Thomas Elias writes in the Los Angeles Daily News that just one week before many California motorists began paying upwards of $4.30 per gallon for gasoline, oil tanker Teesta Spirit left Los Angeles headed for ports on the west coast of Mexico carrying more 300,000 barrels of gasoline refined in California. At a time when oil companies were raising prices by as much as $1 per gallon in some regions, oil companies like Chevron and Phillips 66 shipped about 100 million gallons of gasoline out of California. "Oil refiners have kept the state running on empty and now they are sending fuel refined in California abroad just as the specter of low inventories drives huge price increases," says Jamie Court, president of the Consumer Watchdog advocacy group.
According to Elias as the oil companies were shipping out that fuel, they reaped unprecedented profits reportedly approaching $1.50 for every gallon of gasoline they sold at the higher prices. "Gasoline prices are determined by market forces, and individuals who understand how commodity markets work have recently testified that those markets are working as they should," responded Catherine Reheis-Boyd, President of the Western States Petroleum Association, to charges of price gouging. "All of the many government investigations into gasoline markets in recent years have concluded that supply and demand are the primary reason gas prices go up and down." Kathleen Foote, who heads up the antitrust division at the California attorney general's office, agreed that the industry operates like an oligopoly in the state. But proving price fixing is difficult in a field where only a few players exist. "This system is made to break because oil refineries keep it running on empty," concludes Court. "They have every incentive to create a price spike like this."
(Score: 2, Insightful) by Anonymous Coward on Wednesday July 29 2015, @06:31AM
Break up oligopolies or have rules that encourage new entrants.
Being oligopolies made Detroit stupid, made telecoms stupid (think Comcast & friends), made Microsoft stupid, and is making oil companies stupid.
(Score: 3, Interesting) by davester666 on Wednesday July 29 2015, @07:26AM
This is exactly what the electric companies do as well.
Here in Alberta, one of our energy companies just got a token fine for repeatedly doing "routine maintenance" on one of their power plants during peak hours, resulting in them making more money than if that power plant remained online.
And the refinery companies are blatantly doing this. There is a oil glut in North America [it's why Oil Sands oil is so cheap and we want to ship it to the coasts to export, US refineries around us claim to be oversupplied, so they don't pay anywhere near the price of oil (even allowing for the extra refining needed for our oil)].
And there is no policy you can implement to get someone else into the market [that can materially make an impact], because all the major existing players tell anybody planning to build a new refinery "good luck with that. we'll undercut your prices until you sell out to us, and we can do it indefinitely because our refineries are all paid for".
When there is a high barrier to entry and a limited number of competitors, they all make the most money by....charging the same high rate as everyone else.
(Score: 2) by wonkey_monkey on Wednesday July 29 2015, @07:46AM
Oligopolies almost always suck
It is a fun word to say, though. Oligopoly. Oooliiigoopoly.
systemd is Roko's Basilisk
(Score: 3, Funny) by slinches on Wednesday July 29 2015, @01:53PM
Well, in this case, wouldn't it be an oiligopoly?
(Score: 0) by Anonymous Coward on Wednesday July 29 2015, @08:18AM
almost always
Bell labs spawned much of what we have today.
I've heard that long distance calling cost a ton back in the day though.
(Score: 2) by Joe Desertrat on Thursday July 30 2015, @02:46AM
Bell Labs spawned much of what we have today.
I've heard that long distance calling cost a ton back in the day though.
Pre-breakup it would cost from $8-$12 a month for your landline for local calls. You were supposed to pay for additional phones in your home, but if you disconnected the ringer on the extra phones apparently they could not detect them. When they opened up competition for long distance you could get service for that for as low as an additional $7 per month. Long distance calls cost per call, but it was nice that it discouraged unnecessary yapping on the phone.
(Score: 4, Insightful) by Gravis on Wednesday July 29 2015, @06:47AM
i don't know about the rest of you but i'm really just done with oil companies. everything they do is just evil. we really need cheaper batteries and solar panels with larger subsidies. the longer we wait, the worse off the future will be.
