American energy giant Valero has responded to democrat communist politicians who demanded information about high gas prices in California.
This from slaynews.com.
The company issued a blistering rebuke of all the communist policies that caused oil prices to soar.
Valero wrote:
As demanded, and with one business day to respond, Valero is providing the following response to the California energy commission.
As the commissioner knows, and as countless investigations have demonstrated, market drivers of supply, and demand, together with government-imposed costs and specifications, determine market price.
Ironically, on the same day, we received the commission’s letter, a federal judge in a 103-page reasoned order, following review of thousands of pages of documents and hours of depositions and discovery, yet again threw out another case alleging price conspiracies by the fuel industry finding no basis for the allegations.
Valero does not publicly disclose extensive details that could be competitive regarding our maintenance or supply strategies due to antitrust concerns.
However, in light of the seriousness of the implications of your letter, we will provide the following general information.
We do have planned maintenance activity underway at one of our California refineries.
This maintenance is required to keep the refinery, running safely and properly, and to meet the regulatory expectations of the state.
We have made appropriate arrangements to source supply and/or intermediates to keep our refinery as close to full rate as possible.
We also even built inventory or arranged for additional supply to assure we meet our contractual obligations.
Valero does this when we have the opportunity to plan for a significant outage.
This maintenance turnaround was handled no differently.
As to why inventories may be low, we believe it is because post-COVID demand is growing and supply is limited.
We have been endeavoring to keep our refineries at full production and no one has produced more low carbon, renewable fuel for the California market than Valero.
Nevertheless, the market has been very tight.
With a very short supply market, inventories are pulled down to satisfy the demand.
In fact, the commission would not want to see refiners holding inventories in a tight market.
Also, as noted below, the closure of California refineries has necessarily eliminated their working inventories, which will lower overall state inventory levels.
As to the separation between California prices and the prices in the rest of the United States, we can offer the following information.
For Valero, California is the most expensive operating environment in this country and a very hostile regulatory environment.
California policymakers have knowingly adopted policies with the express, intent, of eliminating the refinery sector.
California requires refiners to pay very high carbon cap and trade fees and burdened gasoline with the cost of the low carbon fuel standards.
With a backdrop policies, not surprisingly, California has seen refineries completely close or shut down major units.
When you shut down refinery operations, you limit the resilience of the supply chain.
NEW: VALERO responds to California’s demand for answers recent gas price spike.
“As demanded with one business day to respond…”
“California is the most challenging market to serve in the United States for several reasons.” pic.twitter.com/r2T2UQleme
— Ashley Zavala (@ZavalaA) October 8, 2022
