Dear Senator Boxer:    rev. 11.15.2008 Back to Lessons

Thank you for your email letter of 07.07.2004.
I must reply to many of the points you made on your linked website referenced in the letter,

In it, you link to your "Nine-Point Plan to fight rising gas prices".

While I believe the goal is popular, many of the ideas that are presented really won't work, and should have more thought given to them before they are put into action or before legislation like the kind you are sponsoring and supporting is passed.

Your Points and
My Responses:

[from your website]:

1. First, I have called on the Federal Trade Commission to investigate the current gas price spikes in California, which began in mid-February. I have met with the Chairman of the FTC, who confirmed that there was an "anomaly" in California's gasoline market and that the FTC was conducting an informal investigation....

The anomaly is that there are too few refineries in CA and that if any one has a brief accident or shutdown, the relative effect on our market is MUCH bigger than in any other state. remember that CA is 10% of the entire country in many ways! There are few, if any, gasoline pipelines that cross the CA state line to alleviate shortages in the event of a refinery problem in CA. Trucking in gasoline from other states might work Back East, because the states there are smaller and hence, "closer together," so trucking the gas in doesn't add much to the cost or price. We're different. It's a big state, remember?


2. I have introduced legislation that would require an automatic investigation of the gasoline market for possible manipulation any time that average gasoline prices in a state increase by 20% or more over a three-month period....

Like most economic imbalance problems, the Market can fix them about three times faster than legislation, but that's a religious issue, and you just don't believe it, no matter how many times it happens in real life around you! Lawyers try to solve problems with Laws. Even if there are other, better, tools. [reference:]


3. I am cosponsoring the Gasoline Free Market Competition Act authored by Senator Wyden, which would give the FTC the authority to issue "cease and desist" orders in order to prevent market manipulation whenever four or fewer gasoline companies control more than 70 percent of the gas supply in a given market....

What do you define as "free market"?! How many competing companies?? Fifty? Twenty? Ten? It's a bit of a steep hurdle to jump to get into the petro business: lots of startup costs and infrastructure. Economies of scale help more than in many other industries. So, you want to reduce those economies of scale by splitting up the market among more competitors?! That's not what defines "a free market": it's not the number of competiors!


4. We need to stop filling the Strategic Petroleum Reserve - which is now at 93% of capacity - in order to increase the supply of gasoline on the market. It doesn't even make sound economic sense to buy gas for the reserve when prices are at a peak....

Pretend for a moment that the SPR is there so that the military, police, rescue squads, and public safety and defense will have fuel to get around if the crude oil supply to the USA is cut off? Then stop thinking about using it to affect market changes! It's not the right tool! Duh!


5. I am cosponsoring a Senate resolution that calls on the President to work with OPEC to increase world crude oil supplies in order to achieve stable crude oil prices.

Yeah, right: motherhood, apple pie, and what do you plan to do, sue them if they don't? It's not in their best interests to pump much faster! Most of them are operating so close to capacity that they couldn't increase production enough to help anyway! Are you going to bring stability to Venezuela, or let Haliburton go into Saudi Arabia, Iraq, Iran, etc., to help them build refineries or drill for oil?????


6. I am cosponsoring a bipartisan bill authored by Senator DeWine that would subject OPEC to the laws prohibiting collusion, market manipulation, and other anti-competitive behavior.

No offense intended, but.... Were you drunk when you signed up for that????? Yeah, right: motherhood, apple pie, and what do you plan to do, sue them? And in what court, where? And who will do the enforcement??? There is no court to take them to! Some unions tried to sue Saudia Arabia for loss of jobs during the First Gas Crisis in '73. They were advised to back off before they became the laughing stock of the whole world. Don't join them in that role!


7. I have called on Shell Oil to find a buyer for its Bakersfield refinery and commit to keeping the refinery open until a buyer is found. I have also asked the FTC and Attorney General Bill Lockyer to use their powers to stop the refinery from closing. We cannot afford to lose any more California refinery capacity. If this refinery closes, it will only further stress an already tight California market.

If the profit is as high as your're trying to save us from, no company in the world would close a moneymaker like that! WHY are they closing it? Inefficiency, because it's so old?! What have you done in the past twenty years to get MORE refineries built in CA??????????


8. I have called on the EPA to grant California a waiver from the requirement that an oxygenate - MTBE or ethanol - be added to gasoline. Adding ethanol to gasoline may already be driving prices higher in some parts of the state.

1) MTBE is already out. What you WON'T win is the battle with the corn-growing states to get them to not shove their little money-maker down OUR throats! Solution: Grow corn in CA just for methanol production? Oh, yeah, we'll need energy-consuming plants to do the conversion, and no one will let that happen in their back yard in CA. You'll be NIMBY'd!


9. We may be able to reduce price spikes by reducing the number of different fuel formulations now required by different jurisdictions.

There is little question in anyone's mind that the "boutique blends" of gas that regulating bodies like CARB demand make it harder to supply enough fuel to CA. You don't sound very creative when you suggest these kinds of solutions. Cars today emit so little pollution compared to 30 years ago that taking ALL of the new cars off the road would probably not change the smog one bit! Why not try to get the OLD cars off the road! There is technology to find the gross polluting cars as they drive by, just like "photo radar", but nobody's got the balls to install it.

You should be able to do better. Please try.