The Unz Review: An Alternative Media Selection
A Collection of Interesting, Important, and Controversial Perspectives Largely Excluded from the American Mainstream Media
 TeasersiSteve Blog
Gasoline in California Costs an Extra $1.33 Per Gallon
🔊 Listen RSS
Email This Page to Someone

 Remember My Information


Bookmark Toggle AllToCAdd to LibraryRemove from Library • BShow CommentNext New CommentNext New ReplyRead More
ReplyAgree/Disagree/Etc. More... This Commenter This Thread Hide Thread Display All Comments
These buttons register your public Agreement, Disagreement, Troll, or LOL with the selected comment. They are ONLY available to recent, frequent commenters who have saved their Name+Email using the 'Remember My Information' checkbox, and may also ONLY be used once per hour.
Ignore Commenter Follow Commenter
Search Text Case Sensitive  Exact Words  Include Comments
List of Bookmarks

Gasoline costs a lot in California. For example, the cash-only price at the Sherman Oaks Arco station (a discount brand) is currently $4.10 per gallon. Some of that is environmental regulations, some of that is high real estate prices. But some of the California Premium seems to be that gas prices out here go up fast (e.g., tensions rise in the Middle East: the price per gallon goes up overnight) and down slow. And quite often lately they don’t come down all the way at all.

From Mother Jones:

The Mystery of the California Gasoline Premium Deepens
Kevin Drum

My vacation along the Blue Ridge Parkway has rekindled my interest in a question I first asked a couple of years ago: why is gasoline so expensive in California? Near me, a gallon of regular costs about four bucks right now. But in Virginia and North Carolina, it’s closer to $2.65. That’s a huge difference, and it can’t be accounted for solely by the higher taxes and environmental requirements here in the Golden State. …

Up until 2015, the California premium bounced up and down a little bit but mostly stayed in the range of 30-40 cents. This made sense. … Then, in early 2015, a refinery fire in Torrance took a bunch of production offline and caused a big spike in the premium. This also made sense.

But it took nearly two years for the premium due to the fire to finally wash out. And once it did—long before California raised its gasoline tax—the premium started to shoot up for no apparent reason. It’s continued to increase for more than two years now. This week the premium reached $1.33.

This is nuts. If you put everything together—taxes, smog rules, cap-and-trade, etc.—gasoline in California should cost maybe 40-50 cents more than it does in Virginia and North Carolina. Why is it nearly a dollar more than that?

… This was first highlighted by Severin Borenstein, a genuine expert who’s a former member of the California Energy Commission’s Petroleum Market Advisory Committee. He wrote about it in 2017 and then again in 2018. Even back then he figured the mystery premium was costing California $3 billion per year, and it’s probably doubled since then. Nevertheless, the response was . . . crickets. Everyone just shrugged and went about their business.

I’ve noted several times that every year, around the time we switch to summer formulations of gasoline, a number of refineries in California seem to mysteriously shut down due to “maintenance” or “accidents” or “labor issues” or some other reason. This causes the price of gasoline to spike, and outside sources usually can’t replace it quickly. …

California uses special formulations of gasoline to fight smog, so if the refineries happen to have little “accidents,” the market can’t legally rush in gasoline from Texas or wherever right away.

But at least this time they’re starting off with the idea that market manipulation might—just might—be part of the problem. And why not? After all, Californians proved long ago that we were suckers for market manipulation by energy companies.

This is a reference to the ridiculous Enron electricity deregulation fiasco of the early 2000s that causes self-inflicted brownouts.

I suspect that part of the problem is that most of the politicians, bureaucrats, and newspapers in California think higher gasoline prices are a Good Thing because they cut carbon emissions and force people to take mass transit instead of driving, but there is only so much they can do publicly to raise taxes. So the oil companies are stepping up and, you know, uh, dropping wrenches into the works that take two months to find, meanwhile causing high prices, but nobody in power calls them on this weird incompetence collusion because they like the results.

Hide 139 CommentsLeave a Comment
Commenters to FollowEndorsed Only
Trim Comments?
  1. Dtbb says:

    How much is a gallon of “premium”. I noticed something similar years ago when oil prices went up. Motor oil was about $1.50 a quart forever that jumped to $3.29 a quart and has never gone back down or fluctuated like gas prices.

    • Replies: @Lot
  2. Cortes says:

    Isn’t that just exploitation of Middle Californian drivers? Why wouldn’t someone close to the state borders fill up the tank elsewhere? E.g

  3. anon[410] • Disclaimer says:

    Also, if the public gets used to higher prices for one reason or another, say because they assume (whether they approve or not) that environmental regulations are to blame, then they’ll just take it on the chin. I mean, people see the higher prices and assume it’s 100% due to enviro-regulations, when really it’s only 50%. But whaddaya gonna do? Can’t fight City Hall.

    Also: competition doesn’t seem to really affect the gasoline market much, in my part of the world or yours.

    • Replies: @Wally
  4. Anonymous[375] • Disclaimer says:

    The mafia had a gasoline tax scheme in the 80s on the east coast that was one of their most lucrative operations ever:

  5. How about, it’s what the market will bear?

    Consider that forcing people out to Lancaster and Palmdale for hour-long commutes drives up the demand.

    Is gas cheaper in Bakersfield? Refinery-glutted New Jersey has usually has the lowest prices in the Northeast, despite it all being full-serve by law. Full-serve isn’t even available anywhere else.

  6. Anonymous[427] • Disclaimer says:

    CNG and LPG are much more practical options for vehicle fuel in California than in much of the rest of the country. Ak Miller was my hot rodding hero and he did a ton of work on autogas performance conversions. As opposed to the Midwest, where fuel is poorly available nd the price differential low or even negative, propane is consistently at least dollar a gallon cheaper. Get a dual fuel car or truck and you get twice the range and cheap fuel.

    Also, California with its warmer weather is a big electric vehicle state. An EV is at a big advantage in stop and go traffic-no idle burn except to run the AC or heater when stopped.

    Motor oil is expensive now because of the new formulations with less of this and more of that and high testing and certification requirements. When I drove old cars I ran AD aircraft oil and changed it often but that will not fly (no pun intended) in modern car engines. Anything newer than the mid-90s needs to have the exact grade the manufacturer says. Even more so with automatic trans fluids. Many are brand specific now, and yes, you really do want exactly that one.

    FWIW, natural gas Hondas are economically available on eBay because most people don’t want them. You can get the car and a garage compressor installed for less than the equivalent gasoline one sometimes.

  7. Anonymous[427] • Disclaimer says:
    @Reg Cæsar

    Oregon is also full service by law.

    Here in Kansas there’s still full service gas if you want it: Waterway car washes have it as do occasional independent stations. St. Louis has one or two stations in the Ladue/ Creve Coeur area too.
    Price is higher than for self service of course.

    • Replies: @Prester John
  8. Anon[520] • Disclaimer says:

    Some background, and summer and winter blend gasoline:

    And California banned MBTE, whatever that is.

    • Replies: @Redneck farmer
  9. Lot says:

    Premium 91 octane is the same extra 20-30 cents it has been forever.

    I think our premium is 91 instead of 93 because it doesn’t get very cold here.

  10. Lot says:

    Gas prices in Tijuana are about the same as California.

    By the way, there is a fast growing gas station chain there where everything is painted pastel pink and the employees are all women.

    • Replies: @Cortes
    , @Mr McKenna
  11. Alfa158 says:

    There are surprisingly few people living near California’s borders. The western border where the greatest number of people is concentrated is the Pacific, the eastern border is mostly desert and the northern border is mostly rural and wilderness. Except for the San Diego area the vast majority of us live a long way from the border. In Los Angeles the nearest border is roughly 150 miles east or south.
    Even if I lived near the Mexican border I would not want to push my luck by making frequent excursions into modern day narco-Tijuana.

