Refineries profit and Alaskans are gouged

commentJuly 14, 2012 

I'm never surprised by the unabashed glee with which those on the right shill for the rich and powerful, but the Republican support for the fuel price gougers here in Alaska has even me flabbergasted.

Alaska's gas prices are through the roof. Why? Oiligopoly. Two refiners control virtually 100 percent of the gasoline market -- with Tesoro controlling 80 percent and Flint Hills, owned by the Koch brothers, controlling 20 percent.

You know the Koch brothers: job creators extraordinaire. They've enjoyed a decade of low taxes, fired 13,000 workers since 2007 and seen their net worth skyrocket from $34 billion to $50 billion. Yeah, now you remember.

When you control 80 percent of the market for an essential commodity, you can charge whatever you want, which is exactly what the refiners are doing. It's legalized price gouging.

Sure, it's more expensive to do business in Alaska. We're a smaller, more remote market, but does that explain why we have the highest fuel costs in the nation? No. Much of the oil comes from Alaska, is refined right here and transportation costs are minimal. Alaska has the lowest gas taxes in the country.

The real culprit is Alaska's refinery profit margins. They are through the roof. For years, Alaska's gasoline refinery margins were about 19 percent higher than those in Washington. In 2008, oil prices spiked and so did refinery margins. Prices quickly dropped in the Lower 48 but have never come down in Alaska.

From 2008 to March 2012, Alaska margins averaged 106 percent above Washington's. Probably the most telling fact from the recent Alaska Senate hearing was that Tesoro and Flint Hills are somehow able to refine jet fuel for about 3 or 4 cents more per gallon than the national average. Coincidentally, there is strong outside competition for jet fuel.

Maybe the refiners have an answer for this. But they're not talking. According to the nonpartisan Legislative Research Agency, the difference in the refining margins is "stark and it's been fairly sustained." The researcher said the refiners wouldn't explain the spike. Tesoro was asked to appear before the Senate Committee but couldn't muster anyone to testify (although the company did manage to find a lobbyist to monitor the proceedings).

With the price of gasoline such a big political issue, you'd think fixing this problem would be a no-brainer for our legislators. Sen. Bill Wielechowski and Rep. Pete Petersen have been leading the inquiry into the price gouging issue for years. Who could possibly be against more competition to drive down our fuel prices?

Well, the right-wing protectors of corporate interests went nuts. A KGOP talk show host, who was firmly planted next to the Tesoro lobbyist during the Senate hearing, helpfully explained that Alaskans are just a bunch of whiners. Poor Tesoro is not gouging us -- if you can't afford to pay $200 a week, you should ride your bike into work every day. From Wasilla.

Other right-wingers claimed fighting price gouging was merely a campaign ploy. Imagine that: legislators actually sticking up for their constituents instead of lobbyists and multinational oil companies. Who do they think they are?

Last year it was reported that Tesoro lobbyists spent big money wining and dining Republican Reps. Mike Chenault and Kurt Olsen and Parnell energy advisor Gene Therriault, along with some of their staff and families.

That turned out to be a good investment. Parnell opposed a bill banning price gouging, House Speaker Chenault assigned the bill to Olsen's House Labor and Commerce Committee and Olsen killed the bill without even a hearing.

It's an interesting tactic. Block any legislation and refuse to even have hearings about price gouging. Then, when someone tries to fix things, complain that it's a campaign tactic.

Republican Senate candidate Bob Roses, who happens to be running against Wielechowski, chimed in, "You could do all the studies you want, you aren't going to find that anybody's gouging." Really? I'm sure the contributions Mr. Roses has gotten from Tesoro or the fundraisers he's been having at the Petroleum Club have nothing to do with his position.

Every Alaskan is essentially paying $500 a year to Tesoro and the Koch brothers. That's more than $100 million drained from our pockets to go to some of the largest corporations and wealthiest people on the planet. But quit complaining, Alaskans! Next time you spend $100 to fill up your SUV, just think of it as your small contribution to help the Koch brothers buy their next yacht.


Shannyn Moore can be heard weekdays from 6 to 9 p.m. on KOAN 1020 AM and 95.5 FM radio. Her weekly TV show can be seen Saturdays and Sundays at 3 p.m. statewide on ABC affiliate KYUR Anchorage, KATN Fairbanks and KJUD Juneau.

Anchorage Daily News is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service