And on Friday, she reported having received $2,500 from San Ramon-based Chevron Corp. on June 2. That’s interesting in light of Hayashi’s opposition to fracking, and her attack upon rival Democrat Bob Wieckowski for not supporting a moratorium; Chevron semi-notoriously provided free pizza to residents near the site of a fracking explosion and fire this past February in Pennsylvania.
Federal subsidies would be reduced for oil companies that conduct spill-prone, deep-water drilling under a pair of bills introduced Monday by U.S. Sen. Dianne Feinstein, D-Calif., and U.S. Sen. Bill Nelson, D-Fla.
Feinstein’s Deepwater Drilling Royalty Relief Prohibition Act ends federal incentives for deep-sea oil and natural gas drilling, barring the Interior Department from waiving royalty payments that oil companies would otherwise pay when drilling in waters deeper than 400 meters.
“The BP spill illustrated just how devastating oil spills in deep water can be. But even though we understand the great risks and lack the technology to drill safely, unwise incentives that push oil companies to drill deeper and deeper remain in place,” Feinstein said in a news release.
“While oil companies continue to collect record profits, the government should not lose out on royalties that could fund clean energy deployment,” she said. “This is especially egregious at a time when federal budgets continue to contract — it’s time to end this practice and collect reasonable royalty payments from large oil companies for exploitation of public resources.”
Feinstein noted five of the largest oil companies — BP, Chevron, ConocoPhillips, ExxonMobil and Shell — made a combined $118 billion in profits in 2012, but the big three American oil companies (ExxonMobil, Chevron and ConocoPhillips) paid effective federal tax rates in 2011 of only 13 percent, 19 percent and 18 percent respectively.
Nelson’s Oil Spill Tax Fairness Act changes the tax code to deny tax deductions for oil spill-related expenses including legal, clean-up and other costs. Current law lets a company responsible for causing an oil spill is also responsible for the cost associated with cleaning that spill up, and Nelson’s bill would keep such a company from them turning around and writing those costs off as a tax deduction.
This bill was spurred by BP’s efforts to write off its clean-up expenses after the 2010 Deepwater Horizon explosion in the Gulf of Mexico created one of the largest oil spills in U.S. history. The legislation would apply to those responsible for an oil spill in U.S. territorial waters, but not to expenses caused by a natural disaster or an act of war.
“Given the record profits of the big oil companies, I don’t think they need any more help from taxpayers,” Nelson said in a news release.
Cue the feeding frenzy: A California State Senate seat just became available.
State Sen. Michael Rubio, D-Shafter, announced today he’s resigning effective immediately and has accepted a job as manager of California government affairs for San Ramon-based oil giant Chevron Corp.
“As many of you know, a little over a year ago I decided not to run for the United States Congress to meet the needs of my growing family,” Rubio said in a statement issued today. “My time serving since then has been a blessing, but it has also been a challenge. I have missed too many family dinners, bedtime stories and parent-teacher conferences. My wife and I have been blessed with two beautiful daughters, from whom we have learned a great deal.”
“Our youngest child, who has special needs, has given me great perspective as to life’s priorities and our eldest has reminded me that the most critical decisions are made at home and not under the Capitol dome,” he continued. “I have realized that my current professional path has left little opportunity to be home for those who are most important to me, which is why I am making a change.”
Rubio said his job with Chevron means working for a respected company “with deep roots in Kern County near the very oil fields where I was born. I am truly grateful for the rare opportunity to serve and the support I have been given. Thank you to everyone who made it possible. In my absence, Senate staff will remain in the district and Capitol offices to respond to the needs of residents of the 16th State Senate District – as they have always done.”
Rubio was elected to the 16th District in November 2010, representing all or portions of Fresno, Kern, Kings and Tulare Counties; at 35, he has been the state Senate’s youngest member. Earlier, he was a Kern County supervisor.
The West Coast’s U.S. Senators today asked the Justice Department to do a refinery-by-refinery investigation into why gas prices spiked to more than $4 a gallon during May and October.
The letter to U.S. Attorney General Eric Holder from senators Dianne Feinstein, D-Calif.; Barbara Boxer, D-Calif.; Ron Wyden, D-Ore.; Jeff Merkley, D-Ore.; Maria Cantwell, D-Wash.; and Patty Murray, D-Wash., asks that the Oil and Gas Price Fraud Working Group probe any possible market manipulation or false reporting.
“A McCullough Research report released Nov. 15th in conjunction with a California State Senate hearing on California gas prices revealed information that showed that the price spikes in May and October occurred while crude oil prices were declining, inventories were increasing, and possibly in conjunction with misleading market-making information,” they wrote.
The report they cited found that some West Coast oil refineries may have been producing oil last May despite public reports that they were shuttered for maintenance. For example, McCullough’s analysis found that the Chevron refinery in Richmond emitted byproducts of petroleum production throughout May – yet public reports claim the refinery shut down production from May 12 to May 26.
