California: if they continue with the restrictive rules they risk being left with empty tanks
Chevron, the Californian oil multinational, has warned the state of California that, if it continues with its environmental policies, it will condemn its fellow citizens to pay much more for fuel than what happens in other US states and also to no longer find fuel. All because lawmakers continue to enforce policies aimed at discouraging oil production and processing.
California motorists paid an average of $4.94 per gallon for gasoline in the final three months of 2023, about $1.72 more than the national average and the highest quarterly premium on record, according to data compiled by Bloomberg. The state has the country's toughest standards for low-carbon fuels that encourage refineries to convert oil into renewable diesel. Such conversions reduce the supply of gasoline, driving up prices, Walz said.
“They knew this was going to happen when they wrote the legislation,” he said. “The problem is that the consumer is starting to realize this. It's getting painful. The way politicians have approached the issue has been, “Let's blame the oil companies,” but they react and in turn place the blame on California laws.
California Governor Gavin Newsom's office said in a statement that the gasoline price spikes the state has experienced are due to a lack of planning on the part of oil companies. He accused the oil companies of not having invested in the renovation of California's refining plants, thus passing the costs on to consumers, but, in reality, the companies are already having problems justifying their stay in the state from an economic point of view.
The latest critical point is the proposal to establish a maximum margin on refining profits in California, a socialist state choice which, in Newsom's mind, should lower fuel prices. Chevron is already finding it difficult to justify growth projects at its two California refineries – which account for about 30% of the state's capacity – because of its plan to end sales of internal combustion engines by 2035, which would gut the market of petrol. With a law that limits profits, Chevron is only interested in closing down and moving its activities elsewhere, perhaps to Texas, where no profit limits are imposed.
Between restrictive laws and environmental objectives, companies have no interest in investing in oil activities in California, but this has consequences that could go far beyond just the price difference in fuel. Refineries “are making decisions that are taking us down a path where there could be a reliability issue,” Walz said. “You might not have petrol available if things don't go the way the government wants. It's a dangerous game." Without refineries the fuel must be imported, and if there are problems one day Californians could find themselves with dry tanks!
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The article California: if they continue with the restrictive rules they risk remaining with empty tanks comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/california-se-continuano-con-le-norme-restrittive-rischiano-di-restare-con-i-serbatoi-vuoti/ on Mon, 29 Jan 2024 10:00:30 +0000.