April 18, 2025 • 32 mins
The John Kobylt Show Hour 2 (04/18) - USC Prof. Michael Mische comes on the show to talk about Valero exiting the state and how it will be a significant impact on CA consumer gasoline prices. People are so fed up with homelessness that they want to criminalize it. More on the mass shooting yesterday at Florida State University.
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Speaker 1 (00:00):
Can't. I am six forty.
Speaker 2 (00:02):
You're listening to the John Cobelt Podcast on the iHeartRadio app.
We've got two rounds of the Moistline coming up next
hour at three twenty and three fifty, and we're on
from one to four and then after four o'clock every day.
If you missed anything, you get the podcast John Cobelt
Show on demand on the iHeart app. Going to get
right into this, we had Michael miche on USC professor
(00:25):
a couple of weeks ago. He had released quite the
study looked at fifty years of California gas prices, and
what he did is he released an analysis saying that
most of the excessive prices that we have to deal
(00:47):
with are from the state government. He said, it's largely
self inflicted. It's taxes, fees, regulations, policies, you know, like
climate change policies that provide a huge burden on oil
and gas refineries, and that there was not much evidence
(01:09):
of any widespread price gouging or price manipulation, which is
what Newsom was always claiming. And we went through that
and it was quite illuminating and confirmed all the suspicions
I'd ever had. And then we find out this week
that Valero is closing one of its refineries up in
northern California, in Benetia, and this is a major blow.
(01:33):
We once had about forty three refineries in California and
now we're down to around eight. And this Benetia complex
produced about eight to nine percent of the gasoline that
we use every every day. It's a big hit and
(01:56):
it's going to mean higher prices. Let's get Michael MChE
on you see, professor, how are you?
Speaker 3 (02:02):
I'm terrific, John, How are you today?
Speaker 1 (02:05):
I'm good.
Speaker 2 (02:06):
You wanted to talk about this closing of the refinery
by Valero up in Benetia. What is the significance of
it to the average person driving home from work today?
Speaker 1 (02:17):
How's it going to affect their lives?
Speaker 3 (02:20):
Well, I'm fred It's going to have a It's going
to affect their lives in a number of ways. Okay,
so it's not just Benetia that's closing. We're also losing
Phillip sixty six here in Los Angeles. So let's take
a look at those. We You know, we've, as you mentioned,
we've lost a whole lot of refineries over the years,
and so today we can refine about one point five
(02:45):
nine one point six million barrels of oil a day,
and we're losing Venetia and Los Angeles, so that's we're
going to lose about oh, eighteen percent of that capacity. However,
(03:07):
if you take a look of from twenty twenty three
to twenty twenty six, the schedule closing for Venetia will
be April twenty twenty six, we will be losing almost
twenty two percent of our capacity a day. Okay, so
what does that mean? That means about six point two
million gallons of gasoline a day. In shortfall, we consume
(03:30):
them in California about thirty three million gallons of gas
a day. We're going to lose about six point two
million gallons of gas a day. We're gonna have a
price increase.
Speaker 1 (03:45):
How are they going to make up that amount of gasoline?
Speaker 3 (03:50):
Well, that's a that's a that's a great question, and
it's a considerable amount to make up. Right, So, we
don't have any pipelines coming into the state, So I
if we had pipelines, we'll just go ahead and pump
gasoline through it. And pumping gas through pipeline is really
really inexpensive and extraordinarily efficient, so we'll have to bring
(04:11):
it into the state either on rail or most likely
on some type of maritime vessel ocean vehicle. So if
we did that, then we'd probably be looking at Washington State,
maybe Alaska as areas of sourcing for us, but it's
(04:33):
questionable whether or not they have the capacity to actually
provided an additional six million gallons of gas a day.
So the other alternative would be looking at Gulf Coast refineries.
In either case, we're going to have to ship the
gasoline in, probably on tankers, and you know, your average
(04:53):
tanker is going to hold about twelve about twelve point
five million gallons and gas. If we're you know, we'll
be we'll be bringing in a tanker every other day
to make up the shortfall.
Speaker 1 (05:07):
Oh jeez.
Speaker 2 (05:08):
And that's going to be collectively much more expensive than
the system we have now.
