The California Energy Commission demanded a response from the oil industry to their attempt to blame them for the price disaster, and gave them one day to do it.
Valero delivered.
Valero’s Response
Please consider Valero Response Letter to Chair Hochschild
Valero Synopsis
- Ironically, on the same day we received the Commission’s letter, a federal judge in a 103-page reasoned order, following review of thousands of pages of documents and hours of depositions and discovery, yet again threw out another case alleging price conspiracies by the fuel industry finding no basis for the allegations.
- As to why inventories may be low, we believe it is because post-COVID demand is growing and supply is limited. We have been endeavoring to keep our refineries at full production, and no one has produced more low carbon renewable fuel for the California market than Valero.
- With a very short supply market, inventories are pulled down to satisfy the demand. In fact, the Commission would not want to see refiners holding inventories in a tight market.
- California is the most expensive operating environment in the countryand a very hostile regulatory environment for refining.
- California policy makers have knowingly adopted policies with the expressed intent of eliminating the refinery sector. California requires refiners to pay very high carbon cap and trade fees and burdened gasoline with the cost of the low carbon fuel standards.
- California regulators have mandated a unique blend of gasoline that is not readily available outside of the West Coast.
- California is largely isolated from fuel markets of the central and eastern United States. California has imposed some the most aggressive, and thus expensive and limiting, environmental regulatory requirements in the world.
So, the reason the prices are so high in California, is California’s government.