  12. Cortes says:

    The reason I raised the question was that along the border between Northern Ireland and the Republic of Ireland there are often long queues into petrol stations on one side while the stations on the other side are empty – people readily take advantage of price variations.

  13. @Lot

    I swear they got that idea from us.

    • Replies: @Mr McKenna
  14. @Mr McKenna


    Sorry, All American Bikini Car Wash is not available in your country.

    • Replies: @Hail
  15. steve already mentioned 2 of the biggest factors. california requires gasoline (and diesel?) that is different from any other state, so 100% of it’s supply must come from refineries specially setup to supply them. if those refineries go down, and they do sometimes for maintenance or accidents, then gasoline from other refineries cannot come in.

    also, this means that there isn’t economic competition. those refineries that supply california know they can charge more, because they have no out of state competitors. maybe they’re even colluding.

    and secondly, the tax rate which the state imposes. california is 55 cents, the second highest.

    another poster mentioned a third factor. gasoline blends have to be different in the summer and winter. this is to lower the pressure in sealed containers which can rise during heat in the summer, so sealed gasoline containers don’t spontaneously detonate.

    in the winter, due to temperatures, pressures are lower, so the refineries can replace some of the gasoline with butane. that’s right. in the winter, your car is burning butane in addition to gasoline. in fact, the gasoline to butane mix is about 8:1 or 9:1. that is, in every tank, you’re burning about 1 gallon of butane.

    in the summer that butane has to all be replaced with more expensive gasoline. so the price of ‘gasoline’ goes up. so in reality, in the winter you’re not buying 100% gasoline even if you’re avoiding fuel with ethanol. you can deliberately avoid this by buying racing fuel or other high octane fuel with a US octane rating of 100 or more, and a few stations sell this. there is zero point to doing this unless your engine is tuned to use this fuel, otherwise, the higher octane fuel is simply wasted and your vehicle uses it to operate at it’s rated octane number.

    lastly, your eyes are not deceiving you. it really is the case that the retailers use any globopolitical pretext to raise prices, but then after the ‘situation’ passes, they really are much slower to lower the prices back to where they were. they deliberately do this, and you’re not seeing things.

    it’s possible california affects itself even more these days politically by not allowing pipelines and various other ways to get crude oil into the state, and to those refineries. so the supply of crude in could be a possible extra expense. pipes, trains, trucks are the main ways domestically. ships from foreign suppliers.

  16. Wahhh! You Guys don’t know how good you have it, living in a Socialist paradise but paying “free market” prices.

    I pay circa £1.30 per litre ($6.25 per gallon) in the UK and circa €1.40 per litre ($6.00 per gallon) on the Continent.

    • Replies: @jim jones
    , @stillCARealist
  17. Anonymous[551] • Disclaimer says:

    It’s an island in terms of connection to rest of the country. No pipes bringing in RBOB or crude. So it’s reliant on imports (state production inadequate) and is at the end of the road in terms of Brent/ME shipments. In addition, limited number of players.

    Way to fix it is run a crude pipe down I-10 (from the Permian) to get lower priced supply (maybe a products pipe too, but start with crude). Of course the tree huggers won’t allow it. Too many turtles and rats disturbed.

  18. jim jones says:
    @The Alarmist

    Yes but your taxes fund the NHS so you get free unlimited healthcare. At least that is what my Leftist friends tell me every time I complain about taxes here in the UK.

    • Replies: @The Alarmist
  19. I believe you’re flailing around for the phrase “Baptist-bootlegger coalition” (the Wikipedia article is entitled Bootleggers and Baptists), Mr Sailer …

    • Agree: Desiderius
  20. I don’t want to sound like no Libertard or nuthin’, but TAXES, REGULATION (some of it was about the MTBE) have got to be most of that premium that Californians enjoy. I paid $2.32/gallon last week. Enjoy the weather, Steve!

    • Replies: @Desiderius
    , @Buffalo Joe
  21. @Anonymous

    How about that big old refinery that takes up 1/2 of the whole city of El Segundo? Is it gone? There were tankers unloading the crude offshore maybe 1/2 mile or more to a line under Santa Monica Bay that would bring it in to that refinery. Then there were oil right all around that one neighborhood – I can’t remember the name, but north of LAX a bit.

    • Replies: @Achmed E. Newman
  22. @Anon

    MTBE is an octane booster. Unfortunately for the oil companies: 1. It destroys seals and gaskets of most cars, 2. Because of #1, it has a habit of leaking into groundwater. Some worry about possible cancer risks, but a bigger problem is that it can be tasted at extremely low levels. And it tastes horrible by all accounts.

  23. @Achmed E. Newman

    Too early – “oil pumping rigs” is what I meant. I can’t for the life of me remember the neighborhood, but it was one big rolling hill.

    • Replies: @Anonymous
  24. anon[166] • Disclaimer says:

    This chart from here seems to show California’s Low Carbon Fuel Standard really kicked into gear in 2015-2016 (right when the margin shifted).

    I’m no expert, but are they calculating for the environmental standards correctly? They seem to assume the compliance costs are some constant, whereas this chart, as I read it, seems to imply costs would increase as the standard incrementally steps up. Again, I know next to nothing of the petro market, but that makes me somewhat skeptical of their analysis.

    Another possibility: underlying market change. Just speculating, but lets say, pre-fracking, when the US was more import reliant, bringing an oil barge from Saudi Arabia to Houston vs. LA might have been a similar in cost. But now, the Eastern 2/3rds of the US is awash in homegrown fracked oil and need not import, but perhaps CA still has to and it’s more expensive.

  25. @Cortes

    Illinois residents living near the Indiana line commonly cross over to purchase gasoline, cigarettes, and groceries.

  26. “So the oil companies are stepping up and, you know, uh, dropping wrenches into the works that take two months to find, meanwhile causing high prices, but nobody in power calls them on this weird incompetence collusion because they like the results.”

    It’s almost like battling climate change is nothing more than a penalty for consumers and an opportunity for crony capitalism/globalism.

    • Replies: @Forbes
  27. @anon

    Okay, so maybe what’s going on is less that prices are going up in California than that they are going down east of the Rockies?

    This stuff is very interesting, and some people must follow gasoline prices the way other people follow baseball statistics, but it’s hard to find anything very authoritative about it. For example, I’ve long wondered why gasoline prices peaked in June 2008. I can remember being depressed by having to pay $87 at a cheap Arco station to fill my minivan then. I strongly suspect that the rise in the price of gasoline in the first half of 2008 contributed to the crash in exurban housing prices that set off the Great Recession of 2008. I finally found an intriguing explanation: the Chinese were stockpiling oil to burn instead of coal during the 2008 Beijing Olympics. As somebody who finds the Olympics interesting and thinks they have a surprising amount to do with history (e.g., the 1984 opening ceremony is the moment everybody realize Reagan would be re-elected and that the 1980s were different from the 1970s) that theory appealed to me. But I haven’t found anybody to critically argue against that theory either, so I don’t think it has been tested enough. Nobody seems all that interested in recent economic history.

  28. @Cortes

    I can recall my parents discussing whether to get quality but expensive gas in San Diego or cheap gas at Pemex in Tijuana in the 1960s. But the proliferation of AK-47s south of the border since the 1990s and the two hour waits to get back into the U.S. discourage casual driving visits to Mexico.

    In general, almost nobody in California lives near the border with other U.S. states.

  29. bucky says:

    If I recall, most of the oil that is recovered in fracking operations is not the light sweet crude that is best for vehicles. Eg despite the fracking boom, most of the oil that your car uses is itself from overseas.

