Monday, January 15, 2007

Oh joy...

In case you don't know, California is rather constrained geographically. There's big mountains between California and the big refineries in Texas and Louisiana, so California's gasoline is largely locally refined. Furthermore, the big oil companies have conspired to keep refining capacity in California limited, closing at least half a dozen refineries over the past 10 years as part of an industry-wide plan (documented in oil industry journals) to bring refinery utilization to 95% from the unprofitable 70% that it was 15 years ago. Because a refinery that is 95% utilized is more profitable than a refinery that is 70% utilized.

The problem is that when one of these mega-refineries blow up, there's no slack anywhere in the system. In short, closing those refineries was good for refiner's profits, but was most definitely *not* in the public interest, because it means when anything happens to one of those refineries, there isn't going to be enough gas for everybody. So the price of gas skyrockets as suppliers try to force pseudo-rationing i.e. discourage people from driving. Meaning, excuse me while I go fill up my Jeep...

The sad thing is that it is mostly the poor here in California who suffer. We relatively wealthy people can simply walk or bike a half mile or so to the nearest mass transit stop and take Caltrain or BART to work. But the teachers who teach our children, the cops who patrol our streets, the janitors who sweep our floors, the "sandwich artists" who fix our lunchtime meal, the "office assistants" (secretaries) who keep our offices running, even the bus and train drivers who drive our trains and busses, none of them can afford to live here on the coast where mass transit is available. They're forced to live inland, in the Central Valley or in L.A./San Diego's "Inland Empire" where mass transit is not available, from where they commute 50 or 100 miles a day (one way) via car to their jobs in the city.

In short, higher gas prices are primarily just another tax on the poor, on top of all the other taxes on the poor. And that's how the ruling elite like it, of course. "Let them eat cake", the ruling elite say.Funny, that's what Marie Antoinette said too. A short time later, the angry starving masses chopped off her head. Imagine that!

-- Badtux the Oily Penguin

Comments:

Hello, Mr Penguin. I was not aware of the refinery closings going on. Thank you for that information.

There has been some commotion from the current administration about the need to build more refineries (utilizing subsidies & tax-breaks, of course), but I have seen where most of these places already have large areas (in some cases, several square miles) cleared, gravel down, infrastructure set up, etc., to expand capacity. There's a refinery (Valero, I believe) in either Illinois or Indiana set to expand its capacity by 50% this year.

And knowing this, I see the "more refineries" argument as another hand-out to the oil companies. Perhaps they're just waiting on their welfare checks to open those other ones.

Another note: Gasoline additives being regulated locally restricts supply. Lack of uniformity ensures that there will always be a pocket of people to gouge, somewhere.
# posted by Progressive Traditionalist : 15/1/07 4:13 PM  

About $2.65 here, and I'm fine with that even though I'm considered poor. I want to see it at ten bucks a gallon.

I have a bike and a Honda scooter that gets 70 MPG.

I could get by just fine on one tank of gas every six months if I needed to. As it is I use about one tank a month.
# posted by BBC : 15/1/07 8:05 PM  

If they stop making gas tomorrow....

Fine with me, I'll deal with it....

Humans are resourceful, other ways of doing things will quickly be found.
# posted by BBC : 15/1/07 8:09 PM  

As I said, high gas prices don't affect me much. My motorcycle gets 45mpg, and if gas gets too high for that to be reasonable, there is a light rail station 3/4ths of a mile from here and it ends up at a Caltrain station where there's a free employer shuttle that stops right in front of my workplace. A one-month pass for the light rail (and local mass transit in general) costs $69. A bargain.

But the poor slobs who work in the service industry are taking it up the bunghole. They already can't afford to live here. Now they can't afford to live "over the hill" either, because it costs so much to drive to work. ("over the hill" == the Central Valley, the redneck part of California). And of course the rich fucks who already live here refuse to allow affordable housing to be built, instead passing restrictive zoning laws that only allow McMansions because, "we must preserve our property values." Because of course property values are more important than human beings...
# posted by BadTux : 15/1/07 9:01 PM  

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