Speaker 3 (05:14):
It's going to be considerably more expensive. Uh and you
and you already named it contributing factors. So in addition
to this, and believe me, there's there's probably three hundred
people working on this all over the all over the
country trying to figure out the cost of the shutdown
of these three refineries.
Speaker 1 (05:31):
Today.
Speaker 3 (05:32):
But you you know, we have the state excise tax
that goes up all automatically on July first, and that's
probably going to hit close to sixty three cents a gallon.
We're going to have an adjustment and cap and trade
that's going to go up considerably. And then you have
the as you mentioned that the low carbon fuel standard,
which I think the consensus among independent economists is around
(05:54):
sixty to sixty five cents a gallon, So all in all,
it could be as much as a dollar eighty a
gallon if these refineries shut down there and there is
an alternative, economically viable alternative. Remember, whoever makes this gasoline
is going to charge us for this gasoline.
Speaker 1 (06:15):
A dollar eighty on top of the price we're paying.
Speaker 3 (06:18):
Now quite possibly.
Speaker 1 (06:22):
That's six dollars and sixty cents.
Speaker 3 (06:25):
Well yes, but remember the twenty five percent of the
cap and trade is going to help pay for the
California High Speed Rail project, so you know, so you know,
probably and probably the same consultants as Karen Bass hired,
So you know, I mean, it's it's all good. In
the end.
Speaker 2 (06:46):
I think we're going to be paid six sixty a
gallon and that's within a year, right, I mean, all
this stuff is going to happen over the course of
the next year.
Speaker 3 (06:55):
If if if remedial action doesn't take place, or if
there's not an invention from Washington, d C. Then the
price of gas is going to go up, and it's
probably going to grow up considerably, because look, do you
really think reduction people are going to reduce their driving
by twenty two percent in the twelve months?
Speaker 2 (07:13):
Now?
Speaker 3 (07:13):
Do you really think that airlines are going to close?
You know, it's going to slow down? I mean, you know, yeah,
traffic is off at lax for all the reasons I
think you identified, But is it going to drop by
twenty two percent? So the answer is no, the supply
is dropping faster than to demand, and inevitably that's going
to increase the price just on pure economics. But then
(07:37):
you have the regulatory conflations that come in here, such
as l the LCSF, the Low Carbon Fruel Standard. They're
variable for cap and trade and in this huge unknown
as to where we're going to source the shortfall and
gasoline and honestly, who's going to pay for that? So
(07:59):
you know, the consumer pays for it. Ultimately, but who
pays for the initial acquisition of that gasoline? Is Sacramento
going to turn around to the surviving refineries and say, well,
you have to buy the gasoline from XYZ refineries and
ship it in here. You know who's going to actually
(08:19):
pay for that shortfall? And then there's a whole lot
of problems that appociated with the timing, the logistics. Is
it going to be summer blend? What do you do
about to switch over to winter bland. We're on a
different schedule than the rest of the country for the
seasonal blend switches and the ultimately you know, the low
carbon tool standard. When that hits, that's a different formulation.
So whoever makes this gas at whatever refinery out of
(08:43):
state is going to charge a premium for it. So
the cost will be just hired just to buy the
gasoline to sell to the public.
Speaker 2 (08:51):
All right, Can you hang on for another segment because
I said, people probably are wondering why these refineries are
being Why are the oil companies shutting down so many
of the refineries that we had for so many years.
We're talking with Michael mcchey, he's a professor at USC.
He had the study just a couple of weeks ago
(09:13):
that said, much of the gas price situation here in
California is self inflicted by the state government with their
taxes and fees and regulations and policies and climate change
and all that. That's why we're paying, in some cases
over two bucks a gallon more than other states. And
(09:33):
there's not much evidence of oil company manipulation or price
gouging over the last fifty years. He looked, and now
you have more oil refineries closing and all those other
things happening, and you're looking at gas for six sixty
a gallon a year from now.
Speaker 4 (09:50):
You're listening to John Cobelt on demand from KFI AM
six forty.
