Cantwell: New Report Raises Questions of Artificial Shortages While Gas Prices Skyrocketed
Data indicates that ‘closed’ refineries may have continued production - while Northwest drivers paid more than $4 per gallon
WASHINGTON, D.C. – U.S. Senator Maria Cantwell (D-WA) said a new report released today raises serious questions about whether artificial shortages were occurring in May and October while West Coast gas prices skyrocketed above $4 per gallon.
A new McCullough Research report released today at a California state senate hearing indicates that two West Coast oil refineries may have been producing oil last May despite public reports that they were shut down for maintenance. McCullough’s report also indicates that West Coast oil inventories were at historical levels in October – and were rising in May – at the same time as gas price spikes.
Senator Cantwell plans to request the Department of Justice conduct a refinery-by-refinery probe into the reasons behind this year’s gas price spikes.
An extensive analysis of emissions monitoring data by McCullough found that the Chevron refinery in Richmond, Calif., emitted byproducts of petroleum production throughout May. Yet public reports claim the refinery shut down production from May 12 to May 26. An analysis of similar data shows that the Royal Dutch Shell refinery in Martinez, Calif., emitted these same byproducts for more than a week before it supposedly resumed petroleum production.
“Washingtonians were hit hard this year by gas price spikes supposedly caused by supply disruptions,” Cantwell said. “This report indicates that the gas price spike may have been caused by more than just supply and demand. We need a true cop-on-the-beat policing the vital oil market. That’s why I plan on asking the Department of Justice to investigate on a refinery-by-refinery basis and get the answers consumers deserve.”
According to the McCullough report, the October price spike added up to a 66 cent-per-gallon windfall profit for oil companies – or about $25 million a day. The difference between what drivers actually paid and what they should have paid exceeded $1 billion. The new report also showed that gasoline inventories actually increased in California, at a time when the Chevron refinery was closed.
Cantwell has long fought to protect consumers from artificially high gasoline and diesel prices. Earlier in the year, Cantwell urged the Federal Trade Commission (FTC) to use its regulatory authority to aggressively investigate why Washington state’s gas prices increased to near record highs during the month of May, even as the world price of oil and national average gas prices dropped significantly.
Cantwell wrote the law making manipulation of wholesale oil markets illegal. Her legislation, which became law in 2007, empowers the FTC to levy civil penalties of up to $1 million per day. She has been an advocate for reining in excessive oil speculation, calling on federal regulators to implement overdue rules in the energy futures markets. She has long fought to prevent market manipulation and excessive speculation from artificially driving up the price of oil and prices faced by consumers at the pump.
During the 2010 financial market reform debate, Cantwell pushed for tough and effective rules and the elimination of loopholes to prevent speculators from manipulating the oil market. She fought to ensure that the bill required the Commodity Futures Trading Commission (CFTC) to enact position limits to diminish, eliminate or prevent excessive speculation that disrupts the market, and she continues to push the CFTC to enact these new rules. Mandatory speculative position limits and strong anti-manipulation tools were main contributors to Cantwell’s eventual support of the Wall Street reform law.
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