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Who is to Blame for Rising Gas Prices in California?

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    Platts Global Director of News John Kingston on California’s surging gas prices.

  • Duration 4:12
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How -- California gas price crisis -- -- asked John Kingston global director.

Of news with Platz nice to see you -- -- how to pick up on the last point that he's that he's so we've we've gone through the blame game.

We asked the reporter of the drivers are claiming they're blackening gas station -- we asked him he's blaming government regulation but he's also blaming the oil companies that don't want -- -- these refineries.

Why don't they want to -- -- refinery.

Well you know first of all there's really only -- -- to US companies that are fully integrated producer of the welfare and also refinements -- Chevron and ExxonMobil.

And too big foreign companies PP -- -- everybody else has gotten out of it because really even though it's all dealing with oil.

Operating on upstream company that drills for oil look forward all around the world and refining it are really two different situations like the district uniform and a -- -- Yeah -- you don't expect want some victories.

The bottom line to what he was sitting and refineries are just not agree business right now you can't control the price of what you're oil's -- -- be you there's all kinds of government regulation mean he says that oil -- blames the oil companies for not wanting owner refinery.

Blamed the government for making it too hard well actually right.

Now it and forget California and also rest of the country -- owning a refinery is a pretty good business but what I have been -- the north yeah that's an argument that you're getting oil from Europe it is right there is not good in the -- the country it's great it's all over the map and they can be haven't a fabulous here one year at a terrible you the next and didn't a lot of major oil companies like ConocoPhillips.

Like marathon they just decided we don't wanna do that so they hide their refining operations -- the separate arms.

And their acting like independent refiners marathon today.

What the Texas City plant for BP and BP is slowly but surely.

Getting out of the US refining business so you can see what's happening and it's going to be interesting in the future politically because.

How you gonna blame big oil for gasoline prices if they don't -- a single barrel.

-- you're so Smart you've been in this industry forever you know -- you've been doing it for as long as I've been following it you've been at the top who would you blame in this situation tell -- -- -- well it's I hate to put -- really want.

The -- aren't what -- -- the California has lost a lot of refining capacity though not as much as mr.

Kerkorian seems to indicate I was looking through some numbers today.

About crude oil throughput on the West Coast what's known -- -- five it's not down as much as most people think from its peak okay.

So but that's a factor -- -- California no doubt about it they've got the special blend of gasoline.

And they have made it very difficult for anybody to -- any more material and plus there are geographically isolated.

Now really what you gotta watch out for is they are now in the first steps of what they -- low carbon fuel standard.

Which right now is not a particularly onerous.

Regulation.

However almost everybody is looking at this insane by 2015.

This is going to be in -- -- It's gonna get worse California.

Thought about worsened today but -- dissented for refiners.

The it's going to get more more difficult because they have to -- -- is supposed to be planning more.

Advanced biofuels but for the most part don't exist a lot of the California crude oils that they've been relying on are gonna have a very high rating what's called carbon intensity.

So 2015.

Is the real crunch time for California and the next significantly.

Standards that are killing drivers in California today -- reason everyone is out there are suffering right now you're saying.

It's gonna get worse by -- fifteen the standards are getting even higher there blending in these things that we don't stories about here -- money that do not exist if bio fuel.

Says something about the government kind two years ago in an initiative that was pushed primarily by Valero Tesoro the two big independent refiners out there.

There was an initiative on the November ballot to delay the implementation of AB 32 which is the big greenhouse gas regulation.

Voters in California turn that down.

-- -- pretty large margins so you know the voters have said we want AB thirty tilt and they're gonna get it and I can you can't blame this on AB 32 you can't.

But I didn't this could be even though -- has nothing to do with the low carbon fuel standard.

You're talking about two or three years this is -- -- big regulation that -- stark divide on this industry is going to be very interest.

So we just followed the entire train from beginning to end at the end of the day drivers have only yourself to blame because you voted for this or you didn't go out and vote to stop it that's that's where we come down you know -- -- -- -- Her age -- instead.

We answer the question I don't know if --

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