Speaker 2 (09:57):
We continue here with Michael mcche a professor USC. He
had the study out that we discussed on the air
with him about two weeks ago that after fifty years
of studying California gas prices, his conclusion is that the
reason we pay so much more than most other states is, well,
(10:18):
we pay a lot more than nearly all the states
is it's self inflicting. It's taxes and fees and policies
and regulations from the state of California. It's not oil
company manipulation or price gouging. He found a little evidence
of that. We're at four dollars and eighty four cents
(10:38):
a gallon today in California for regular The national average
is three sixteen three sixteen, so it's almost almost a
dollar seventy higher. Some states like Tennessee and Mississippi are
paying two sixty nine a gallon. There's twenty one states
paying under three dollars a gallon, and it's infuriating. And
(10:59):
now we're losing more refineries. There are refineries closing here
in Los Angeles that Phillips sixty six owns. There's one
announced this week in Bensia in northern California that's owned
by Valera, and he's estimating that for various reasons, we're
looking to gas in my top six dollars and sixty
(11:21):
cents within the year. Let's get to Michael mcche back on, Michael,
Why are so many refineries closing, especially recently?
Speaker 1 (11:31):
What's going on?
Speaker 2 (11:33):
Obviously it's a I would guess a pure business decision.
No companies would lose money otherwise, is that it? Or
is there something else?
Speaker 3 (11:42):
Well, there's a number of reasons. That's one of them.
I mean, it's UNI formerly recognized that California has the
most stringent regulatory environment in the United States. You know,
for example, we have something like five hundred and eighteen
state agency boards and commissions regulating business practices in California,
twenty five federal, state and local agencies overseeing oil and
(12:05):
gas production and and and are operating costs for refinery?
Is refinery operating costs and based based on the state's
own data, average anywhere from twenty five to thirty percent
higher in California than the rest of the country. So,
you know, taken as a whole, you know, if you're
(12:28):
a refiner, you have the twenty thirty five mandate. Uh
you know which which.
Speaker 1 (12:35):
You know for this for the electric car mandate, right.
Speaker 3 (12:40):
The electric car mandate right in total combustion cars. So
you're sitting there, you know, you have a refinery, and
you're asking yourself, well, g you know, is there any
future in California? And the uh, you know, I think
the overall conclusion is, well, if you own a refinery,
the sun is setting and isn't a future in California.
(13:02):
So as as more and more legislation gets laid on
these refineries, the only natural reaction is to systematically begin
to withdraw from the market. And again, you know, to
I think to a large extent that is that is
political an objective to force the market into the evs.
(13:25):
So you know, there's going to be a cost for
those survivors. But the consequences to California economy. What a
lot of people don't realize is that oil and gas
industry accounts for eight percent of California's three point nine
trillion dollar GDP, and so there's you know, there's an
awful lot of money involved here, and you can't run
(13:47):
a state without petroleum, So there are some significant strategic
implications to the state. There's national security importunity.
Speaker 2 (13:58):
How do you manufacture anything without petroleum? How do you
transport anything without petroleum? I mean, all the products that
need petroleum just to exist when they're manufactured, let alone
running the factory itself. I mean, I just don't understand.
This seems like an economic suicide mission. We're just flying
(14:19):
the plane right onto the side of the mountain.
Speaker 3 (14:22):
Yes, but we're doing so in the name of environmental
justice and clean air, and.
Speaker 1 (14:29):
You know the green you know, the Green New Deal.
Speaker 3 (14:33):
Yeah, right, So so that you know that's true. I mean,
you can't build asphalt without for example, without petroleum. You
can't make concrete without petroleum. There are hundreds of pharmaceutical products,
ingestible products that have a petroleum molecule in them. Uh,
you know, plastics, vinyls, there's pretty much everything is going
(14:56):
to have a pharmaceutical molecule associated with it, or of
petroleum molecule associated with it, or or petroleum is going
to get it from point A to point B. So
it would seem to me that, you know, rather than
pointing the guns at the at the refiners, which as
(15:16):
you mentioned there there is absolutely positively no economic evidence
over a fifty year period of these refiners manipulating prices
or price galgean. Were there periods of exceptional profits, yes?
Are there periods of exceptional losses? Yes, Those are associated
(15:40):
with the ups and downs of the spot oil market
and in demand. You know today right now the state
of California, which its state excise tax, makes more per gallon,
more more per gallon of gas than the gas station
owner and the refiner in terms of profit. So I
(16:02):
think confronted with that type of economic and political environment,
it's only natural that the refiners will begin to wind
down production.