(Score: 4, Interesting) by c0lo on Wednesday July 29 2015, @07:33AM
Just from curiosity: why do you need larger subsidies? A quick search brought some data 1.5 years old [cleantechnica.com] (Feb 2014), which says:
(note: if I'm not mistaken, the Q2/Q3 are 2013?)
True, the cost of the panels on your roof isn't that low. Same source says:
I guess the first thing would be to check how the heck these "soft costs" blow up the total to 7-10 times the cost of the panels. Some council taxes or something?
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 3, Informative) by TheRaven on Wednesday July 29 2015, @10:05AM
The average electricity price in the USA was somewhere in the range 8-17¢/kWh in 2012. Apparently it's higher now, though I don't have numbers for that. Let's pick 10¢ as a rough ballpark to work with. If the cells cost $4.72/W installed, then that's $4,720/kW. At 10¢/kWh, you need 47,200h of generation to reach break even. That's about 16 years, assuming 8 hours a day of sunlight on average. If electricity costs 20¢, it's 8 years. In some parts of the USA, it's closer to 4 years. Of course, if you're getting solar panels installed on your roof, then you may as well install solar water heating at the same time, which saves a lot more if you live somewhere where heating, rather than cooling, is important for a house.
The UK is currently cutting solar subsidies because the panels are cheap enough that relatively small commercial installations (a smallish field, not a rooftop) are very profitable and the subsidies are just sending taxpayers' money into the pockets of investors who would still make a good return without it. They've done their job and got the panels down to an affordable price.
The problem with home installations is picking the time to buy. Cheap panels have gone from about 8% efficient to about 12% in the last few years, with some expensive ones at 21-22%. It looks as if 20% is quite feasible for mass production, 25% might be too. The theoretical maximum for photovoltaic is around 45% and getting near 40% is very hard. If you can buy 20% efficient panels in two years for the same price that you can buy 12% efficient panels today, then it may be better to wait. New panels come with a guarantee of 80% of their initial efficiency for around 20-25 years, so you're not going to want to replace them soon after you've installed them. This doesn't apply to commercial installations, where the installation costs per Watt are a lot lower.
sudo mod me up
(Score: 3, Informative) by c0lo on Wednesday July 29 2015, @10:51AM
"Energy prices never go down." (grin)
Seriously speaking, theoretically is not impossible, in practice however...
I got my 4.2kW with about $1.6/W about 2-3 years ago, when the energy price was 22c/kWh. It is now 28c/kWh. As I'm a net exporter, ditching $1300/y on my energy bill leads to a RoI of 5-6 years
(before you ask: Melbourne, Aus)
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by morgauxo on Wednesday July 29 2015, @06:49PM
>>we really need cheaper batteries and solar panels with larger subsidies.
>>Just from curiosity: why do you need larger subsidies? A quick search brought some data 1.5 years old (Feb 2014), which says:
Well, it would be nice to have alternative energy subsidies that were at least as large as the subsidies that oil companies get so as to level the playing field.
(Score: 2) by sjames on Thursday July 30 2015, @04:25PM
Perhaps rather than outright subsidies, we need the installation cost (which is the bulk of the cost) supported by the zero interest loans the banks normally get from the fed. Set the payback such that the homeowner sees an immediate 10% savings over their power bill and keep it that way until it's paid off.
(Score: 1) by Marco2G on Wednesday July 29 2015, @08:14AM
Yes, well, I'd really love to have a Model S in my garage but it's not like I have 100k Shaboozies lying about.
Aynway, if we want to break the oil camel's back, we'll need nuclear power. A lot of it. Good luck getting that one through the people's collective thick skull...
(Score: 1, Interesting) by Anonymous Coward on Wednesday July 29 2015, @08:17AM
The patents on large capacity NiMH batteries [wikipedia.org] should be expiring soon. IMO, the current practice of using the relatively volatile Li-ion chemistry is just an expensive work-around for these patents.