    Environmental regulations are good. I see an ungodly number of spotless pristine Ford F150 trucks being used to commute to the office. People just flagrantly waste fuel when it is cheap like it is now.

  30. @prime noticer

    Other than Mr. Sailer, I could really care less about Californians getting screwed over gas prices. All of the other Californians I know are big Lefties so let them eat their damn cake.

  31. @jim jones

    Free, unlimited healthcare … LOL, that’s a good one! At least BUPA doesn’t kid you about “unlimited” healthcare.

  32. @Steve Sailer

    It is worthwhile to detour through Luxembourg from time to time; you see plenty of Germans and French there, some with steel barrels.

  33. Travis says:

    California’s stringent environmental regulations have isolated it from the larger gasoline market. both the summer and winter blends of gasoline used in California are more expensive to produce than those used in any other state…transportation costs for refineries and service stations are much higher because California has no interstate pipelines. Any gasoline that is produced by refineries outside of California for use in California must be transported by truck or ship – both of which are more expensive.

  34. I haven’t seen an Arco station in decades! I did not know they were still around. I guess they only closed in this part of the country. When I was a kid, there was a car wash that was an Arco station. Their sign could be seen for miles.

  35. @bucky

    Maybe, but it seems like the big drop in gasoline prices seemed to pretty strongly coorelate with the drop in crude oil prices. It wasn’t quite as much, but it was fairly close, I remember pump prices dropping around a dollar a gallon in the span of perhaps four to five weeks here in the Midwest. Perhaps they have figured out how refine those heavier oils for vehicles.

  36. Bill H says: • Website

    Every once in a while we get a news item about a refinery down for maintenance being the cause of a gasoline price increase, with reference to the “law of supply and demand.” This “law” is, of course, entirely bogus.

    A reduced supply of a commodity does not in any way justify raising the price of that commodity. The shortage allows raising the price, but all that increase does is increase the profit made by the supplier, because the shortage does not increase costs at all. It makes buyers more desperate to buy, and willing to pay a higher price, but it is profiteering and is actually illegal.

    • Replies: @anon
  37. @Reg Cæsar

    Is gas cheaper in Bakersfield? Refinery-glutted New Jersey has usually has the lowest prices in the Northeast, despite it all being full-serve by law. Full-serve isn’t even available anywhere else.

    Not so! Oregon is also all full-serve by law.

  38. Cost of a socialist state. All that free stuff isn’t free after all, unless you’re an illegal.

  39. Barnard says:
    @Steve Sailer

    If your theory on China stockpiling gasoline is correct, how long before the 2022 Winter Olympics, which are also in Beijing, should we expect another spike?

  40. @Steve Sailer

    For example, I’ve long wondered why gasoline prices peaked in June 2008.

    So have I. I very distinctly remember paying over $4/gal in Georgia at the time. Currently it’s around $2.65/gal. Compared to 2008 it’s like the 1950’s again, with people driving gigantic SUVs and pickups.

    I seem to recall Paul Craig Roberts speculating that banks were grabbing oil futures in 2008 with TARP money but who knows. Any way, it was a really strange episode which made no sense with the economy headed into recession.

    • Replies: @Art Deco
    , @Jim Don Bob
  41. Mike says: • Website

    It’s been 20 years since I financed gas stations (convenience stores). I imagine, in light of your post on the taxi medallions, that the most common surname of the typical borrower in that industry has changed from something like Smith to Patel or Mohammed. So add financing costs to those high land costs.

    The marketplace dynamics are interesting. The supply comes to the gas station from an international market. The operator gets up every morning and can see the movement in futures prices for gasoline (he has some metric for conversion to his local cost). All the operators at any particular corner do the same thing.

    They work in a market with pricing done on a world wide basis for their supply, but they compete locally at that intersection.

    Because of the world wide price on supply, but the hyper local intersection competition, the operators are reluctant to raise prices. Their margins get skinny in an environment of rising prices.

    When the prices for gasoline are falling, they are equally reluctant to lower their prices as that is when they make money. Their margins open up in an environment of falling prices. The best market for the convenience store is where gasoline prices are in a slow steady decline. They make hay when that happens.

    There is a lot of collusion going on at that corner. It is not done with phone calls, texts, or meetings. It is done through the sign that the state requires them to post their prices on.

    • Replies: @indocon
    , @Barnard
  42. @Achmed E. Newman

    If you buy gas at your grocery store, you can routinely fill up for 1.70 per gallon.

  43. It is doubly punishing in states with a lot of long-haul desk-jockey commuters. CA’s citizens add gas uphikes to the Big Gulp cup of too-damned-high rent prices. But any inflation outside of unaffordable rent is just as brutal in states with a much lower wage base, where rent is just as insurmountable in context.

    After I got out of luxury sales, I worked at the opposing pole: poverty-industry sales. I often wonder what my former industry looked like during the 2008 housing collapse and the accompanying mini gas-shortage crisis. My former, deep-pocketed customers couldn’t have been more shocked than my poverty-industry customers.

    A typical example is a young, impoverished, Black girl who walked into the building with a bewildered expression on her face, telling us she could not believe it. All of the gas pumps in the city were covered with plastic wrap. This only lasted for a day or two.

    Wonder what the snake-oil shale-oil-miracle meltdown will look like?

    • Replies: @Jim Don Bob
  44. @Anonymous

    In my town here in lower Fairfield County, Connecticut (a state which also has high gasoline prices) a local Gulf station has a guy pumping gas (no self-service). Regular is $2.89. Diagonally across the street at the Shell station, which is self-serve, regular is well above $3.00. Ok, Shell is a Dutch company and the dude at the Gulf station is somebody “off the boat” (as they used to say) who’s probably being paid below minimum wage off the books but, nevertheless, the discrepancy is telling.

    • Replies: @Reg Cæsar
  45. @anon

    I think real estate costs figure into it as well, development costs are so much higher in California than practically anywhere else in the country. Arnold Schwarzenegger had to waive all those regulations just to get a new football stadium built in L.A. after twenty years of no development.

    Even here in the Midwest, there are some noticeable gas price differences. Older surburban areas have more expensive prices than more recently developed areas, even though the population density seems comparable. The only differences I can think that could account for that are city wide zoning regulations, the areas that differ are often in the same state and county.

  46. res says:
    @prime noticer

    Have those factors changed that much over the last decade or two? What I find striking is how much the gas price seems to have decoupled from oil prices. CA is near all time high gas prices while oil prices are less than half of their high.

    • Replies: @Almost Missouri
  47. res says:

    Thanks. That is a useful example of what is different now. The way the standard just keeps declining is worrisome. Here is some analysis of the effect of the Low Carbon Fuel Standard and Cap and Trade on gas prices.

    (for C&T)
    “Cap at the Rack” adds about 13 and 14 cents per gallon (cpg) to the cost of gasoline and diesel, respectively … C&T program going forward. The results are summarized in Table 1 and show additional fuel costs ranging from 42 to 139 cents per gallon.

    (for LCFS) In 2030, costs range from 47 to 71 cpg, and this compares to costs today of 8 cpg for diesel and 12 cpg for gasoline.

    To assess the potential costs of these programs in the future, we combined the costs of these programs in 2030 using the range of C&T allowance prices and LCFS credit prices from the above analyses. The results are shown in Table 3 below. Total costs added to gasoline and diesel from the C&T and LCFS regulations are found to vary between 89 and 210 cents per gallon.

