Why Chevron Is Fleeing California – WSJ

The list of anti-Chevron state policies include a low-carbon fuel standard, cap-and-trade fees, drilling restrictions and a penalty on excessive refinery margins. To add injury to insult, the Richmond City Council has put on the November ballot a $1 a barrel tax on Chevron s refinery, one of the largest in the state.

The war on the industry has caused production to fall by more than half in the last decade and several refineries have shut down. Gasoline prices have surged $1.16 a gallon above the national average. Whenever a refinery has problems, prices rise even more owing to lack of supply sometimes above $6 a gallon.

Enter Mr. Newsom s energy commission, which is charged with investigating the causes of California s high gas prices. A commission staff report this week failed to find wrongdoing but nonetheless floats state control of the refining industry.

One idea is to purchase and own refineries in the State to manage the supply and price of gasoline. At least the commission concedes there are significant legal issues to address and there are complex industrial processes that the State has no experience in managing. That s for sure.

Sacramento can t currently provide basic public services such as reliable power. How would it run an industry it wants to shut down? The report wonders too: As demand for fossil fuel declines, will the presence of State-owned refineries inhibit an orderly phase out of refinery capacity?

via www.wsj.com