RESOLVING THE CONTRADICTION BETWEEN GAS PRICES AND REFINERY CLOSURES

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, JULY 4, 2025 OR THEREAFTER

BY THOMAS D. ELIAS
“RESOLVING THE CONTRADICTION BETWEEN GAS PRICES AND REFINERY CLOSURES”

 

It’s an apparent contradiction: on one hand, state regulators reported in May that California gasoline pump prices since 2015 average 41 cents per gallon higher than in other states, after accounting for taxes, fees and environmental costs.

 

On the other hand, two of California’s large refineries now plan to close soon, one by the end of this year and the other within the first half of 2026. They say they can’t afford to stay open, even though together they make 17 percent of the state’s gasoline.

 

How can gasoline refiners be making the highest profits in the lower 48 states, but still not enough to keep their plants open?

 

To understand this, it’s important to know the average net profit for oil companies varies, with the biggest refiners – the ones supplying branded stations like Chevron and Shell – making more money because of their retail marketing networks, while smaller refiners often supply lower-priced independent brands that pay (and charge) less.

 

State regulation of gas refining is a pretty new thing, dating from a 2023 law signed by Gov. Gavin Newsom that allows a wing of the state Energy Commission to order that refiners keep higher stocks on hand than previously at times when they’ve recently been caught at price gouging. One such time came in February 2022, when pump prices jumped more than $2.50 per gallon within two days of an outage at one refinery near Los Angeles.

 

When Newsom signed the law allowing this kind of regulation, he accused oil companies of “gouging” and “screwing Californians.”

 

In fact, the state reported this spring that per-gallon excess profits by the oil companies peaked at $2.36 during a fall 2022 price spike.

 

There have been no similar-sized spikes since the new law took effect.

 

So how to explain the scheduled closures of a Phillips 66 refinery near Los Angeles and a Valero plant in Benicia?

 

Even with these refineries charging prices and posting profits consistently well above national averages – but without sudden windfall profits due to occasional outages for maintenance and mechanical problems – that’s what they plan.

 

Says one expert, “The two refineries are closing because they are old and expensive to run and the state’s planned transition to electric vehicles promised a drop in demand.”

 

Also, these refineries serve more unbranded gas stations than the biggest-in-California Marathon refinery near Los Angeles and the two big Chevron facilities at Richmond and El Segundo. So they make less profit than their competitors that supply large networks of branded stations. Maybe they needed to gouge customers once in awhile just to stay open.

 

Pollution also plays a role. Valero Benicia last October was forced to pay an $82 million fine. The state Air Resources Board and the Bay Area Air Quality Management District (BAAQMD) imposed the penalty for violations involving unreported emissions of harmful organic compounds, including benzene. An investigation showed the violations had been occurring for about 20 years.

 

To fix up both the refineries aiming to shut down would cost in the hundreds of millions of dollars, an amount they believed they were unlikely to make up soon in the new no-price-spikes era. This situation is not unique: Several refineries in Texas are also closing in response to competition from new foreign “super refineries,” mostly in the Middle East.

 

The closing California plants will likely replace their production with gasoline shipped in from those and other foreign sources, including Indonesia. Chances are, there will be no major shortages, but there may be price increases, which could provide drivers with new reasons to buy EVs.

 

Of course, now that President Trump has eliminated federal EV price incentives and tax refunds, one or both of the outfits that have resolved to shut down may reconsider, as their potential economic futures look better than they did a few months ago.

 

Meanwhile, the remaining large refineries, which may soon be producing as much as 98 percent of California fuel, have no reason to stage a similar shutdown, which promises a long period of stability in this industry after the inevitable adjustment period that would accompany the two scheduled closures.

 

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    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

TRUMP REVITALIZES A NEWSOM PRESIDENTIAL RUN

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, JULY 1, 2025, OR THEREAFTER

BY THOMAS D. ELIAS
“TRUMP REVITALIZES A NEWSOM PRESIDENTIAL RUN”

 

If President Trump wanted to set up Gov. Gavin Newsom for a strong 2028  run against fellow Democrats and then Trump's chosen Republican successor, he could scarcely have done better than in the last month.

 

First came the president's threat to withhold virtually all federal grant money from California, affecting everything from medical research to sewer building and more.

 

That spurred Newsom to one of his most creative and energetic responses in months, even though his idea of withholding California’s federal taxes won’t work. At least it allowed the governor to say no one can attack California without learning how important it is to the rest of America.

