With perhaps ten thousand lives lost and a nuclear reactor emergency growing daily in Japan, one industry is poised to reap huge profits from tragedy. The stocks of oil refiners charged upward today on bets that Japan would soon have to import a lot more heating oil and gasoline because of refinery fires and quake/tsunami damage.
It’s notable that the biggest beneficiary was refining company Valero, whose stock rose 6% on Monday. Valero, refiners are all in the U.S West Coast region, and it is most able to get gasoline, diesel and heating oil onto tankers headed to Asia.
Valero, you may recall, was the chief funder of a June 2010 ballot initiative, Proposition 23, intended to kill California’s push for green energy. It lost, but had it won Valero would have profited from greater continued dependence on fossil fuels in the state.
So now Japan stands poised to hand Valero and other West Coast refiners the profit they couldn’t get from Proposition 23. Will Valero, which like other California refiners is operating well below its usable capacity, step up production to supply Japan and keep pump prices from soaring? Or will it squeeze out every penny of profit, both from West Coast drivers and Japanese quake victims? Considering Valero’s Proposition 23 campaign, I’d hate to bet on their good citizenship.
And finally, will the White House step in to make the refining industry act like a responsible corporate citizen?