Tom Steyer is obviously an intelligent and rational man, given his demonstrated ability to amass great wealth through capitalistic investments.
But since it’s difficult to rationally grasp his periodic rants about California’s gasoline prices, they only make sense in a purely political – i.e., illogical – context.
Steyer apparently believes that complaining about California’s fuel prices, which are among the nation’s highest, will endear himself to the state’s 24.6 million drivers who buy 40 million gallons of gas each day for their cars.
Becoming their champion could set the stage for seeking the governorship in 2018, perhaps after sponsoring a ballot measure purporting to do something about gas prices.
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Steyer and Consumer Watchdog, an organization that launches periodic ballot measures, suggest that refiners are manipulating the gasoline market to run up huge profits and want companies to disclose more information about their profit margins and other data.
“If the Legislature and the courts will not act,” he said recently, “I believe the citizens will have to take matters into their own hands. Either there is something nefarious going on here, or the structure of the market itself is unacceptable. In either case, we need to fix the problem.”
The illogic begins with Steyer’s complaining about high gas prices when his other cause is reducing carbon emissions to curb climate change.
He’s backing Gov. Jerry Brown’s goal of reducing California’s gasoline consumption by half, so logically he should want higher prices to discourage driving.
The second logical gap is Steyer’s alliance with Consumer Watchdog in demanding more financial data from refiners. Consumer Watchdog notoriously refuses to disclose its own financial supporters.
Yes, our gas prices are relatively high, but virtually all of the differential can be attributed to unique factors that the state’s leading expert on gasoline markets, Gordon Schremp of the state Energy Commission, has repeatedly pinpointed.
Just two months ago, at UC Berkeley, Schremp laid out the cost factors for nearly all of the 52.1-cent-per-gallon differential between California and the rest of the nation for “reformulated” fuel. They were higher taxes, 17 cents; higher production costs, 10 cents; cap-and-trade fees, 10 cents; and “an isolated market,” 10-plus cents.
The latter is very important. California requires a unique fuel blend to fight smog, making it very dependent on a few in-state refineries. Therefore, when there’s a strike, a fire or some other refinery disruption, California-only fuel supplies shrink and prices rise.
Were there some “nefarious” conspiracy to keep prices high, as Steyer suggests, California’s prices would not only be high, but stay high.
In fact, however, those prices rise and fall in rough synchronization with those of other states – they’re in sharp decline now – so the main reason for the price differential is, as Schremp tells us, that politicians have indirectly mandated that they be higher.