  48. @The Alarmist

    Yes, but you’re all jammed into crowded cities and close towns. Buses and trains actually make some sense in your country. It would take me over 3 hours to take a bus and train to the other side of Sacramento. I could drive there in 30 minutes. Heck, I could bike there in about 2 hours. And all this is during commuting traffic.

  49. techanon says:

    >So the oil companies are stepping up and, you know, uh, dropping wrenches into the works that take two months to find, meanwhile causing high prices, but nobody in power calls them on this weird incompetence collusion because they like the results.

    I straight up believe that antifa cells, environmental activists, or whatever, are routinely sabotaging California transportation and energy infrastructure. They have way too many mysterious failures for this to be anything else.

    • Replies: @Alden
  50. istevefan says:
    @Steve Sailer

    (e.g., the 1984 opening ceremony is the moment everybody realize Reagan would be re-elected

    Really? That was only 3.5 months before the election which was one of the biggest blowouts in US history. People really doubted Reagan’s chances until the opening ceremony of the LA Olympics?

    • Replies: @Desiderius
  51. res says:
    @Steve Sailer

    Some background on the Chinese SPR:
    Some of that timing aligns with your theory (even though it is not Olympics related AFAICT).

    Here is a June 2008 article which mentions the Olympics:
    It also makes clear that the oil market was concerned about China right before the peak.

    50 page report also from June 2008:

    Here is a brief November 2008 piece which pretty much blames the spike/crash on the change in Chinese consumption:

    Here is an August 2008 piece from Forbes which makes clear China was a part of market psychology at the time.

    China is smart enough to stockpile oil when the price crashes. Why can’t the US do that?

    It looks to me like your theory holds and was known at the time. But I don’t recall hearing much about it then or now.

    Steve, have you seen any good after the fact (detailed) exposition of the China/Oil connection leading up to 2008?

    Have you seen this 2012 paper about gas prices and the housing crisis?
    How High Gas Prices Triggered the Housing Crisis: Theory and Empirical Evidence
    Article about the paper:

  52. Art Deco says:

    You have a highly decentralized retail market of an undifferentiated product. This isn’t driven by collusion among producers or vendors. It’s just one small reason, among 100 others, to not live in California.

  53. @Steve Sailer

    In general, almost nobody in California lives near the border with other U.S. states.

    But there’s one interesting exception: South Lake Tahoe. The state border runs right through there, with no mountains to cross or anything. You’d think there’d be a lot of gas stations on the Nevada side, and yet there aren’t. There are only two (neither of them particularly close to the border actually, and one cleverly hidden on a side road). The California side boasts over a dozen.

    Type “gasoline stations” into Google Maps and you’ll see where the stations are and what they’re charging today.

    • Replies: @Barnard
  54. @istevefan

    It was the culmination of the recovery from Vietnam that began with Stripes.

    • Replies: @PV van der Byl
  55. Art Deco says:
    @Steve Sailer

    (e.g., the 1984 opening ceremony is the moment everybody realize Reagan would be re-elected and that the 1980s were different from the 1970s)

    People realized in the fall of 1982 that 12% annual inflation had been replaced with 4% annual inflation. Some of us also noticed in 1982 that we were in the midst of wretched levels of unemployment but index crime rates were seeing slight declines. In late 1982, the discourse peddled by Democrats in the media had it that we were in the midst of a ‘self-sustaining recession’, a proposition rapidly discredited during 1983.

    Reagan’s approval ratings moved into positive territory in November 1983 and so remained for the next 3 years w/o interruption. See James Michener’s article arguing for Walter Mondale which hit the presses at the beginning of June 1984 (nearly two months before the Olympics opened). His argument was that Mondale was the Democrat who could lose while doing the least damage to Democrats down-ticket. Prominent Democrats were quite demoralized at that point.

    • Replies: @Desiderius
  56. Clyde says:

    California has the most eco-masochists of any state, so they will accept the outrageous gasoline prices. They get might get a sinking feeling as they fill their tanks, but then they think of themselves “saving the planet” so all is well.

    • Agree: Prodigal son
  57. A few years back I used to travel between Madison and San Francisco frequently. I never bought gas in SF, but I passed by gas stations every day.

    It seemed that the cost of gas in SF was always exactly $1.00 more than in Madison. One time the price of gas rose by a few cents during a trip. When I got back to Madison, the price had changed by exactly the same amount back home.

  58. @bucky

    Fracking produces light sweet crude, which is good for making regular gasoline but yields less diesel fuel.

  59. Does your owner’s manual state “premium” as the required grade of gasoline for your car? If not use a lower grade because premium adds nothing to the performance of your car. If the manual does require premium I’d trade the car in for one that does not.

    • Replies: @sanjoaquinsam
  60. If our leaders had brains and/or balls, we’d have a country where most vehicles on the street were electric and powered by nuclear energy. Perhaps there are valid and sound reasons why this shouldn’t or couldn’t be so, but they elude me.

    • Replies: @J.Ross
    , @Prodigal son
  61. @Simply Simon

    In the case of this discussion “premium” is referring to the price difference (higher) that California motorists enjoy in relation to non-California sold gasoline. Not referring to fuel grade.

    But you’re right that higher octane does not mean higher performance for most vehicles.

  62. California will probably ban gasoline in a few years and force all car buyers to purchase expensive electric cars. If you thought $4 gasoline was expensive , a typical battery powered car will add another $12,000 to the cost of your vehicle.. you can buy 3,000 gallons of gas- enough to drive a Camry 100,000 miles.

  63. danand says:

    Not to worry, Governor Newsom is going to get to the bottom of it:

  64. Or maybe its backdoor dealing is an attempt pay down California’s huge debt’ exacerbated by years of Enron overpricing and the state’s lousy financial mismanagement.

  65. Art Deco says:
    @The Anti-Gnostic

    The TARP legislation wasn’t passed until the fall, so that doesn’t explain summer price spikes.

    • Replies: @The Anti-Gnostic
  66. @Art Deco

    I remember being turned off by the whole Morning in America thing, but that opening ceremony had a whole different vibe to it. Like Ali at Atlanta. After that I was ok with Reagan and what he stood for.

    My family voted for Anderson in ‘80.

  67. anon[315] • Disclaimer says:

    If I recall, most of the oil that is recovered in fracking operations is not the light sweet crude that is best for vehicles. Eg despite the fracking boom, most of the oil that your car uses is itself from overseas.

    Fracking produces very light oil.

    US refineries mostly use heavy imported crude. Heavy oil produces more refined product, and the volume gains are a source of US product. Refinery process gains are due to the high specific gravity of heavy oil.

    Canadian tar sands oil is quite heavy but imports are limited by pipeline bottlenecks.

    Basically, the US uses and refines huge amounts of gasoline, and exports fracked oil and imports heavy oil.

  68. indocon says:

    Exactly. The gas station business in CA is dominated by south asians and that kind of collusion would be daily event back home that now body would even think is wrong.

  69. @Prodigal son

    Assuming battery prices per kWh stop falling and crude prices remain low

    But you might be right, California will probably be the first state in the US to stop selling new ICE vehicles

    • Replies: @Anonymous
  70. @Prester John

    The gas may be doctored, too.

  71. Alden says:

    It’s $5.29 at the most expensive, Phillips 76. Much of the increase is the summer tax the democrat legislature voted in years ago. The idea is that auto emissions are destroying Mother Giai. Meanwhile, the same democrat legislature is bringing in more immigrants who buy and drive cars every day.

  72. Alden says:

    It’s the state taxes, especially the summer tax designed to save Mother Giai from auto emissions.

  73. @Art Deco

    Like I said, I have no idea, but $4+/gal seven years ago was very strange and episodic.

