Over the Hill

Higher prices make case for oil and gas regulation

Special to The TribuneOctober 12, 2012 

Phil Dirkx

Every time I drove past service stations last week, their signs proclaimed higher prices. The prices increased almost 50 cents in a week.

Then on Sunday, Gov. Jerry Brown authorized oil companies to start selling winter-blend gasoline early. The more expensive summerblend gas causes less smog in hot weather. Winter-blend gas should cost less but gas prices may not fall as quickly as hoped because California oil refineries are still having problems.

A key part of Chevron’s refinery in Richmond won’t restart until January. It was damaged by the Aug. 6 fire, which probably also kindled the gas-price increases.

Other gas-supply disruptions included a Chevron pipeline malfunction, a power failure at the Exxon Mobil refinery in Torrance and the continuation this month of work on that refinery.

The fire, price-spike and maintenance problems could indicate carelessness , mismanagement or greed. Whatever they signify, we can’t afford it. So what can we do? Should we break up the oil giants? Should we just rely on competition to improve them? Should we strictly regulate them?

Breaking up didn’t work in 1911 when the U.S. Supreme Court broke John D. Rockefeller’s Standard Oil Co. into 34 smaller pieces. Many pieces didn’t stay small. They grew. Some rejoined other pieces. Some merged with outside companies. Standard Oil of California became Chevron, then ChevronTexaco and now Chevron again.

OK, what about competition? Will competition automatically force big corporations to do right? Corporations often praise competition but I think they actually hate it.

Just watch how corporations act. They do their best to destroy their competitors. And if they can’t destroy them they merge with them. The last thing they want is actual competition. If Chevron and Texaco thought competition was so good, why did they merge? No, competition is not an automatic cure-all for unfair, unethical business practices.

Nor are regulations a cure-all. But maybe we could do some good if we regulated gas and oil businesses as public utilities just as we try to regulate the natural gas, electricity and telephone businesses.

But it won’t be enough to choose a gasoline-andoil commission to regulate them, and then sit back and forget them. If we do that, the commissioners will, after a few years, get cozy with the corporation lobbyists.

We must remain noisy and committed, at least part-time.

I’m surprised some of us aren’t already out there picketing gas stations and corporate headquarters buildings.

Phil Dirkx's column is special to The Tribune. He has lived in Paso Robles for more than four decades, and his column appears here every week. Reach Dirkx at 238-2372 or phild2008@sbcglobal.net.

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