California Gov. Jerry Brown eases regulations on refiners, permitting the sale of winter-grade...


California Gov. Jerry Brown eases regulations on refiners, permitting the sale of winter-grade gasoline to boost supplies and hopefully provide price relief from soaring pump prices that now average $4.655/gal. Also yesterday, Sen. Dianne Feinstein asks the Federal Trade Commission to investigate the causes of the spike.

Comments (19)
  • Tony Petroski
    , contributor
    Comments (6356) | Send Message
     
    Why waste time. We all know it was the vast right-wing conspiracy aligned with Exxon Mobil and a few assorted fatcats, millionaires and billionaires.
    8 Oct 2012, 07:50 AM Reply Like
  • chopchop0
    , contributor
    Comments (5155) | Send Message
     
    lol.... the only conspiracy is California's desire to be special and screw over its citizens with special summer-fuel blend requirements.
    8 Oct 2012, 01:16 PM Reply Like
  • tedakai@aol.com
    , contributor
    Comments (22) | Send Message
     
    Price rose because there were (and probably still are) more buyers than sellers . . . particularly at the lower levels. Simple as that . . .
    8 Oct 2012, 07:55 AM Reply Like
  • robgra
    , contributor
    Comments (993) | Send Message
     
    Of course Gov Jerry waits until Exxon refinery is back up before allowing winter grade. Two weeks ago it might have helped, now, who cares, the worst of the supply outage is past..
    8 Oct 2012, 07:56 AM Reply Like
  • Syndicate_US
    , contributor
    Comment (1) | Send Message
     
    Refiners would have been compelled to hold the RVP down in any case due to the heat wave in the southern part of the state.
    8 Oct 2012, 02:14 PM Reply Like
  • davidingeorgia
    , contributor
    Comments (2661) | Send Message
     
    Considering the labyrinth of idiotic environmental rules that California has, it's a wonder prices aren't higher than they are, spike or no spike. But people like Feinstein wouldn't dream of telling the truth, so here we go with the "investigate the evil speculators" meme again.
    8 Oct 2012, 08:06 AM Reply Like
  • HoeTamer
    , contributor
    Comments (186) | Send Message
     
    I don't understand how these leftwing politicians like Feinstein can take themselves seriously. The excessive regulation they have imposed on the energy producers and refiners is totally oppressive. Who would they blame if Exxon and Phillips mothball their refineries and pulled out of the California market altogether?
    8 Oct 2012, 08:35 AM Reply Like
  • Rich in Quebec
    , contributor
    Comments (4831) | Send Message
     
    hoe tamer - If California nationalized the mothballed refinery, you would then condemn unfair socialist competition. I'm sure that normal profits are sufficient for Exxon and Phillips to stay. Besides, these special situations allowing short term price gouging are really great.
    8 Oct 2012, 02:47 PM Reply Like
  • HoeTamer
    , contributor
    Comments (186) | Send Message
     
    I don't know what world you live in but by law refiners can't release winter blend fuel in California before November 1. Since the refiners don't want to get stuck with excess inventory of summer grade fuel which any leftover would have to be stored until 2013, they curtail production of summer blend in late September. The unfortunate refinery production glitches further made California's strict emissions standards the culprit. If you want to place blame, the California voters would be a great place to start. Before Obama took office I would swear, in America a state could never nationalize any industry, but now I don't put anything past these GANGSTERS.
    8 Oct 2012, 04:07 PM Reply Like
  • Rich in Quebec
    , contributor
    Comments (4831) | Send Message
     
    Hoe tamer - I suggested nationalize a mothballed refinery, not an entire industry, in the case of an industry playing hardball (extortion). Though that may seem gangster-like to you, it is done in other democracies. The nationalization of Quebec's power industry is seen as the cornerstone of the Quiet Revolution in the 1960's, a move to modernity that has worked out well, so far.
    8 Oct 2012, 05:26 PM Reply Like
  • Cincinnatus
    , contributor
    Comments (6187) | Send Message
     
    Rich, you speak with forked tongue. You claim you're not suggesting nationalizing an industry, and then you give an example of nationalizing an industry. You're right in the second case. You'd need to nationalize the industry because outside a monopoly you'd not be able to jack up prices to the consumer and keep your government-run refinery in business.
    9 Oct 2012, 01:09 AM Reply Like
  • tedakai@aol.com
    , contributor
    Comments (22) | Send Message
     
