A theory why the two are connected.
Big Oil buys Sacramento
Why you're not hearing a peep from California politicians on record-high gas prices.
By Jamie Court and Judy Dugan
JAMIE COURT and JUDY DUGAN are founders of Oilwatchdog.org, a project of the Foundation for Taxpayer and Consumer Rights.
May 14, 2007
WHO'S AFRAID of Big Oil? Apparently, California's elected officials. Gasoline prices are stuck well above last year's record highs and about 50 cents above the national average. Yet state politicians are not saying or doing a thing, except for raking in political cash from the oil companies and flying around the world on their dime.
Take Gov. Arnold Schwarzenegger, who once claimed that he was so rich he did not need anyone else's money — and who isn't running for another office. Yet as gasoline prices were breaking last year's record of $3.38 a gallon, Schwarzenegger collected a $100,000 check May 1 from Chevron, the West's largest refiner. The company certainly had the cash on hand. Just three days earlier, it reported a $4.7-billion first-quarter profit, up 18% over the same period last year.
The contribution brought Schwarzenegger's take from Chevron to $665,000 (making it his 15th largest donor) since 2003, and his total political tribute from the energy industry is now $4 million. According to a recent Schwarzenegger fundraising solicitation, Chevron's $100,000 buys the company special briefings with the governor, something that beleaguered motorists aren't getting.
Like power plant owners during California's 2001 electricity crisis, refiners such as Chevron have discovered that they can make more money by producing less gasoline. So they do. They have, over more than 20 years, deliberately reduced their capacity until they can barely meet California's needs under the best of circumstances. Industry spokesmen defend this as efficiency. But there is no slack in the production system, which shorts the market and raises prices.