 

Days later, Trump made the possibly unconstitutional move of calling out the California National Guard over Newsom’s objection, supposedly to quell rioting over immigration and deportation raids in Southern California. Then he sent 700 U.S. Marines into Los Angeles, saying they would protect federal personnel and facilities from rioters. All along, local police said they had matters well in hand. But Trump insists he saved the city from “incinerating.”

 

Newsom followed with a national speech denouncing authoritarian behavior and government overreach. Said Newsom, “This brazen abuse of power...inflamed a combustible situation, putting at risk our people, our officers and the National Guard.”

 

Only after that did Homeland Security Secretary Kristi Noem inadvertently reveal the purely political thought behind Trump’s moves: After her agents tackled and handcuffed Democratic U.S. Sen. Alex Padilla when he tried to question her, she got off perhaps the key statement in a week of dramatic talk: “We are staying here to liberate the city from the socialist and burdensome government that this governor and this mayor have placed on this country and this city.”

 

Which means a president who pardoned hundreds of convicted January 6 insurrectionists now wants to dictate who Californians elect to lead them.

 

This is pure Trumpian overreach. It validated what Newsom said days earlier in his nationally broadcast speech: “This is about all of us,” he warned. “California may be first, but it clearly will not end here. Democracy is under assault before our eyes.”

 

If Newsom sought a campaign theme, Trump provided it. The governor can now say he stands for America remaining a free country, with no dictator.

 

That speech and other resistance was the reason many protesters at mid-June “No Kings” rallies around California carried signs saying “Resist Trump: Thank you Gov. Newsom.”

 

Trump had never stinted in his enmity for California. But now Newsom’s gloves are also off, and he is active in lawsuits galore against Trump and his tactics. That’s one reason Trump suggested, “I would not hesitate to arrest him.” Newsom dared him to, saying “Come and get me. He knows where I am.”

 

Trump also observed that Newsom loves the publicity all this gives him. That appears accurate.

 

How did Newsom win his newfound popularity as an anti-Trump champion? He first projected strength by refusing to take Trump’s bait and get himself arrested in the act of interfering with immigration officers.

 

“Don’t give him a spectacle,” Newsom urged. “Never use violence.”

 

Just as unique was his response to Trump’s unprecedented threat to cut off federal funds for California. Newsom essentially said “If you take our money, we may cut off yours.”

  

He could say that because California is by far the biggest taxpaying state in the Union, also the biggest “donor” state. This state in 2022, the last year for which full figures are available, paid more than $692 billion in federal taxes, $83.1 billion more than it got back in federal funds. That’s nearly three times the “donation” of the next biggest “donor” state.

 

What if California withheld its billions, as Newsom threatened, and raised the national debt almost $1 trillion? It won’t happen.

 

This would be almost impossible to pull off because typical federal tax payments go straight to the Internal Revenue Service, with no state involvement.

 

Keeping those payments from the IRS would need cooperation from millions of individual taxpayers, thousands of tax preparers and many, many corporate officials.

 

That would require a huge campaign, which will not occur. Still, reminding Trump how important California really is can’t be all bad.

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    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

WE’RE NO. 4! WE’RE NO. 4! WHAT DOES THIS RANKING MEAN?

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, JUNE 27, 2025, OR THEREAFTER

BY THOMAS D. ELIAS
“WE’RE NO. 4! WE’RE NO. 4! WHAT DOES THIS RANKING MEAN?”

 

There were large headlines around California (but not in many Republican-led “red” states) in late spring, when the International Monetary Fund and the U.S. Bureau of Economic Analysis simultaneously found that this state’s economy had surpassed Japan’s to become the world’s fourth-largest, with a gross state product exceeding $4.1 trillion, about $800 billion better than Japan.

 

This had different meanings for different folks. For Gov. Gavin Newsom, it meant new ammunition for his putative 2028 presidential campaign, where he has been challenged lately by Minnesota Gov. Tim Walz and Illinois Gov. J.B. Pritzker. Pritzker has taken a page from Newsom’s 2024 manual, when the California governor blasted his Democratic Party mates for being too passive, before lapsing into months of his own political passivity after ex-President Biden handed the party’s 2024 nomination to Kamala Harris and not him.

 

But Newsom is going again on his effort to extend his political life beyond the early 2027 term-out he faces after eight years in office. His first new move was to become a named plaintiff on California’s lawsuit challenging President Trump’s unilaterally imposed tariffs, which vary greatly by country.

 

Now two big economic arbiters have given him some more juice. For sure, Pritzker cannot claim Illinois is even among the world’s top ten economies, let alone No. 4, behind only the rest of the USA, China and Germany.