    With the backwardation in the market, nobody is storing anything in California. If refiners were caught with unsaleable inventory they would slowly recharge it to the crude still.
    10 Oct 2012, 09:58 AM Reply Like
  • Rich in Quebec
    , contributor
    Comments (4831) | Send Message
     
    Cincinnatus - Let's understand what is going on. The feedstock has not gone up in price. There was the opportunity for the refinery to make more money because of tight supply. They did. It was suggested that industry could threaten to mothball a refinery should government prevent them from maximizing profit. To nationalize one refinery is not the same as nationalizing an entire industry. The example I gave (Hydro-Quebec) showed that government could go all the way and nationalize an industry. If you need an example of a partial nationalization as proof of concept, Canada nationalized one company (Petro Fina) in the 1970's to act as loss leader if necessary during the oil crises of that time. The company (renamed Petro Canada) was later privatized, and Albertans still hate the Liberals for having prevented Alberta's private oil companies from maximizing profits during those years.
    9 Oct 2012, 02:19 AM Reply Like
  • Cincinnatus
    , contributor
    Comments (6187) | Send Message
     
    We know what's going on. There's no slack in supply, so every time there's a refinery shutdown (the most recent was due to a power substation failure serving a refinery, not a refinery failure) there are supply gaps and price spikes. Did you not read this is California specific precisely because of CA government policies?
    9 Oct 2012, 02:28 AM Reply Like
  • Cincinnatus
    , contributor
    Comments (6187) | Send Message
     
    According to this wikipedia entry you have the history and the motivation wrong. Seems much more plausible than a claim that government is going to be able to produce gasoline more cheaply than private industry.

     

    http://bit.ly/RsnO9L
    9 Oct 2012, 02:40 AM Reply Like
  • Rich in Quebec
    , contributor
    Comments (4831) | Send Message
     
    Cincinnatus - I made no claim as to its ability to produce more cheaply. Having a government owned company allowed a made in Canada price. The nationalization of Petro Fina was instrumental to the policy since it had a nationwide chain of gas stations. The idea was to prevent gouging. Albertans saw it as a means, yet again, to favor the central Canada industrial base (Ontario and Quebec) to the detriment of oil rich Alberta.
    9 Oct 2012, 03:12 AM Reply Like
  • Cincinnatus
    , contributor
    Comments (6187) | Send Message
     
    Petrofina wasn't nationalized - in fact no company was nationalized. You're making claims that reveal you have no idea what you're talking about. Petro Canada was created in 1975 as a crown corporation, and six years later it purchased Petrofina's canadian assets. Petrofina was a Belgian company that merged with Total in 1999, long after you claim it was nationalized by the Canadian government. Fool me once shame on you, fool me twice shame on me.
    9 Oct 2012, 10:26 AM Reply Like
  • Rich in Quebec
    , contributor
    Comments (4831) | Send Message
     
    Cincinnatus - I lived through it. I guess I should have made it clear that PetroFina's CANADIAN assets were bought out and nationalized (made part of PetroCanada). The signs on the gas stations changed. You are getting lost on details. The original point was that government still had options if a private refinery were mothballed. The original comparison was with Hydro Quebec where you complained that an entire industry was being nationalized. That's why I brought up PetroCanada. Perhaps I should have kept it more graphic. If government can amputate all limbs (the Hydro Quebec example), it can surely amputate one limb (one mothballed refinery).
    9 Oct 2012, 11:59 AM Reply Like
  • Cincinnatus
    , contributor
    Comments (6187) | Send Message
     
    This isn't about details - this is about the fundamental basis of your claim. Petrofina wasn't nationalized. Some of their assets were sold to Petro Canada, which had nothing to do with any "nationalization" as you claim. Nationalization is a forced takeover of the private sector. Petro Canada simply successfully bid for assets that Petrofina wanted to divest itself of. Furthermore the creation of Petro Canada didn't nationalize any private sector entity that existed. Petro Canada was created as a crown corporation and assets the Canadian government already owned/controlled were transferred into it. After that it began buying assets from other companies just as any private sector company would do.

     

    Here's info on the Petrofina transaction.
    http://nyti.ms/Qchi7H

     

    In the end, none of this has anything to do with this market comment. California's government can't even run the State itself, they're not going to run a refinery efficiently nor will it make any dent in the CA gasoline market which suffers from supply constraints that have been a long time in the making and is due to the very government that you claim will fix the problem.
    10 Oct 2012, 03:06 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs