While the new California legislative session won’t start until January, legislators met very briefly in response to Gov. Newsom’s call to convene a special session to limit oil company profits. One reporter noted that the Assembly’s entire discussion of the special session lasted … three minutes.
The “special session” looks like it’s going to get subsumed into the regular session starting in January. Which means that Newsom’s entire call is, for now, all hat and no cattle.
But he has at least put out the proposed language of his proposal. He’s asking the legislature to fill in blanks, such as: “the maximum gross gasoline refining margin shall be ___ cents per gallon.” He’s also asking the legislature to give him (through his appointees to the California Energy Commission) significantly more power to regulate the already-heavily-regulated oil refinery industry.
This is economic insanity.
It’s California’s own fault that our gas prices are so out of whack with the rest of the country. As Valero explained recently, “California is the most expensive operating environment in the country and a very hostile regulatory environment for refining. California policymakers have knowingly adopted policies with the expressed intent of eliminating the refinery sector.”
In other words, California has created its own scarcity and is shocked when prices don’t follow the national ups-and-downs. Rather than encourage competition, California is (1) increasing regulation/cost and (2) capping profits. Oh, and the new “commission” can reduce that profit at any time.
Even if this made economic sense (it doesn’t), it still wouldn’t be government’s role to dictate profitability. This is governmental plunder. And, as Frederic Bastiat explained, “[t] is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder.”
Avast ye oil companies, thar be the Dread Pirate Newsom!
But seriously, elections have consequences. If you voted for someone vacuous enough to support Newsom’s approach, then you’ve earned the pain at the pump. The rest of us are collateral damage to this idiocracy.