Billionaire activist Tom Steyer wants the Legislature to fix what he calls California’s dysfunctional gasoline market, with drivers here paying $1 more for a gallon of regular than other Americans.
And if the Legislature doesn’t act, Steyer may go to the voters with a ballot measure.
Steyer, a major Democratic donor and former hedge fund executive, on Wednesday urged legislators to pass a series of proposals designed to protect California consumers from sudden spikes in the price of gasoline. He is joining forces with Consumer Watchdog, an advocacy group that has pushed similar proposals for years.
Steyer and Consumer Watchdog want to force oil companies to disclose their refinery profit margins in California, give the state advanced warning of planned maintenance outages at their refineries and maintain a minimum level of gasoline supplies on hand, in case of emergencies. They also want the state to increase the penalties for oil companies caught trying to manipulate the market — although numerous state investigations have failed to do so. Steyer and Consumer Watchdog President Jamie Court, made their demands at a press conference Wednesday.
“If the Legislature and the courts will not act, I believe the citizens will have to take matters into their own hands,” Steyer said. “Either there is something nefarious going on here, or the structure of the market itself is unacceptable. In either case, we need to fix the problem.”
Steyer has tangled with oil companies before — and won. In 2010, he bankrolled opposition to a ballot initiative backed by Tesoro and Valero that would have suspended California’s landmark global warming law, AB32. Californians overwhelmingly rejected the measure.
California has endured three spikes in gasoline prices this year, each set off by fears that the state’s unique, isolated gasoline market could be running low on supplies. The state’s drivers currently pay, on average, $3.70 for a gallon of regular, according to GasBuddy.com. The national average is $2.63.
California uses pollution-fighting gasoline blends that are different from those in other states. As a result, most of California’s fuel comes from 14 refineries in the state. If several experience mechanical problems at the same time, supplies tighten and prices jump.
California’s refineries also export gasoline abroad, leading Consumer Watchdog and other critics to claim that the oil companies are purposely keeping supplies low.
Consumer Watchdog released a report Wednesday estimating that the state’s drivers have spent $4.8 billion more on gasoline than average Americans since the start of February, when this year’s first price spike began.
They also cited data from the California Energy Commission showing that the margin at California refineries — a figure that includes both profit and costs — has jumped to $1.61 per gallon, up from 47 cents in July 2014. In contrast, the price of crude oil, gasoline’s raw material, has been cut in half.
“This is a market that is functioning horribly — it is very far from the ideal of the way a capitalist market is supposed to work,” Steyer said Wednesday. He acknowledged, however, that Sacramento’s current legislative session ends in a month, leaving little time for politicians to take action. He did not specify when a ballot measure might go before voters.
“This is a situation that cries out for action from elected officials,” Steyer said. “We don’t know who’s going to answer the call.”
David R. Baker is a San Francisco Chronicle staff writer. E-mail: [email protected] Twitter: @DavidBakerSF