 

It’s true that the IMF speculates India’s economy might ramp up enough to pass California sometime late next year, but that seems unlikely when California had the world’s highest economic growth rate last year at 6 percent, well above India’s.

 

It all means that Californians are not only more productive than residents of the United Kingdom or any other American state, but also that no matter what opposing politicians might say, Newsom has not mismanaged the economy. Yes, some businesses moved headquarters out of California, like Chevron, Toyota USA and Tesla, but other companies arose to eclipse the effect of those departures. One example might be Open AI, a leader in artificial intelligence and maker of ChatGPT.

 

Bragged Newsom, “California isn’t just keeping pace with the world – we’re setting the pace. Our economy is thriving because we invest in people, prioritize sustainability and believe in the power of innovation.”

 

Not even California’s relatively high sales and income taxes could stymie the state’s economic growth, as California seems to spawn one pioneering new industry after another.

 

But Newsom warned both in his lawsuit and otherwise that Trump’s tariffs could throw a monkey wrench into what California achieves.

 

“While we celebrate this success,” he said, “we recognize that our progress is threatened by the reckless tariff policies of the current federal administration.”

 

In short, California’s more than $675 billion in two-way trade with other countries last year could be brought up very short this year, allowing countries like India, France and Italy to surpass this state in a seesaw race for high ranking, prestige and bragging rights.

 

For the state’s high economic ranking, which far surpasses other states’ performances along with those of prosperous foreign provinces like Canada’s Ontario and the UK’s Wales and Scotland, is not static or guaranteed. It depends on trade and cooperation with other nations, states and provinces.

 

And it depends on California’s own responses to its admitted problems, things like high taxes, a sometimes questionable business climate, earthquakes, wildfires, expensive insurance and much more.

 

But those things can bring advantages, too. An example is residential construction, which will be a huge element in California’s gross state product once reconstruction from last January’s Los Angeles County firestorms ramps up.

 

All of which means the new No. 4 ranking confers little upon California except very ephemeral bragging rights, which can disappear quickly if economic conditions change a lot, something Trump appears determined to make happen.

 

So Newsom and anyone backing him would be wise not to become too smug – for today’s super-high rating is not necessarily a promise of things to come.

 

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Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

WILL CONSUMERS PAY UTILITY’S BIG FIRE FINE?

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, JUNE 24, 2025 OR THEREAFTER

BY THOMAS D. ELIAS
“WILL CONSUMERS PAY UTILITY’S BIG FIRE FINE?”

 

When California’s second-largest electric utility settled a U.S. Forest Service claim for starting a huge fire that covered 114,577 acres in 2020, officials of that power company could not or would not say whether they will try to get their customers to pay the freight.

 

At stake here is $82.5 million which Southern California Edison Co. agreed to pay the Forest Service, which is supposed to use the money to restore or replace more than 100 buildings, many trails and at least 178 vehicles, among other items destroyed in the Bobcat Fire that started Sept. 6, 2020 in the Angeles National Forest northeast of Los Angeles.

 

But the answer to the question of whether consumers will be dunned is already known, even if Edison officials had no immediate response: Of course, the customers will pay. The problem is that the payment, probably averaging more than $5 for each of Edison’s 15 million customers, will never officially be called a reimbursement for the settlement, even though that’s what it will be.

 

This is common practice with the California Public Utilities Commission, which has a long record of restoring fines it charges big utilities like Edison, Pacific Gas & Electric and San Diego Gas & Electric for their many misdeeds via their next routine rate increase request.

 

Edison, like its fellow privately owned utilities, almost always has a rate increase case going before the CPUC. One is happening right now.

 

This rate case sees Edison asking a 23 percent increase in its rates over the years 2026 to 2028, with a decision in that case possible as early as this summer. If it got the full requested increase, customers’ monthly bills would rise by about $17.49 in the first year, adding to California’s status as having the second-highest electricity bills in the USA, trailing only isolated Hawaii.

 

Edison says it needs the extra money for wildfire mitigation, which was found deficient when its equipment helped start the Bobcat fire. Edison equipment also is suspected to have caused the far more destructive Eaton fire that destroyed much of Altadena last January, with executives not even denying those accusations.

 

The new Donald Trump-appointed U.S. attorney for the Los Angeles area, former Republican state Assemblyman Bill Essayli of Corona, said the “record settlement against…Edison provides meaningful compensation to taxpayers for the extensive costs of fighting the Bobcat fire and for the widespread damage to public lands.”