  74. @Steve Sailer

    The last chapter in Matt Taibbi’s Griftopia explained the 2007 puzzle to me, oil for $147/barrel at the same time oil company presidents were saying, “We can make a profit at $80.” What market could be harder to manipulate I always thought until I read Taibbi’s explanation: Wall Street finally broke the “prudent man” rule for retirement funds, “no commodities.” Their sales forces were soon out pitching to retirement funds everywhere.

    Only two requirements for Wall Street to make money, (1) price fluctuation, and (2) asymmetry of information. They made money on the way up, and on the way down.

  75. I bet the “average” California price used for these studies is the average price per station rather than the weighted average price per gallon sold. This could actually make a big difference as it appears that individual urban stations in California follow wildly different pricing models.

    For example, there is one particular Shell station at the corner of Olympic and Fairfax that has fascinated me for years due to its overt business strategy of charging insanely high prices. At the moment, it is charging $5.20 – $5.50. It is on a super-high traffic corner yet almost nobody ever stops there.,-118.364007,15z/data=!4m5!3m4!1s0x0:0xc05fc051e3456ea4!8m2!3d34.058444!4d-118.364007

    By contrast, a mere half-mile down the street on the corner of Olympic and LaBrea an Arco sells gas at $3.80-$4.10. And it is always crowded to the point that there is a line around the corner.

    The Shell’s target customers are presumably people who are too busy or too wealthy to go out of their way to save a few bucks, or who are oblivious to the price because they believe all stations must be about the same. It probably sell about 2,000 gallons a day at $1.80 markup from wholesale to these people and is making a killing.

    The Arco targets the rest of the market and probably sells 20,000 gallons a day at a 10 cent markup and then tries to make it up on overpriced Slim Jims and slurpees.

    So the chains and/or individual stations seem to have shrewdly carved up their micro-markets to target different price sensitivities. I would not be totally surprised if there was at least an “implicit” agreement between Shell and Arco to carve up the market segments like this.

  76. Barnard says:

    I have been told by station operators in the last few years, they make some money during the steady falling prices time, but it almost all their profits come from inside sales of food and beverages. If they can’t get people in the door to buy junk food, soda, energy drinks, alcohol, etc., they can’t keep the doors open. They make almost nothing on tobacco and lottery tickets, but sell them because the addicts that buy them routine purchase the other high margin stuff too.

    • Replies: @Mike
    , @Forbes
    , @Jim Don Bob
    , @anon
  77. As an anon mentioned above, it’s Brent vs WTI. Brent is used worldwide, so it’s a more competitive (expensive) market.

    Not sure why this such a surprise to Mother Jones, other than it’s purely a market force and nothing to do with EVOL! conservatives or gas companies.

  78. @Achmed E. Newman

    Achmed, apparently Native American reservation gas stations and smoke shops are an east coast feature. Gas on the res is always way less than off the res. 7-11 price this week for regular was $2.89 and on the res about 30 cents cheaper. My kids in Ohio have frequent shopper cards at Giant Eagle and redeem their points at Giant Eagle’s “Gas and Go” stations. Often they pay less than $2.00 per gallon.

    • Replies: @Almost Missouri
  79. poolside says:

    Most of the oil and gas majors got out of the retail business a decade or so ago, selling their stations to branded distributors who often own hundreds of individual outlets.

  80. Mike says: • Website

    Like I said in my original comment… it’s been twenty years. Given what indocon said at comment #68, and what you are saying, I’m not surprised that the margins have been driven to subsistence levels.

  81. Barnard says:
    @International Jew

    I-10 and I-8 at the Arizona/California border both have major differences across the stateline. According to Gas Buddy, the price in Yuma, Arizona is $3.17 and it is $4.79 just over the border in Winterhaven, California. At I-10, it is $3.15 in Ehrenberg, Arizona and $3.99 in Blythe, California. The difference in this case is that Blythe is ten times the size of Ehrenberg. Google Street View of the Flying J travel plaza in Ehrenberg makes it look very busy.

    • Replies: @International Jew
  82. Forbes says:

    is at the end of the road in terms of Brent/ME shipments.

    Prudhoe Bay oil shipments?

  83. Forbes says:

    is at the end of the road in terms of Brent/ME shipments.

    Prudhoe Bay oil shipments?

    • Replies: @Anonymous
  84. J.Ross says: • Website
    @Malcolm X-Lax

    Please drop by Detroit so we can observe the motorists, and you can point out to me which one you trust with a fission-powered vehicle.

    • Replies: @Malcolm X-Lax
  85. Forbes says:

    “So the oil companies are stepping up and, you know, uh, dropping wrenches into the works that take two months to find, meanwhile causing high prices, but nobody in power calls them on this weird incompetence collusion because they like the results.”

    Yeah, because taking your refinery off-line (wrench dropped in the works) so the competition reaps the revenues from the ensuing price increase makes complete sense. Not.

    Workers have been know to sabotage/damage equipment out of spite due to a labor dispute with management, but it’s dumb, dangerous, and costly. If you’re found out, you’re fired from the highest paying job you’re likely to ever enjoy.

    And the other hand, how many times has Congress investigated oil companies when prices rise for price fixing/gouging/manipulation and ever uncovered anything close to what Kevin Drum alleges. It’s always some extraneous event–a supply disruption of one sort or another.

    It explains why Kevin Drum writes for a rag like Mother Jones–he hasn’t a clue how the real world works.

    • Agree: Travis
    • Replies: @anonn
  86. Forbes says:

    Convenience stores that sell gasoline are similar to movie theaters–the gas or the movie is the draw, while business profit is made on the other consumables purchased by the customer.

  87. Anonymous[427] • Disclaimer says:
    @(((They))) Live

    If I lived in SoCal and were able bodied enough to do my own basic maintenance I’d drive nothing but vintage cars forever. They don’t rust and you can upgrade them to mostly modern reliability and it would piss off the eco-freaks.

  88. Anonymous[427] • Disclaimer says:
    @Prodigal son

    Electric cars are in the long run nuclear cars, they make nukes much more economically attractive. Outside the PNW with its hydro resources they make “renewable” energy even more nonsensical.

    If electric cars come down in price enough, the choice won’t be between nuke and no nuke, it will be do we want GE BWRs on MOX fuel or intrinsically safe thorium HTGRs.

    It is more efficient to run cars directly on CNG or LNG than to burn natgas in power stations and charge from there. Nat gas is clean burning. The enemy of alt auto fuels is Iowa and its corn derived ethanol interests. And Kansas for not moving up its primary to take the heat off the ethanol resistance movement.

    Ethanol from other sources might or might not be a thermodynamic abortion, but there do not seem to be any really feasible ones. It works in Brazil.

    • Replies: @Redneck farmer
  89. PSR says:

    I don’t think there really is any mystery here. He doesn’t provide evidence that taxes and environmental requirements are not wholly responsible for the high price of gas. I just don’t think Californians want to admit that this is what they’ve chosen.

  90. Hail says: • Website
    @Mr McKenna

    When this is your country:

  91. anonn says:

    Except this is exactly what the Enron crooks did once the electricity market was deregulated. This is even economically advantageous (assuming you’re a greedy parasite with no soul). If taking your refinery off line for 1/2 of the time increases your profit per gallon from 20 or 30 cents to $2, go ahead and run it half as much.

    Personally I blame the California Democratic Party’s weakness for these problems. They should have nationalized the whole electricity industry on about day 2 of the Enron rape, and they should nationalize the oil refineries now. The market is never going to fix any this.

  92. Anon[128] • Disclaimer says:

    This is a drag on California’s competitiveness vs. other states. The Golden States natural advantages are many but too many regulatory burdens and high prices (homes and products) act as a self-imposed obstacle.