Speaker 2 (16:12):
I've never seen anything more abusive by a government than
the way California treats the oil and gas industry, and,
by extension, all of us because we're paying the bill
for all this. Mike, Michael, it was fascinating to talk
with you again, and I hope we can do this
more often, because you really seem to know more than
(16:34):
anybody else I've talked to about why this is going on,
and I think you're very accurate in pointing out what's
going to be happening in the state.
Speaker 1 (16:42):
So thanks again for talking to you.
Speaker 3 (16:44):
I appreciate that, John, and have a lovely weekend and anytime.
Speaker 2 (16:49):
Okay, Michael, miche USC professor, Oh my god, so much there.
We'll talk to more.
Speaker 4 (16:55):
You're listening to John Cobels on demand from KFI.
Speaker 2 (17:01):
We are on every day from one until four o'clock.
After four o'clock, John Cobelt's Show on demand. You demand
it and you'll get the show anytime in the day
or night anywhere.
Speaker 1 (17:10):
In the world on the iHeartRadio app.
Speaker 2 (17:12):
That's the podcast, so you can catch up on whatever
you missed. I just got to take a minute after
hearing I hope you're paying attention.
Speaker 1 (17:21):
This is real.
Speaker 2 (17:22):
Sometimes they feel like, maybe you think, is it possible.
He's just full of hyperbole, he's exaggerating. He's doing this
for effect. I go, no, You've got a gas pricing
apocalypse coming very soon. It's already here. You're paying forty
four a gallon in California. Other states are in the
(17:44):
two sixties. I mean, it's almost comical. We are likely
going to be in the six sixties.
Speaker 1 (17:53):
Within a year.
Speaker 2 (17:54):
There's several major events happening. There's a California Air Resources
Board sixty five cent low carbon fuel standard increase. That's
a mouthful. It's gonna sixty five cents because of this
new standard from carb And then you have a you
have a gas tax kicking in on the first of July.
(18:15):
And then you have all these refineries closing, two of
them by Phillips sixty six down in the Carson area
and one of them a big one in Benetia. We
are losing about twenty two percent of our gas supply
in a three year period.
Speaker 1 (18:36):
There is six million gallons a day that's going.
Speaker 2 (18:40):
To be missing, and so the price is going to
go up another dollar eighty within a year. If you
heard Michael MChE on the USC Professor and if you're
just joining us, that's the thing you listen to on
the podcast. And I'm looking at you know, Texas is
a two seventy two, Tennessee is two sixty nine, Mississippi
(19:01):
two sixty nine.
Speaker 1 (19:02):
And you want to look at uh.
Speaker 2 (19:05):
High tax states, they're much cheaper. New Jersey is two
ninety six, Massachusetts is two ninety four, New York is
three h nine. I mean, it's got nothing to do
with politics or whether you in a high tax state
or not. California stands by itself and there's there's forty
(19:25):
four states selling gas for three forty or less and
twenty one states selling it for under three dollars. And
Gavin Newsom's approval rating is at thirty three percent, which
is really low. That's lower than anything that Joe Biden
(19:48):
or Donald Trump ever had. Its thirty three percent here
in California. And he's gonna try to sell his wanna
be presidency on six dollars and sixty gas because by
time he's running, that's what it's gonna be. Can you imagine.
I mean, he is insane. There's something wrong with him.
(20:10):
He doesn't even do Usually politicians make drastic changes for
their own survival. He won't even do that. What a
weird cult, this climate cult is. It's had no effect
on the global climate. None. And I told you this,
We told you this ten twenty years ago. All it's
(20:33):
gonna do is drive up the cost in your life
for a gallon of gas, a tank full of gas
all year long, hundreds of dollars, thousands of dollars of
extra money to go wear.
Speaker 1 (20:48):
It's just like six sixty a gallon.
Speaker 2 (20:53):
And there is no way you can force people to
drive electric cars if they don't want to. There's no
way that they can afford them, and that you don't
have an electrical grid to power them. And every product
needs oil and gas, either in the manufacturing or the transportation,
(21:18):
or it's an ingredient in its very existence. I am
completely and utterly baffled by this. No other state's doing this,
No other state has this problem. There's only one state
within sixty cents of US, and that's Hawaii, and of
course you know it's three thousand miles out in the ocean,
so they got big transportation costs. You take the transportation
(21:42):
costs out and there's still thirty five cents behind us.