 

It may, but the effect on Edison, which continued handing out executive bonuses over the last several years while its equipment helped cause many fires, will be nil.

 

While Edison won’t get the full amount its rate case requests, history suggests it will get most. The more than $80 million in this settlement will be dwarfed by the rate increase and consumers will be lucky if Edison’s bosses so much as blink when they pay up on the settlement.

 

It's all part of the PUC’s decades-long “kabuki dance” with the companies it regulates, where the firms ask for significantly higher rate increases than they know they will get, realizing all along they will get more than they really need and knowing that all fines will essentially be repaid by consumers via the new and higher prices. (In Japanese kabuki dances, elaborate plots often play out, with everyone knowing all along how they will turn out, exactly what happens in rate cases before the CPUC.)

 

So, no, don’t feel the slightest bit sorry for Edison or PG&E the next time you hear they are being fined many millions of dollars for their equipment failures and poor vegetation clearance, even as customers pay them huge sums to maintain and improve that very equipment and vegetation control.

 

Instead, understand this is what happened when utility customers were assessed $13 billion to create the state Wildfire Fund, used to pay for damages caused by utility equipment in fires since the fund was created in 2019 after PG&E suffered a fire-related bankruptcy.

 

Customers will keep paying so long as California governors appoint PUC members willing to let the big utilities off the hook for their misdeeds or negligence. Sadly, there is no end in sight for this.

 

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    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

IS NEWSOM’S PUTATIVE CAMPAIGN IN A BUMBLING PHASE?

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, JUNE 20, 2025, OR THEREAFTER

BY THOMAS D. ELIAS
“IS NEWSOM’S PUTATIVE CAMPAIGN IN A BUMBLING PHASE?”

 

As California Gov. Gavin Newsom pursues the early phases of what looks like a 2028 presidential campaign, he’s running afoul of two realities about his present office:

 

One is that no California governor can hide for long from any issue affecting the state. It’s too big for that and governors – unlike U.S. senators – don’t get to pick and choose which issues they want to deal with. Everything eventually lands on the governor’s plate, from welfare to water, from budgets to the survival of bees.

 

The other unchanging reality is that Eastern pundits love analyzing the performance of California governors, since the sheer size of this state automatically propels whoever is governor into the status of a presidential possibility. So even though Newsom is mostly staying home, he gets as much national attention as Minnesota Gov. Tim Walz and Illinois Gov. JB Pritzker, who are campaigning widely.

 

Newsom can’t escape these realities of his office any more than Jerry Brown or Pete Wilson could. No matter what he does in the waning months of his second term in American’s most prominent state job, it will be analyzed in terms of his presidential chances.

 

That put Newsom’s every move during the January Los Angeles County firestorms under the microscope. So too his podcast and his budget manipulations.

 

Right now, all this does not look great for him. For one thing, the 2024 Joe Biden surrogate who loved to roast candidate Donald Trump has toned down his criticism in the face of threats to the funding of everything in this state from the Coastal Commission to the University of California. Why the Coastal Commission? Trump’s golf course on Southern California’s Palos Verdes Peninsula has had disputes with the Coastal Commission, from beach access to placement of a 70-foot flagpole that exceeded height limits.

 

Few California features are valued more by state residents than public access to beaches fronting on private property. While Newsom likes to say he stands up for California values, he’s had little to say about that one as Trump’s administration threatens to hold up wildfire recovery funds so long as the Coastal Commission exists.

 

Another so-called “California value” is giving Medi-Cal health coverage to undocumented immigrants. Newsom bragged for the last couple of years that California was the first state to provide government health care to all low-income people, regardless of immigration status. But the start of this year’s budget process revealed the program (the state’s version of Medicaid) was $6.2 billion (now $12 billion) in the red because of high drug costs and unexpectedly high Medi-Cal enrollments, among other factors.

 

So Newsom was forced to cut back one of his pride-and-joy programs considerably and national news outlets covered the process closely. At the same time, the governor had to admit he was spending more than $8 billion tax dollars a year to assist illegal immigrants. Other states like New York, Illinois and Oregon also provide some Medicaid coverage for the undocumented, but it’s generally reserved for the pregnant or the very young.

 

Then there’s Newsom’s podcast, where he has featured Trump loyalists like Joe Rogan and Steve Bannon. That’s also where he chose to reveal he opposes allowing transgender girls and women to compete in major sports. 

