The idea that oil companies and gasoline refiners could gouge Californians — and other Americans to a lesser degree — by as much as 100% of the previous price of gasoline seemed utterly preposterous until February.
That’s when President Biden slapped an embargo on Russian oil, depriving California refineries of between 2% and 3% of the supplies they had been using.
Average pump prices instantly rose from $4.70 per gallon across the state to above $6. Later, in some places, prices even topped $9 per gallon, about twice their price just six months ago.
That’s gouging, pure and simple. Yes, the worldwide price of oil was up, but not in anywhere near such large proportions. Many citizens are still making excuses for oil companies, but their financial reports make it clear they are reaping windfall profits in the billions of dollars.
Now comes a new report that indicates the money motorists are losing to the cartel-like oil industry is just a fraction of what consumption of oil and gas really costs us, when all the wrinkles and ripples are figured in.
How does $10 trillion by the year 2045 sound? That’s the figure arrived at by the Consumer Watchdog advocacy group, whose analysts are the first to even attempt figuring all the expenses that are and will be created by use of oil and natural gas over the next 20 years-plus.
The report gains credibility from the fact that Consumer Watchdog is the outfit whose 1987 ballot initiative curtailing insurance prices in California now saves people here more than $3 billion per year. That’s an average of almost $80 per year per Californian, of all ages and ethnicities.
So it can be a mistake to ignore the group’s oil cost estimates, as virtually all California media have since issuance of the report in late spring.
Here are just some of the annual costs listed in the report from use of oil and natural gas over the next 23 years: $94.2 billion from wildfires and drought; $1.4 billion in heat-related deaths indirectly caused by California oil wells; $339 billion for smog controls.
That’s a total annual cost of $434.6 billion for using and drilling petroleum, or $10 trillion over 23 years, about 70% more than it costs to run the federal government for one year — including huge programs like Medicare, Social Security and the military.
Are those figures realistic? Look at the wildfire number: Despite all its mitigation moves of the last 25 years, California is the No. 2 emitter of greenhouse gases among U.S. states, surpassed only by Texas.
The state Air Resources Board says 85% of the greenhouse gases produced here stem from production and use of fossil fuels, helping further both dry conditions and extreme heat that have exacerbated the state’s pre-existing problems with wildfires, vastly driving up property damage, lives lost and firefighting costs.
“One third of the costs of drought (and the fires it furthers) can be attributed to greenhouse gas emissions caused by (burning) fossil fuels,” says the report.
Global warming driven by oil use will add to the costs listed, too, by raising sea levels and destroying further billions of dollars in property before 2045.
Then there’s the smog mostly created by both vehicles and oil- or gas-fired electric generating plants. Costs of treating emphysema, not to mention creation of electric vehicles and other smog-fighting measures, already amount to more than damage from wildfires.
It all makes the state’s efforts to cut greenhouse gases via a cap-and-trade program, smokestack filters and other tactics look puny.
What’s more, the estimated $10 trillion, 23-year cost of using and drilling oil and natural gas does not include what motorists spend for gasoline, the price of which has fallen from its peak, but is never again likely to sink to pre-February levels.
All these numbers matter only if their sheer shock value causes actions.
But that’s not likely, as this report now looks to be ignored, just as the state auditor’s springtime report on the unreliability of California housing need estimates never spurred so much as a word of reaction from either Gov. Newsom or state Attorney General Rob Bonta.
Email Thomas Elias at [email protected].