    • Replies: @Anonymous
  93. @The Anti-Gnostic

    Thank a fracker if you like low gasoline prices.

    • Replies: @Steve Sailer
  94. @Barnard

    Interesting. Indeed, lots of gas stations on both sides of the border (unlike South Lake Tahoe). And so, how do the stations on the California side stay in business??

  95. Anon[116] • Disclaimer says:
    @Steve Sailer

    I’m a big time Olympics fan. I was standing outside the Colosseum during the 1984 opening ceremonies. No money for tix. I remember looking in wonder at a miniature television that someone had brought: technology was amazing.

    I am also a big fan of Peter Ueberroth. It kills me that all the biographies and books about his management of the games are out of print and not available for Kindle.

    I think that business owners are a big untapped market for politics, and I believe we need more non professional politicians (AOL is a pro politician to me since her pre politics jobs were trivial) and more non lawyers. Ueberroth was a prime example of a really competent guy pulled out of a San Fernando Valley travel agency, who really thought out of the box, hired good people, and implemented.

    Oddly, I thought of Ueberroth when Donald Trump ran and was dumped on for not divesting all his business interests. Well, neither did Bloomberg, really. Everyone knew Bloomberg was keep an enemies list and would be back at his company eventually. Trump’s holdings are not the sort of thing you can easily unload anyway, not like stock. But in light of my feelings that closely held business owners were a talent pool that should be tapped, I was completely OK with a certain degree of conflict of interest, and still am.


    Japan has used the Olympics as an excuse to push forward various agendas. Restaurants were almost made nonsmoking, but special interests diluted the law. Unfortunately the maglev train from Tokyo to Nagoya wasn’t one of the projects benefiting from the Olympics: Just can’t do it in time, apparently. I’m not even sure that the route and rights of way are totally cleared up. But it’s a wonder to watch how such a project zips right along, compared to the bullet train project in California.

    Olympics and transportation have one thing in common: They are almost always bad investments from a completely rational point of view, before they are done. But they almost always turn out to have been good when viewed after the fact, in my personal opinion. Transportation projects open up new dimensions that could not be seen in advance, and Olympics leave cities with a hard-to-describe ineffable spiritual benefit.

  96. @Anonymous

    Thanks to the 2007 Energy Security Act, we can’t use sweet sorghum or sugar beets for ethanol production. And when calculating the energy yield of grain ethanol, you need to factor in distiller’s grains. The leftovers from ethanol production are pretty good cow feed.

  97. @Barnard

    I was told years ago that the margin on a gallon of gas is $0.04 a gallon. So you sell 10,000 gallons a week and you make $400. Not enough to keep the doors open so you gotta have a convenience store attached.

    • Replies: @Anonymous
  98. @Endgame Napoleon

    After I got out of luxury sales, I worked at the opposing pole: poverty-industry sales.

    What are poverty-industry sales?

  99. @Jim Don Bob


    The energy industry’s huge advances more or less saved the American economy post-2008. I sure didn’t see them coming.

    • Replies: @Jim Don Bob
    , @Hail
    , @anon
    , @Art Deco
  100. ziel says:
    @Reg Cæsar

    I think more important than refinery-rich we are gas-station rich – New Jersey seems to have an unbelievable number of gas stations – I must have a dozen within 2 miles of me in quite a nice suburban town.

  101. @Steve Sailer

    I know some people in West Virginia who have a well on their farm. They were getting some pretty good dollars for a while and then the well owner shut off the well because there was so much gas and so few pipeline connections to major pipeline trunk routes that they couldn’t get the gas to market.

    Another friend is a contractor to Shelll which is building a pipeline to a cracker plant in Monaca.

    We are awash in natural gas in the USA.

    OPEC, led by our BFF Saudi Arabia, tried to bankrupt US frackers by lowering its price. Didn’t work. US production got more and more efficient.

    A sensible energy policy would be to build hundreds of nuke plants as the French have done, convert OTR trucks to CNG, and tell Saudia Arabia to go f**k itself. I am not holding my breath.

    • Replies: @Anonymous
    , @Travis
  102. Hail says: • Website
    @Steve Sailer

    The energy industry’s huge advances


  103. @res

    California is essentially a separate market from the rest of the country. While California’s population—and therefore petroleum demand—is increasing, but supply of fuel that can enter through California’s dedicated pipelines and refineries is static.

    So California’s prices really are determined by supply and demand, but while demand is up more than the rest of the country, supply is constricted more than the rest of the country by California’s idiosyncratic fuel and environmental regulations.

  104. Anonymous[427] • Disclaimer says:
    @Jim Don Bob

    We’d be better off if there were a minimum legal markup on gasoline.

  105. anon[273] • Disclaimer says:
    @Bill H

    Every once in a while we get a news item about a refinery down for maintenance being the cause of a gasoline price increase, with reference to the “law of supply and demand.” This “law” is, of course, entirely bogus.

    A reduced supply of a commodity does not in any way justify raising the price of that commodity. The shortage allows raising the price, but all that increase does is increase the profit made by the supplier, because the shortage does not increase costs at all. It makes buyers more desperate to buy, and willing to pay a higher price, but it is profiteering and is actually illegal.

    when i last followed this stuff there were radio talk show hosts claiming that there hadn’t been a new refinery built in this country in several decades because of the environmentalist movement so as a result there is a shortage or refining capability in this country so when one goes down for maintenance they all can’t wait to jack up the prices

    another thing that may be going on in California is the independent gas station owners got squeezed out because most stations had to replace their underground fuel storage tanks 10-15 years ago because of the MTBE problems and this supposedly cost each station $200k+ and of course the smaller ones couldn’t afford that and had to sell or close……..less competition = more opportunity for price collusion

  106. Anonymous[427] • Disclaimer says:
    @Jim Don Bob

    A sensible energy policy would be to build hundreds of nuke plants as the French have done, convert OTR trucks to CNG, and tell Saudia Arabia to go f**k itself. I am not holding my breath.

    This makes so much sense that failure to do this, or even advocate it, lends credence to the “Conspiracy Theory” that US energy policy is primarily oriented towards keeping us in the Middle East.

    CNG vehicles make sense but counterintuitively it is critical to get consumers rather than fleets to adopt it to build out sufficient infrastructure that most fleets will consider it. The alt fuel industry is completely fleet oriented but most fleets want a fuel they can get anywhere because drivers run vehicles dry and when they do don’t want a four figure tow bill or to have to have a fuel truck to send out. CNG engines are also more like gasoline engines than diesels and need to be set up and geared very diferently, making Class 8 CNG/LNG/LPG uinattractive to drivers too.

    We’d be smart to charge every gas station flowing an average or better gallonage a one cent a gallon tax if they don’t sell CNG or LPG motor fuel and double the tax every year or two. They’d have to put in the pumps or charge more for gasoline than their neighbors. Also use the CAFE laws to make CNG much more attractive for Escalades, Suburbns and similar.

    Basically the impediment to CNG vehicles is no one will buy them until the fuel is readily available and no retailers will put in pumps until there is demand.

  107. Anonymous[427] • Disclaimer says:

    Yes, but California is still the American Dream. They can afford to screw businesses because the executives want to be there. HOW MUCH they can screw businesses is the issue. When the hipsters move en masse to Kansas City, they’re screwed, but I don’t think they are near that point yet. I think California can and will screw its people some more for quite a while and it knows it.

  108. @Malcolm X-Lax

    Electric cars May never be competitive with Gasoline powered vehicles and it takes hours to charge a car battery. The US should stop subsidizing electric cars and allow more drilling. A Chevy Bolt costs 39,000 and is smaller than a Toyota Corolla or a Honda Civic which costs $19,000 and gets up to 40 MPG

    A Bolt has a range of 200 miles , but takes 8 hours to charge. A Civic can go 400 miles on a tank of gas and be refilled in 5 minutes. The $20,000 you save buying a Civic instead of the Bolt can buy over 5,000 gallons of gas, enough to drive 200,000 miles.