If this should be the defining issue of the governor's race,
I don't know how it's not. I mean, and a
few years ago, you remember the Yellow vest riots in Paris.
That was over a gas tax increase, and everybody took
(22:04):
to the streets and started setting fires and revolting. And
here we're just gonna pay six sixty a gown. There's
a several polls out and it seems like the uh,
the corpse of California voters, the corpse is starting to
(22:26):
stir a little bit. As I told you Newsome is
down to a thirty three percent approval rating. And now
there seems to be an increasing number of people who
are so fed up with homelessness. Get this, they want
to criminalize homelessness.
Speaker 1 (22:40):
How about that?
Speaker 2 (22:41):
Remember that used to be the comeback from all the
activists and the politicians and the homeless cult. Well, you
just want to criminalize homelessness. Yeah, I was the first
one onboard that train. Well, trade's getting crowded. Politico and
UC Berkeley they had a poll and there's thirty seven
(23:05):
percent who strongly support arresting homeless people if they refuse
to accept shelter, and another twenty four percent somewhat support.
Speaker 1 (23:18):
It, so you got a pretty good majority.
Speaker 2 (23:21):
Sixty one percent are willing to arrest homeless people if
they refuse shelter, and only thirty eight percent opposed the
idea because it's disgusting, it's no way to live. And
by the way, it was discussing ten years ago and
people bought into this idea that you can rehabilitate homeless
(23:45):
people just give them a free million dollar apartment, Like
can you imagine that they actually had been doing that
in Los Angeles for ten years, building million dollar apartments.
And Karen Bass, who's really dumb, she is a dumb clock.
(24:06):
She's continued the policy million dollars for an apartment.
Speaker 1 (24:09):
They're doing it in Santa Monica. Two.
Speaker 2 (24:16):
Interesting This Politico UC Berkeley poll also pulled the state's
political elite, all the insiders who work in Sacramento, and
a higher percentage a pose using law enforcement to detain
(24:36):
people sleeping on sidewalks and other public spaces. That's what
I'm saying, there's a cult running Sacramento whose policy ideas
are far different than what the general public would impose.
If we could be in power. But you have to
(24:57):
stop electing these people. I don't know what to tell you,
but if you want to keep dealing with dangerous, maniacal
vagrants in the streets and you pay six dollars and
sixty cents a gallon for the privilege of driving past
their encampments, you've got to vote differently. You cannot keep
doing this. And I'm guessing people are waking up here.
(25:25):
Most of you know it's a democratic it's establishment almost entirely,
well entirely, it's an entirely democratic establishment. There's no Republicans
in charge anything, and they still are pushing voluntary offers
of shelter. Please, would you go into a drug treatment? Please?
Speaker 1 (25:48):
Would you go into a mental health clinic?
Speaker 2 (25:51):
And crazy people don't know they're crazy and don't care
that they're crazy. Drug addicts don't care that they're drug addicts.
This idea that you can fix people, whether it's the
insanity in the streets or the Menendez brothers, you can't.
Sometimes people are permanently severely damaged and there's nothing you
(26:13):
can do about it. But all this emotional manipulation, all right,
more coming up.
Speaker 4 (26:21):
You're listening to John Cobels on demand from KFI AM
six forty.
Speaker 2 (26:26):
Next hour, two rounds of the Moist Line, and we're
gonna talk with Alex Michaelson, who's going to be a
guest hosting the show on Monday, and we're gonna have
the complete rundown in. Just the most absurd story in
Washington this week is the obsession that Democratic politicians have
(26:48):
with Kilmore Abrego Garcia, the MS thirteen violent gang member
who was deported to El Salvador and put in that
supermax prison. He's now in a different place, and today
a Democratic senator who got to meet him, Chris van
Holland out of Maryland, was blubbering at a press conference. Well, meantime,
(27:14):
Fox News found more evidence that Abrego Garcia is a
very bad guy. Yesterday we found out that he's a
wife beater. Now you're going to find out what he
was involved in as a gang member. You know, they
have certain businesses that they run, these foreign gigs. We'll
(27:36):
tell you all about it. But this is a really
bad guy. You should be so happy he's locked in
a prison in El Salvador.