The report found 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.
“West Coast families and businesses are reeling from elevated and extremely volatile prices at the pump, impacting family budgets, inflation levels, and overall economic activity,” the senators wrote. “We believe this situation demands the attention from the Working Group established in April 2011 specifically to ‘monitor oil and gas markets for potential violations of criminal or civil laws to safeguard against unlawful consumer harm.’ ”
The working group includes representatives from the Department of Justice, the National Association of Attorneys General, the Commodity Futures Trading Commission, the Federal Trade Commission, the Department of the Treasury, the Federal Reserve Board, the Securities and Exchange Commission, as well as the Departments of Agriculture and Energy.
Feinstein in August had urged the Federal Trade Commission to launch an investigation of the sudden rise in case prices.
Read the full text of the senators’ letter, after the jump:
With gas prices soaring and news that the Chevron Richmond refinery’s crude oil unit won’t reopen until 2013, a state Senate committee will hold a hearing next month on the safety and reliability of California’s gasoline production system and its impacts on gas prices and the economy.
State Sen. Mark Leno, D-San Francisco, announced today he’ll convene the Senate Select Committee on Bay Area Transportation to explore the issue.
“The volatile spikes in gas prices and gas shortages in our state in recent weeks indicate serious problems with California refineries,” Leno said in a news release. “I am concerned that refineries have no incentive for keeping their operations safe and fully functional because their profits increase greatly following any type of disruption, whether it is the consequence of a potentially deadly explosion or failed piping. Meanwhile, consumers are paying the price for these refinery errors, not only at the pumps, but also in the risks posed to public health and safety.”
Leno said the hearing will focus on two main topics: system reliability for California’s refineries and its effect on the economy; and the state’s oversight process and role related to refinery worker safety. Topics may include monitoring health and safety at the state’s 15 oil refineries, state compliance and enforcement at refineries, West Coast gasoline prices and how they may be manipulated, refinery capacity and its relationship to gas prices and the economy, and the Chevron Richmond fire investigation.
“Chevron’s announcement late yesterday that its Richmond (crude oil) facility will be closed for the remainder of the year could further complicate matters for California,” he said. “Economists have estimated that a lengthy shutdown of that facility could slow the growth rate of the state’s economy by half a percentage point.”
This past weekend, Gov. Jerry Brown urged the California Air Resources Board to make an early switch to the state’s winter blend of gasoline to improve supply, and U.S. Sen. Dianne Feinstein, D-Calif., renewed her call for the Federal Trade Commission to investigate the soaring prices.
“Californians have too often been victimized as unscrupulous traders have created or taken advantage of supply disruptions to drive up energy prices,” Boxer wrote. “We cannot allow market manipulation by those who would seek to profit off the pain of our families at the pump.”
In the letter, Boxer pointed to published reports that cited energy traders saying the sudden rise in gas prices had “many of the hallmarks of a classic short squeeze.”
She acknowledged the maintenance issues facing California refineries beginning with the shutdown of Chevron’s Richmond crude oil unit in August due to a fire, the power outage at Exxon Mobil’s Torrance refinery, and the September shutdown of a Chevron pipeline that supplies crude from the Central Valley to the Bay Area. But noting a pattern of similar maintenance issues at West Coast refineries that led to price spikes earlier this year, Boxer wrote, “it is critical that we ensure that these shutdowns are not part of any broader effort to deliberately keep gasoline supplies tight—and prices high—at the expense of consumers.”
Watch ” This Week in Northern California” with host Belva Davis tonight and yours truly, where I will talk about Chevron’s stunning property tax appeal defeat in Contra Costa County.
The show airs at 7:30 p.m. on Fridays on KQED Public Television Channel 9 or you can watch a video archive online at http://www.kqed.org/tv/programs/thisweek/watch/
Here’s the blurb about tonight’s full line-up:
In the wake of the devastating shooting at Oikos University in Oakland, hundreds of community members attend an international prayer vigil. Meanwhile, Mayor Jean Quan calls for a renewed effort to curb gun violence and improve access to mental health services. Yahoo hands out pink slips to 2,000 employees, implementing the most significant layoff in the company’s history. New CEO Scott Thompson is expected to make further cuts this year as part of a monumental corporate restructuring. Oil giant Chevron is dealt an unexpected blow as the Contra Costa County Assessment Appeals Board slaps an additional estimated $26.7 million in taxes on its Richmond refinery, claiming the property was previously undervalued by the county. As baseball season kicks off the San Francisco Giants sign a record $127.5 million deal with All-Star pitcher Matt Cain and unveil plans for “Mission Rock,” a new waterfront development next to AT&T Park.
Mina Kim, KQED News
Lisa Vorderbrueggen, Contra Costa Times
Kara Swisher, All Things D
Rachel Gordon, San Francisco Chronicle