    Nuclear power remains much more costly than Natural gas power plants. With our abundant natural gas we should be building more pipelines and expand drilling in Alaska. Stop forcing Americans to use ethanol and the cost of gasoline falls 8% and MPG goes up 9% and the cost of corn feed falls, reducing the price of milk and beef. Americans would be far wealthier if we stopped the ethanol madness.

  109. @Reg Cæsar

    ‘…Refinery-glutted New Jersey has usually has the lowest prices in the Northeast, despite it all being full-serve by law. Full-serve isn’t even available anywhere else.’

    If by full-serve you mean a gas station employee pumping your gas, that’s also legally required in Oregon.

  110. Travis says:
    @Jim Don Bob

    first we need to build the pipelines…So much natural gas is being burned off because it is too costly to transport the natural gas.

    In America’s busiest oil field, roughly $1 million worth of natural gas is burned away every day, going to waste. Shale drillers in the Permian Basin of Texas say they have no way to move the gas—a byproduct of oil drilling—to market because there aren’t enough natural-gas pipelines. Instead, they are getting rid of the excess gas by setting it on fire, a practice known as flaring. Since 2010, 30% of the natural gas in the Bakken region has been burned off or flared. It was worth an estimated $2.4 billion. Flaring has alway been a part of oil production, conventional or otherwise. Natural gas often is found with oil reservoirs and when adequate infrastructure doesn’t exist to capture both the oil and gas, the gas is flared, or burned, while the oil is captured and sold.

    • Replies: @Anonymous
  111. @Cortes

    Why wouldn’t someone close to the state borders fill up the tank elsewhere?

    I’ve wondered about this myself, but apparently they don’t. The town of Blythe, CA sits across the border from Parker AZ. Gas in Parker was around 80 cents a gallon less than in Blythe last I checked. You can get on Interstate 10 in Blythe and drive maybe 5 miles to an exit in Parker where there’s a station. Yet enough people buy gas in Blythe that the stations there are still in business.

    • Replies: @Anonymous
  112. Anonymous[427] • Disclaimer says:
    @Prodigal son

    Americans would be far wealthier if we stopped the ethanol madness.

    Yes but the ethanol plant employees in Iowa would not, so coming out against ethanol is a presidential ambition killer.

    Just like we have HFCS instead of sugar in our soft drinks because an influential family, the Fanjuls:

    Political influence in the United States

    Alfy Fanjul has never become a U.S. citizen. He remains a permanent U.S. resident who maintains Spanish citizenship.[16] Alfonso Fanjul served as co-chairman of Bill Clinton’s Florida campaign in 1992 and is a major contributor and fundraiser for the Democratic Party. His brother Pepe, who is a U.S. citizen, contributes to the Republicans.[21]

    The Fanjul family was explicitly thanked by Marco Rubio for their support in his autobiographical memoir An American Son: A Memoir.[22]
    Popular culture

    The Fanjul brothers were parodied in Carl Hiaasen’s 1993 novel Strip Tease, which features a pair of Cuban brothers who own a large sugar conglomerate, that receives enormous profits from the exploitation of immigrant labor and the subsidies regularly voted to them by the United States Congress.[23]

    The brothers also were a focus in the Jamie Johnson documentary The One Percent (2006), which showcases the corrupt use of cane workers and especially “imported” labor. The U.S. Dept. of Labor’s “List of Goods Produced by Child or Forced Labor”[24] report lists sugarcane from the Dominican Republic as having child and forced labor. This is a small source of raw sugar that is imported from 40 different companies to be refined then sold by Domino Foods, a marketing cooperative that among its products sells the Florida Crystals brand.

    The 2007 film, The Sugar Babies, is a documentary on the lives of Haitians and their children working in the Dominican Republic sugar cane fields and the Central La Romana factory run by the Fanjuls.[25]

    José “Pepe” Fanjul was part of 17 December 2012 BBC2 television edition of fly-on-the-wall documentary Inside Claridge’s. He was shown as a regular client of the Claridge’s Hotel, enjoying a luxury lifestyle in a £3,500 a night room, with a shooting in Scotland and trips across the world. He was said to have spent 300 nights at the hotel over the past decade.

    They make sugar artificially expensive so beverage makers substitute HFCS, which is much worse for the health of soda drinkers than regular sugar.

  113. Anonymous[427] • Disclaimer says:

    A natural gas burning cryoplant could liquefy the gas and it could be trucked or railroaded out.

    But if the use of CNG vehicles increased the infrastructure would be built.

  114. @J.Ross

    I don’t think that’s how electric cars operate.

  115. you don’t have to do anything with ‘trapped’ natural gas, as they call it.

    all you have to do is…have vehicles that operate on natural gas, instead of diesel.

    then the natural gas you produce while drilling for oil, instead becomes the fuel source for your vehicles.

    flaring problem solved.

    engineers are working on this now. HBD wise, we don’t have to guess what the engineers look like, since it’s the same guys doing 90% of the inventing and solving every time.

  116. anon[322] • Disclaimer says:

    The gross profit per gallon of gas is around 20 cents. It is a decent chunk of a station’s total profit.

    Overall, they are Amazon proof and profitable. It’s fragmented in the US and not that easy to invest in. Canadian company, Alimentation Couche (Circle K) is one of the better ways to invest. Warren Buffett bought a chain of truck stops Pilot(Flying J), so the economics are good.

    Actual profits are reported in financial filings of the public companies. People talking about 4 cents/gal? The net profit is going to be a lot lower and also include cost allocations. Some people want to lowball the profit.

    The point being that the C-store + Gas is a decent business and figures are publicly available. “Integrated Oil Majors” used to dominate this space, but oil companies seem to be less involved in retail these days.

  117. anon[322] • Disclaimer says:
    @Steve Sailer

    Yea. Midstream picked up a lot of slack in the economy. Maybe a trillion since 2008. The drillers have spent huge amounts, but not been very profitable. Refiners seem to be doing pretty good.

    The knock on effects have been enormous. We are North American petroleum independent now and have pretty much eliminated petroleum balance of payment problems. US producers of chemicals and fertilizers have permanent have feedstock price advantages.

    The only new industries that have been created over the last 3 decades has been computer/tech and tight oil.

  118. @Buffalo Joe

    I used to buy gas on the res. But too often the cheap gas was adulterated and resulted in engine problems. The savings just wasn’t worth playing Russian Roulette with my car.

  119. Art Deco says:
    @Steve Sailer

    The rate at which goods and services were produced declined by about 5% over a nine month period in 2008 and 2009. While that’s an abnormally severe business recession, it’s a fraction of the 30% implosion the country suffered during the period running from the summer of 1929 to the spring of 1933. Since extractive industries account for < 3% of value-added in the economy, it's rather rum to suggest they 'saved' it. The government uses a coarse taxonomy of industries which sorts production into 13 categories. Between the 2q of 2009 and the 4th q of 2011, real value added increased in 10 sectors, was stationary in one (general government), and declined in two (construction and…mining).

    • Replies: @Prodigal son
    , @anon
  120. @Art Deco

    The energy sector saved the economy by reducing the cost of natural gas and oil. Consumers saved Billions and benefited from lower gasoline costs, lower electricity costs, which reduced the costs of all products made in the United States.

    Natural gas prices fell 80% and prices of oil are 50% lower thanks to fracking. This is why the energy sector helped the economy. The additional jobs created are not as significant as the impact of lower prices.