Speaker 1 (27:44):
Now.
Speaker 2 (27:44):
Yesterday and you know, I got to be honest, and
I think most people feel like this. There's so many
school shootings that people barely notice him anymore. Florida State
University had one Phoenix Ickner twenty years old. He killed
two and wounded six others. And I have noticed over
(28:06):
the years, and maybe this is what made me cynical,
is nearly all these school shooters were made at home.
Like the father and mother, the step parents, They created
the problem, and then once the kid was old enough
to get loose, he was going to get his revenge.
And that's what we have here. His name is Phoenix Ichtor.
(28:32):
That was not his birth name. His birth name was Christian,
but he renamed himself Phoenix. And it turns out when
he was eleven years old, his biological mother and Marie Erickson,
took the boy to Norway in March.
Speaker 1 (28:48):
Of twenty fifteen.
Speaker 2 (28:51):
In violation of the custody agreement that she had with
the dad, Christopher. So here you have another busted family,
broken family, broken marriage, and mom runs.
Speaker 1 (29:05):
Off to Norway.
Speaker 2 (29:07):
She lied to the father saying she was taking him
to South Florida for spring break, and instead for months
he was in Norway, and the dad only found out
when the eleven year old spilled the beans during a
phone call. Sounds like it happened by accident. Yeah, but
mom kidnapped him and eventually came back, and eventually the
(29:31):
mom was arrested. But the kid was troubled already. He
was on medication for several health and mental issues growth
hormone disorder ADHD, and mom kidnapping him caused a lot
of trauma. By time he gets to school at Florida State,
(29:57):
he got thrown out of a political roundtable club.
Speaker 1 (30:01):
They had this.
Speaker 2 (30:02):
Rule, a no Nazis rule, and may die Hi mean
literal Nazis, just people who had white supremacist views that
they were real enthusiastic about. Apparently he espoused so much
white supremacist rhetoric had we had to throw him out
of the club. Send one member in the politics class.
(30:26):
He had disturbing views about black people, far right conspiracy theories.
One guy got into arguments with him, a guy named
Lucas Lucietta, and he remembers thinking this man should not
have access to firearms, but he did because Ickner's stepmom
(30:49):
was a cop with the Leon County Sheriff's Department. She
was a sheriff's deputy, and he made a very clear
that he had guns, and one of the guns he used.
Speaker 1 (31:06):
To shoot the eight people is believed to belong to
his mom.
Speaker 2 (31:14):
But all this started when he was six, and probably
before he was six. It's wait, every time you have
one of these killers, every time you delve for thirty
seconds into the family background and you could see it coming.
The parents create these monsters, all right. When we return Kilmore,
(31:35):
Abrego Garsea. Unbelievable how the media, all the progressives and
politicians are literally crying. Oh, we had a senator today
practically in tears because one illegal alien gang member was
deported to his home country. Oh, but they didn't follow
(31:58):
the proper protocol. Whoa out. It turns out he's a
really bad guy. And we'll get into that two rounds
of the moist. Like Alex Michaelson coming on after three
point thirty. He's going to be filling in for me
on Monday as well. We'll talk to him for a
few minutes and in for Deborah Mark. It's Heather Brooker
live in the KFI twenty four hour newsroom. Hey, you've
been listening to the John Cobalt Show podcast. You can
(32:19):
always hear the show live on KFI AM six forty
from one to four pm every Monday through Friday, and
of course anytime on demand on the iHeartRadio app.
Can't. I am six forty.
Speaker 2 (00:02):
You're listening to the John Cobelt Podcast on the iHeartRadio app.
We've got two rounds of the Moistline coming up next
hour at three twenty and three fifty, and we're on
from one to four and then after four o'clock every day.