The standard Prius uses NiMH a battery. The plug-in version uses the more expensive Li-ion.
I have run into the 3Ah limitation building a lighting system for my bicycle. I was quoted about $50 per cell for 10Ah NiMH D cells. Grey-market cells from China only costed me about $50 for 16 cells.
In typical retail stores, the NiMH D cells you see (if they are sold at all) are only 2-3Ah. The reason is that they are actually AA cells in a D size case. You don't get a discount for buying such cells: they are priced as if they are D rather than AA cells (huge mark-up mentioned above aside).
(Score: 2) by black6host on Wednesday July 29 2015, @09:22PM
I hear you regarding D cells. You can buy adapters that make an AA battery the same configuration as a D cell. Sure, there is an upfront cost but at least you won't be paying a premium for essentially the same thing every time you buy a D cell.
(Score: 1) by Flyingmoose on Wednesday July 29 2015, @09:49PM
The article you linked says "On August 24 2010 patent US6413670 expired due to lack of fee payment, hence removing any patent encumbrance in the USA." So, what gives?
(Score: 3, Informative) by Anonymous Coward on Wednesday July 29 2015, @07:04AM
Buy from the lowest bidder, sell to the highest bidder. Rich get richer, poor get poorer. Stuff your fucking face while your neighbors starve and die in a pit of their own shit. That's how CAPITALISM WORKS, motherfuckers! GO, USA, GO!! FUCKING THE WORLD FOR PROFIT!!!!
(Score: 3, Interesting) by Anonymous Coward on Wednesday July 29 2015, @07:36AM
Californians, amongst the highest quality of life people in human history, are complaining that their gas is getting closer to the world average while Mexicans, with the lowest standard of living on a continent, are getting that fuel instead and you call that fucking the world.
(Score: 2, Informative) by Anonymous Coward on Wednesday July 29 2015, @12:37PM
Californians, amongst the highest quality of life
Keep in mind that there are many people with a very low quality of life living in California. People living in areas with very high crime, with low access to quality food, and that are not served well by public transportation.
(Score: 0) by Anonymous Coward on Wednesday July 29 2015, @07:40PM
Keep in mind that capitalism has a greater chance of solving that problem than Socialism or Marxism. As the OP unwittingly illustrated, capitalism naturally redistributes wealth. Those low-cost suppliers make money and create jobs. Those high-paying customers lose wealth in the transaction. The middle man increases wealth and hopefully expands operations and creates jobs. This in turn increases demand on the low-cost supplier. The low-cost supplier increases prices. The middle-man increases prices. The wealthy lose more wealth. The low-cost supplier sees how vital he is to middle man's operation and increases prices some more. The middle man passes this on to the wealthy man. The wealthy man complains to the middle man. The middle man complains to the supplier. The supplier refrains from altering prices anymore, as much as it can - until something in nature affects the system. The middle man does the same. The wealthy man still grumbles but still pays.
no one can truly help the poor but the poor themselves. give a man a fish vs. teach a man to fish. you can lead a man to water but you can't make him fish.
(Score: 0) by Anonymous Coward on Thursday July 30 2015, @02:49AM
no one can truly help the poor but the poor themselves. give a man a fish vs. teach a man to fish. you can lead a man to water but you can't make him fish.
Yeah, yeah, yeah. Too bad the current system is teach a man to fish, lead him to water, then he finds out he's not allowed in the water.
(Score: 0, Informative) by Anonymous Coward on Wednesday July 29 2015, @12:54PM
Once again, someone has confused A MARKET with Capitalism.
Capitalism refers to a method of production where there is an ownership class and a separate employee class.
The opposite of that is an operation where the workers are the owners and all workers are equal and all decisions are made by a democratic vote with each vote being equal to any other vote.
...and if all the Capitalists had died yesterday, MARKETS would still exist.
So would profit.
.
