry as a whole, including the state's biggest refiner, Chevron, and the state's leading lobbyist, the Western States Petroleum Association, spent US$11 million.
"Price gouging in California is creating a second Gold Rush for oil companies," said Cody Rosenfield, the report's researcher. "Oil refiners protected their Golden State gouge with gold plated lobbying. Californians and their representatives should be outraged."
SB 350, Governor Jerry Brown's signature climate change legislation, was stripped of the mandate slashing oil use in half by 2030 due to unprecedented oil industry lobbying. The oil industry has also avoided scrutiny by regulators.
While Valero & Tesoro provide California specific information regarding their operations, the majority of refiners do not provide detailed profit data for the state. Chevron, the state's biggest refiner, does not break out profits for specific states. It posted its best ever quarter for refining in the US, the company's financial data showed. More than half of the company's refining takes place in California.
When the California Energy Commission's Petroleum Market Advisory Committee meets in December, Consumer Watchdog will recommend that every California refiner provide state specific profit information including per bbls profits, and overall statewide profits. Currently, Valero and Tesoro provide the most information. The other major California refiners provide almost no California specific information.
Consumer Watchdog will also ask that refiners be required to notify the public and regulators about planned maintenance in advance and how they plan to make up for any shortfall in productionConsumer Watchdog's findings include profits and lobbying.
Valero, California's fourth largest oil refiner made US$342 million in California from refining, its best quarter ever in the segment. The sum is six times Valero's average profits since 2010, and 12 times more than the company made in the same quarter last year.
Tesoro, California's second largest refiner, made US$770 million from California refining, based on a Consumer Watchdog analysis of its financial data. This is four times its average profit since 2010, and its most profitable quarter ever in California. The company made a whopping US$16.03 per refined barrel.
Chevron, the largest refiner in California, made US$1.2 billion on refining in the US in the third quarter, its best quarter ever. 54% of Chevron's refining takes place in California, which boosted high profits.
Chevron, Tesoro & Valero spent more in the first nine months of 2015 than any other year in history.Valero spent a record US$582,587 on California lobbying in 3Q15, the most it has ever spent.Tesoro spent US$130,046 in the quarter, four times its average spending since 2005.Chevron spent US$1.8 million in the third quarter, dwarfing its average spending of US$500 000 since 2000. The oil industry's major California trade association, the Western States Petroleum Association, spent a record US$6.7 million in the quarter, the most of any lobbyist for any industry.
Adapted from press release by Francesca Brindle
Read the article online at: https://www.hydrocarbonengineering.com/refining/20112015/california-refiners-profits-triple-says-consumer-watchdog-1776/