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Lincoln Brown

Lincoln Brown

Lincoln Brown is the former News and Program Director for KVEL radio in Vernal, Utah. He hosted “The Lincoln Brown Show” and was penned a…

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California Issues Subpoenas To Oil And Gas Companies In Price-Fixing Probe

Chevron Corp, ExxonMobil Corp, Shell, Phillips 66, Valero Energy Corp. and Tesoro have all received subpoenas from California Attorney General Kamala Harris. The subpoenas are part of an inquiry into why gas prices in the state are higher than those in other states.

The California AG’s office wants information regarding maintenance shutdowns at refineries as well as pricing, as they may relate to shortages that drive up prices.

Chevron and Valero have pledged their cooperation, while Exxon and Phillips 66 have not commented on the subpoenas. Tesoro and Shell had yet to respond as of Thursday. The Western States Petroleum Association said that its members would cooperate as well.

Association President Catherine Rehies-Boyd stated that she expected the findings to mirror those of the past: that prices in California are driven by the market. In 2006, the California Energy Commission (CEC) conducted an investigation similar to the one launched by Harris. That investigation did not uncover any evidence that oil companies had manipulated prices. The CEC has had an advisory panel review gas prices in the state over the last few months in order to determine if the state needs to take action to protect consumers.

Related: Is Raymond James’ $80 Oil Realistic?

California is located on the coast and is reached by few pipelines. Additionally, in February of last year, an explosion at the ExxonMobil plant in Torrance caused damage to a gasoline producing unit that produced approximately 10 percent of the state’s gas supply. However, during that time, refineries in California recorded net incomes, while gas prices fell elsewhere in the nation.

Critics have also accused the companies of price-fixing. Gordon Schremp, who is a senior fuels analyst for the CEC commented “There have been all kinds of major allegations, I’ve seen [attorney general investigations] with all kinds of price spikes. I don’t know of an incidence where they’ve come back and said, yes we’ve found manipulation in the gasoline market.”

Lincoln Brown for Oilprice.com

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