How to determine what economic system you have:
Is the means of production owned solely by the workers? -- YES --> Marxism|Socialism|Communism
|
| NO
v
Can the workers leave for another job at will? -- YES --> Capitalism
|
| NO
v
Can the owner kill any worker without legal repercussions? -- NO --> Feudalism
|
| YES
v
Slavery
-- gewg_
(Score: 5, Insightful) by PinkyGigglebrain on Wednesday July 29 2015, @07:36AM
As much as I dislike the oil companies the first thing that came to mind when I read this wasn't "OMG the oil companies are shafting everyone again!!". That was the second thing.
The first thing was that I have to wonder if they might have been completing contracts that had been signed months prior, and if the had kept the fuel intended for Mexico, etc., they would have had to pay contract penalties that would have exceeded whatever profit they would have made by keeping it in the local market even with the spiking prices.
They could say honestly that the shipments were for existing contracts, even though they probably signed the agreements knowing it would cause a shortage, which would allow them to not get investigated deeply for price fixing and such.
It should be looked into but I don't think the oil companies would be stupid enough not to have some kind of solid alibi to get them off the hook. They have too many very highly paid lawyers.
"Beware those who would deny you Knowledge, For in their hearts they dream themselves your Master."
(Score: 1, Touché) by Anonymous Coward on Wednesday July 29 2015, @09:17AM
They have too many very highly paid congressmen.
FTFY
(Score: 2) by PinkyGigglebrain on Wednesday July 29 2015, @12:22PM
Indeed! Though a majority of congresscritters started out as lawyers.
We're both right! :)
"Beware those who would deny you Knowledge, For in their hearts they dream themselves your Master."
(Score: 2, Interesting) by TheReaperD on Wednesday July 29 2015, @01:56PM
Electricity trading companies (not producers or utilities; literally just companies that exist to move numbers on a spreadsheet and inflate the price) did the same thing during the manufactured California energy "crisis." When there were rolling blackout and regional brownouts, what did the energy traders do? They bought electricity generated in California and shipped it to Texas and then sold it back at a 300-5000% markup and pocketed all the money. A later investigation proved that there was plenty of electricity being generated in California to supply the domestic market but, that the energy companies were selling it out of state at a loss or just plain throwing it away to create an artificial supply crisis to rake up enormous unethical and often illegal profits. The oil companies are using the exact same strategy. This is de-regulation at work folks! Watch carefully and learn something.
Ad eundum quo nemo ante iit
(Score: 0) by Anonymous Coward on Wednesday July 29 2015, @11:33PM
...were selling it out of state at a loss or just plain throwing it away to create an artificial supply crisis to rake up enormous unethical and often illegal profits.
Unethical yes. Illegal, no. This was THE result of the deregulation that had just occurred in California. A friend (who's conscience got to her, and she later changed careers), helped write the laws that allowed these shenanigans to happen-- while being paid by Sempra Energy Inc.
Government by and for the corporations is what caused the California "energy crisis".
(Score: 2, Insightful) by DutchUncle on Wednesday July 29 2015, @03:23PM
Uber has surge pricing. Is that market forces at work, or price gouging? This is a business, friends, and there's no reason that someone with a product to sell has to sell it at a cheaper price rather than a higher price (even if some of that higher price is eaten up by shipping costs). If you want decency, or fairness, or loyalty to country (or anything else), you want REGULATION. Yes, it has been abused, but there's a good reason it exists.
(Score: 2) by sjames on Thursday July 30 2015, @04:35PM
It is the result of unhealthy markets. Unhealthy markets happen either when there is inadequate regulation or the regulations are corrupted by a few large players in the market.
We have a LOT of unhealthy markets in the U.S.
(Score: 3, Interesting) by BananaPhone on Wednesday July 29 2015, @03:27PM
ENRON did this with electricity:
California had an installed generating capacity of 45GW. At the time of the blackouts, demand was 28GW. A demand supply gap was created by energy companies, mainly Enron, to create an artificial shortage. Energy traders took power plants offline for maintenance in days of peak demand to increase the price.[9][10]
https://en.wikipedia.org/wiki/California_electricity_crisis [wikipedia.org]
Follow the money!