Chevron has failed to comply with a new California law that requires it to disclose how much money it is making from gasoline sales in the state, sparking a clash with state regulators over data that Gov. Gavin Newsom’s administration requested to enforce the first sanction of the nation. about excessive oil profits.
The law requires oil companies to report their monthly “gross refining margin,” that is, the difference between how much refiners paid for crude oil and how much the company sold as gasoline.
State lawmakers and regulators believe the data will give them a clearer picture of what has driven the dramatic increases in California’s gasoline prices, which are consistently the highest in the nation. The average price of a gallon of gasoline in California on Tuesday was $4.90, which is $1.44 higher than the national average, according to AAA.
The average price per gallon of gasoline in California reached an all-time high of $6.44 last summer. That prompted Newsom and state lawmakers to send cash rebates to most drivers and enact a law requiring oil companies to disclose more data about their prices. Newsom went on with it an invoice in the state Legislature this year to penalize oil companies for excessive profits, a proposal that is closely tied to data that Chevron has not reported.
Chevron representatives did not respond to a request for comment.
The deadline for oil companies to report January price data was March 2. Of the five big oil companies, which together provide 97% of the state’s gasoline, four have met that deadline: Marathon, PBF Energy, Phillips 66 and Valero, according to the California Energy Commission, which is compiling the data.
Chevron submitted only a “small fraction of the required data,” according to the commission, and opposed reporting anything else. The California company accounts for about 30% of all gasoline sold in the state, giving it the largest market share. The commission gave Chevron until the end of Tuesday to comply or face fines of up to $2,000 per day.
In a letter to the California Energy Commission, Chevron attorney Melissa Sladden asked the commission to delay enforcement of the law in favor of a lengthy rulemaking process to clarify what data must be reported. Sladden said the data required by the law “paints a false picture of actual refinery profit margins by significantly understating refinery costs.”
“Getting this term right is doubly important as it is currently being viewed by lawmakers as a measure to impose a tax on refineries,” Sladden wrote. “Legislating or regulating based on inaccurate data could have unintended consequences, such as decreased investment in gasoline production and higher long-term prices at the pump.”
The dispute reflects a larger conflict between the oil industry and Newsom, who is just entering his second term and is seen as a potential presidential candidate one day. Newsom has pushed aggressive climate policies, including a ban on drilling new oil wells near homes, schools and community sites.
But the oil industry is one of the most powerful lobbying groups in the state and donates a lot of money to the political campaigns of state legislators. The industry is backing a referendum to overturn a ban on drilling oil near sensitive sites. And Newsom’s proposal to penalize oil companies for making too much money has made little progress so far in the state Legislature, with several Democrats raising concerns during a public hearing last month.
Chevron’s failure to comply with the new pricing law could anger some lawmakers enough to sway their votes, said Jamie Court, president of Consumer Watchdog, an advocacy group that is pushing for a penalty on oil profits. .
“This is just a big (refiner) showing basically the state,” Court said. “I don’t think it bodes well when the legislation arrives.”
State Sen. Ben Allen (D-Santa Monica), who wrote the law requiring oil companies to release more data, said he still has some questions about Newsom’s proposed penalty for excessive oil company profits. But he said it was “disappointing” that Chevron hadn’t complied with the law he wrote.
“The fact that every other player in the industry was able to do it and didn’t, I just don’t know what’s going on with them,” Allen said. “We are going to hold them accountable.”
The energy commission has already rejected a request by the Western States Petroleum Assn., an oil industry lobby group, to delay enforcement of the law that requires more data on prices. The association is set to ask the commission to reconsider its decision on Tuesday.
Sophie Ellinghouse, the association’s vice president, general counsel and corporate secretary, wrote in a letter to the commission that requesting earnings figures will result in “burdensome, inaccurate and inconsistent” information.