If you missed anything, you get the podcast John Cobelt
Show on demand on the iHeart app. Going to get
right into this, we had Michael miche on USC professor
(00:25):
a couple of weeks ago. He had released quite the
study looked at fifty years of California gas prices, and
what he did is he released an analysis saying that
most of the excessive prices that we have to deal
(00:47):
with are from the state government. He said, it's largely
self inflicted. It's taxes, fees, regulations, policies, you know, like
climate change policies that provide a huge burden on oil
and gas refineries, and that there was not much evidence
(01:09):
of any widespread price gouging or price manipulation, which is
what Newsom was always claiming. And we went through that
and it was quite illuminating and confirmed all the suspicions
I'd ever had. And then we find out this week
that Valero is closing one of its refineries up in
northern California, in Benetia, and this is a major blow.
(01:33):
We once had about forty three refineries in California and
now we're down to around eight. And this Benetia complex
produced about eight to nine percent of the gasoline that
we use every every day. It's a big hit and
(01:56):
it's going to mean higher prices. Let's get Michael MChE
on you see, professor, how are you?
Speaker 3 (02:02):
I'm terrific, John, How are you today?
Speaker 1 (02:05):
I'm good.
Speaker 2 (02:06):
You wanted to talk about this closing of the refinery
by Valero up in Benetia. What is the significance of
it to the average person driving home from work today?
Speaker 1 (02:17):
How's it going to affect their lives?
Speaker 3 (02:20):
Well, I'm fred It's going to have a It's going
to affect their lives in a number of ways. Okay,
so it's not just Benetia that's closing. We're also losing
Phillip sixty six here in Los Angeles. So let's take
a look at those. We You know, we've, as you mentioned,
we've lost a whole lot of refineries over the years,
and so today we can refine about one point five
(02:45):
nine one point six million barrels of oil a day,
and we're losing Venetia and Los Angeles, so that's we're
going to lose about oh, eighteen percent of that capacity. However,
(03:07):
if you take a look of from twenty twenty three
to twenty twenty six, the schedule closing for Venetia will
be April twenty twenty six, we will be losing almost
twenty two percent of our capacity a day. Okay, so
what does that mean? That means about six point two
million gallons of gasoline a day. In shortfall, we consume
(03:30):
them in California about thirty three million gallons of gas
a day. We're going to lose about six point two
million gallons of gas a day. We're gonna have a
price increase.
Speaker 1 (03:45):
How are they going to make up that amount of gasoline?
Speaker 3 (03:50):
Well, that's a that's a that's a great question, and
it's a considerable amount to make up. Right, So, we
don't have any pipelines coming into the state, So I
if we had pipelines, we'll just go ahead and pump
gasoline through it. And pumping gas through pipeline is really
really inexpensive and extraordinarily efficient, so we'll have to bring
(04:11):
it into the state either on rail or most likely
on some type of maritime vessel ocean vehicle. So if
we did that, then we'd probably be looking at Washington State,
maybe Alaska as areas of sourcing for us, but it's
(04:33):
questionable whether or not they have the capacity to actually
provided an additional six million gallons of gas a day.
So the other alternative would be looking at Gulf Coast refineries.
In either case, we're going to have to ship the
gasoline in, probably on tankers, and you know, your average
(04:53):
tanker is going to hold about twelve about twelve point
five million gallons and gas. If we're you know, we'll
be we'll be bringing in a tanker every other day
to make up the shortfall.
Speaker 1 (05:07):
Oh jeez.
Speaker 2 (05:08):
And that's going to be collectively much more expensive than
the system we have now.
Speaker 3 (05:14):
It's going to be considerably more expensive. Uh and you
and you already named it contributing factors. So in addition
to this, and believe me, there's there's probably three hundred
people working on this all over the all over the
country trying to figure out the cost of the shutdown
of these three refineries.
Speaker 1 (05:31):
Today.
Speaker 3 (05:32):
But you you know, we have the state excise tax
that goes up all automatically on July first, and that's
probably going to hit close to sixty three cents a gallon.
We're going to have an adjustment and cap and trade
that's going to go up considerably. And then you have
the as you mentioned that the low carbon fuel standard,
which I think the consensus among independent economists is around
(05:54):
sixty to sixty five cents a gallon, So all in all,
it could be as much as a dollar eighty a
gallon if these refineries shut down there and there is
an alternative, economically viable alternative. Remember, whoever makes this gasoline
is going to charge us for this gasoline.
Speaker 1 (06:15):
A dollar eighty on top of the price we're paying.
Speaker 3 (06:18):
Now quite possibly.