 

Some called this new stance a major move to the political center for Newsom, whose softer line toward Trump and his demands about some California institutions like the Coastal Commission – created via ballot initiative by a large majority of state voters – also was a move to the middle.

 

Here’s an open question: As Democrats’ anger simmers over some of Trump’s power-grabbing moves, how useful is a move toward the political center in a 2028 presidential campaign?

 

Candidates seeking that year’s nomination will surely need to create major contrasts with Trump and his potential successors like Vice President JD Vance rather than somehow blending in with them. So why make nice to the likes of Bannon, Rogan and conservative activist Charlie Kirk if Newsom wants to lead the opposition to them?

 

For sure, Newsom’s is a unique strategy, unless he’s merely bumbling along with hopes of becoming the de facto leader of the Trump opposition and the Democrats’ 2028 candidate.

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    Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net

NO LONGER JUST TRUMP WARRING ON CALIFORNIA

 

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, JUNE 17, 2025 OR THEREAFTER

BY THOMAS D. ELIAS
“NO LONGER JUST TRUMP WARRING ON CALIFORNIA”

 

No one can doubt anymore that President Trump has carried out a “war” on California in both his presidential terms, harming this state’s reputation, capabilities and privileges in ways no other president ever even tried.

 

Trump is not the only president who failed to win California’s 50-plus electoral votes, he’s merely the one who resented it most. So he’s held up promised disaster aid that was never previously doled out in a partisan manner, holding it hostage to longtime Republican policy priorities like requiring government IDs before voters can cast ballots. His national policies targeting immigrants also have more impact here than elsewhere because California is home to a far larger share of immigrants than its share of national population.

 

Now Trump’s campaign to reduce California’s stature by taking away some of its powers and influence has spread to Congress, narrowly controlled by his Republican Party. It’s a campaign occasionally joined by Democrats from Eastern and Midwestern states. When that happens, it can look like a continuation of the “anywhere but California” sentiment that has sometimes influenced Congress to make epically stupid decisions. One classic was placement for years of the National Earthquake Research Center in Buffalo, NY back in the 1970s. That supposed research center took a complete back seat to other seismic researchers at places like Caltech and Stanford, where earthquakes actually occur from time to time. Unlike Buffalo, where no quake topping a meager 3.8 on the Richter Scale has been felt in more than 40 years, a full share of 4s and 5s routinely occurs around California.

 

But few things rankle Republicans in red states like California’s Clean Air Act waiver, which has given it authority since 1970 to make its own smog laws and regulations. This has resulted in advances from the catalytic converter to hybrid gas/electric cars like the Toyota Prius, many Honda Civics and a wide variety of electric vehicles and plug-in hybrids that run about 30 to 40 miles on electric power before reverting to hybrid status.

 

No doubt, California’s rules have made cars cost more. That’s been generally accepted here under the notion that clean air costs something in a state whose biggest urban centers sit in coastal basins where prevailing winds often blow smog inland to areas where it can essentially pile up and thicken against mountains or substantial hills.

 

So far, no California governor has been ousted over the cost of living in more than 50 years of imposing anti-smog rules that make vehicles and some other goods more expensive. Polls show most Californians accept it’s the price of less emphysema, asthma and other smog-related diseases. The state’s powerful, appointive Air Resources Board now regulates not only vehicles, but industrial emissions and many commercial products, banning – for one example – most leaf blowers. Other state agencies here use similar priorities to promote things like solar and wind energy.

 

Meanwhile, other states including large automotive markets like Pennsylvania and New York accept a lot of California’s reasoning. Fully 17 states and the District of Columbia automatically adopt California smog rules some years after they take effect here.

 

Because carmakers want to construct and sell products for use everywhere, they often build to California standards, making vehicles more expensive everywhere and not just here, where clean cars are more often equated with healthy air.

 

This offends many red state politicians, since the automatic adopters mostly include Democratic-leaning states.

 

They appear most rankled by California’s plan to ban sales of new gasoline-only cars and trucks after 2035. “Every state would lose options – whether you live in California or not,” griped Wyoming’s Republican Sen. John Barrasso, whose state is a major oil pumper.

 

So the latest tactic in the war on California has been an attempt to repeal California’s unique smog-fighting authority. Trump tried this in his first term, but was held up by lawsuits. It’s doubtful that will work this time. Chances are, the state’s powers will at least be dented.

 

But it's doubtful Trump and other Republicans will be satisfied with just this, if they manage it. Which means the war on California will likely persist as long as Republicans control either Congress or the White House.

 

 

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 Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It" is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net