  121. @Prodigal son

    You mean the Chevy Volt?

    Nuclear is more expensive because of the layers of regulation and redundancy. Who knows what level is really necessary and how much is gov’t justifying its existence? When I worked at a gov’t environmental lab, I could say with confidence that 90% of what we did could’ve been erased with no diminution of scrutiny of those we regulated.

  122. Mr. Grey says:

    I live in California, and I noticed this last Christmas when I was in Tennessee.

  123. anon[322] • Disclaimer says:
    @Art Deco

    Max and min oil prices/year:

    2008. $91.48 $107.05
    2009 $53.48 $62.90
    2010 $71.21 $82.54

    There is more to it than simple value added/year. Revenue is heavily dependent on price, and leading up to the decline, record oil pricing had a chilling effect, and lower prices subsequently have been a major tailwind.

    Not to mention the impact of royalties which amount to 1/8 of the price and are just appears in individual and tax income.

    In addition, tight oil is very capital intensive, increasing the stimulative effect. Oil and gas are inputs to refining and chemical manufacturing, and create higher paying jobs unlikely to be filled with illegals.

    • Replies: @Art Deco
    , @Anonymous
  124. Art Deco says:

    The BEA publishes Input-Output tables for each year. Purchases of the issue of the mining sector for use as an intermediate good summed to $1.04 tn in 2008. All purchases for use as intermediate goods summed to $29 tn. As for final demand, gasoline in 2008 accounted for 4% of all personal consumption expenditures.

  125. @stillCARealist

    No he’s talking about the pure electric Bolt, the Volt is no longer produced, but its tech will probably be used in another platform

    Cheap Natural gas is killing Coal and Nuclear in the US and other countries, I expect PV to kill Natural Gas in the long run

    And EVs will kill the ICE. Batteries will only get better and cheaper, once you know this, and take a test drive of a Model S or 3, no other conclusion is credible

  126. Wally says:

    It’s not that difficult to understand, it’s Big Government, not “Big Oil”.

    “Southern California motorists are paying nearly a dollar per gallon in gas taxes
    ‘Mystery surcharge’ and gas taxes boost California gasoline prices by about $1.26 per gallon
    Where’s the money going? That mystery surcharge adds up to $11 million a day, or $4 billion a year.

    At the gas tank integrated oil companies make about 7 cents per gallon. Meanwhile, the government extracts more than 48 cents, on average, per gallon. That’s right: Uncle Sam takes nearly seven times more out of drivers’ wallets via taxation than “Big Oil.”

    California’s Soaring Gas Taxes Aren’t Even Going to the Roads

  127. Anonymous[427] • Disclaimer says:

    Given the other costs of living in desirable areas of California, the high gas taxes are probably a minor concern for Californicators, except those in rural or less prosperous areas outside the good weather area, and they don’t have enough political pull to do much about it do they?

    Jefferson State would be a really good idea.

    In the meantime, put a propane or CNG tank in your pickup.

    • Replies: @Anonymous
  128. Anonymous[268] • Disclaimer says:
    @Achmed E. Newman

    Achmed 21/23:

    California produces ~0.5 million bopd, but needs ~2 million bopd for consumption.

    Refining capacity is decent. However crude production is deficient. This is made up by significant imports of crude. (Some products are also imported.)

    California has a long history as a major oil producer and still is. Just not adequate to supply itself. Production is ~flat, with a very slow decline. Drilling is still active. Just not quite enough to grow production.

    California has somewhat challenging geology because of the faulting. So companies are hesitant to investigate shale horizontal fracked wells. In addition, the political climate is adverse. However, some drilling remains…just not the revolution the rest of the country’s oil producing regions are seeing.

    Imports face Brent/World pricing, which is higher than WTI Cushing of even WTI Gulf Coast pricing. It’s even worse than Brent in that shipments primarily come from the Middle East and the transit is long. However, it does have a deepwater port (can offload VLCCs).

    Scroll down for petroleum consumption:

    California crude production:

  129. Anonymous[268] • Disclaimer says:

    Forbes 83/84: A lot of AK crude is actually consumed in state now. Production is down to 0.5 MM bopd in AK also. Some of it is consumed in West Coast refineries (mostly Washington State). However, AK crude is still insufficient to supply West Coast demand.

    Large amounts of crude must be imported. This means the price, being set by the marginal barrel purchased is driven by Brent/Dubai plus shipping cost.

    There’s also about 0.2-0.3 MM bopd of railed Bakken crude that goes into Washington State. However, the PADD 5 (West Coast) demand still requires very significant imports from overseas.

    Here is the source of PADD 5 imports:

    You can see that about 1.3 MM bopd of imports are needed.

    PADD 5 crude exports are minimal in recent years. So net imports are close to imports. See here for exports:

    As far as crude products (gasoline, NGLs, etc.), PADD 5 is actually a small net exporter: ~0.5 MM bopd export, 0.3 MM bopd import. So, belay my last where I said they were a products importer. They’re pretty close to breakeven and have slight exports as a merchant refiner. [Research it on the EIA site if you want. Pages are easily Googled.]

    However, they are still significantly lacking in crude. More than half of refinery runs for PADD 5 overall, comes from

  130. Anonymous[268] • Disclaimer says:
    @Rex Little

    Up periscope. Play any bridge lately?

    • Replies: @Rex Little
  131. Anonymous[268] • Disclaimer says:

    Anon 124:

    Not sure what price index you are using. But in any case, you are not listing max/min prices whether WTI or Brent. Your numbers make no sense. What is your source?

    WTI spot in 2008 reached into the 140s in JUL and then the 30s in DEC.

    Brent prices similar (small offset). Prompt month prices also very similar to spot (small offsets.)

  132. Anonymous[268] • Disclaimer says:

    129: Like any regressive tax, it impacts those lower on the income scale more. People making six figures could care less. It’s like paying Starbucks prices for a cup of coffee. People scraping by, it makes much more of an impact on their budget.

  133. @Anonymous

    Play any bridge lately?

    I play four times a week here in Mesa AZ plus a couple of times online. Have I run into you on BBO?

  134. Clyde says:
    @Prodigal son

    I have a nephew with a Tesla and and a Chevy Volt. I can’t say if all Volts had this problem but this one had very bad water condensation inside. We visited this millennial and he has a charger in his house that can charge both vehicles.

  135. @stillCARealist

    The Chevy Bolt is an electric subcompact car. The Chevy Volt is a hydrid compact car, can run on gasoline.

    My brother had a Volt and now drives a Bolt. The Volt was a better car, but Chevy discontinued the Volt.

    The Honda Civic is a better car than the Bolt and costs $18,000 less. GM loses $9,000 on every Bolt they sell, and they sell for $38,000. While Honda earns a profit selling the Civic for $19,000

  136. @Desiderius

    Sorry about that. Try this:

    • Replies: @Desiderius
  137. @PV van der Byl

    #1 favorite movie all-time. Single-handedly dispelled Carter’s malaise.

    Harold Ramis was one of those patriotic Jews you were looking for, AnotherDad.

Current Commenter

Leave a Reply - Comments are moderated by iSteve, at whim.

 Remember My InformationWhy?
 Email Replies to my Comment
Submitted comments become the property of The Unz Review and may be republished elsewhere at the sole discretion of the latter
Subscribe to This Comment Thread via RSS Subscribe to All Steve Sailer Comments via RSS
Which superpower is more threatened by its “extractive elites”?
The “war hero” candidate buried information about POWs left behind in Vietnam.
What Was John McCain's True Wartime Record in Vietnam?
Are elite university admissions based on meritocracy and diversity as claimed?