Speaker 1 (06:22):
That's six dollars and sixty cents.
Speaker 3 (06:25):
Well yes, but remember the twenty five percent of the
cap and trade is going to help pay for the
California High Speed Rail project, so you know, so you know,
probably and probably the same consultants as Karen Bass hired,
So you know, I mean, it's it's all good. In
the end.
Speaker 2 (06:46):
I think we're going to be paid six sixty a
gallon and that's within a year, right, I mean, all
this stuff is going to happen over the course of
the next year.
Speaker 3 (06:55):
If if if remedial action doesn't take place, or if
there's not an invention from Washington, d C. Then the
price of gas is going to go up, and it's
probably going to grow up considerably, because look, do you
really think reduction people are going to reduce their driving
by twenty two percent in the twelve months?
Speaker 2 (07:13):
Now?
Speaker 3 (07:13):
Do you really think that airlines are going to close?
You know, it's going to slow down? I mean, you know, yeah,
traffic is off at lax for all the reasons I
think you identified, But is it going to drop by
twenty two percent? So the answer is no, the supply
is dropping faster than to demand, and inevitably that's going
to increase the price just on pure economics. But then
(07:37):
you have the regulatory conflations that come in here, such
as l the LCSF, the Low Carbon Fruel Standard. They're
variable for cap and trade and in this huge unknown
as to where we're going to source the shortfall and
gasoline and honestly, who's going to pay for that? So
(07:59):
you know, the consumer pays for it. Ultimately, but who
pays for the initial acquisition of that gasoline? Is Sacramento
going to turn around to the surviving refineries and say, well,
you have to buy the gasoline from XYZ refineries and
ship it in here. You know who's going to actually
(08:19):
pay for that shortfall? And then there's a whole lot
of problems that appociated with the timing, the logistics. Is
it going to be summer blend? What do you do
about to switch over to winter bland. We're on a
different schedule than the rest of the country for the
seasonal blend switches and the ultimately you know, the low
carbon tool standard. When that hits, that's a different formulation.
So whoever makes this gas at whatever refinery out of
(08:43):
state is going to charge a premium for it. So
the cost will be just hired just to buy the
gasoline to sell to the public.
Speaker 2 (08:51):
All right, Can you hang on for another segment because
I said, people probably are wondering why these refineries are
being Why are the oil companies shutting down so many
of the refineries that we had for so many years.
We're talking with Michael mcchey, he's a professor at USC.
He had the study just a couple of weeks ago
(09:13):
that said, much of the gas price situation here in
California is self inflicted by the state government with their
taxes and fees and regulations and policies and climate change
and all that. That's why we're paying, in some cases
over two bucks a gallon more than other states. And
(09:33):
there's not much evidence of oil company manipulation or price
gouging over the last fifty years. He looked, and now
you have more oil refineries closing and all those other
things happening, and you're looking at gas for six sixty
a gallon a year from now.
Speaker 4 (09:50):
You're listening to John Cobelt on demand from KFI AM
six forty.
Speaker 2 (09:57):
We continue here with Michael mcche a professor USC. He
had the study out that we discussed on the air
with him about two weeks ago that after fifty years
of studying California gas prices, his conclusion is that the
reason we pay so much more than most other states is, well,
(10:18):
we pay a lot more than nearly all the states
is it's self inflicting. It's taxes and fees and policies
and regulations from the state of California. It's not oil
company manipulation or price gouging. He found a little evidence
of that. We're at four dollars and eighty four cents
(10:38):
a gallon today in California for regular The national average
is three sixteen three sixteen, so it's almost almost a
dollar seventy higher. Some states like Tennessee and Mississippi are
paying two sixty nine a gallon. There's twenty one states
paying under three dollars a gallon, and it's infuriating. And
(10:59):
now we're losing more refineries. There are refineries closing here
in Los Angeles that Phillips sixty six owns. There's one
announced this week in Bensia in northern California that's owned
by Valera, and he's estimating that for various reasons, we're
looking to gas in my top six dollars and sixty
(11:21):
cents within the year. Let's get to Michael mcche back on, Michael,
Why are so many refineries closing, especially recently?
Speaker 1 (11:31):
What's going on?
Speaker 2 (11:33):
Obviously it's a I would guess a pure business decision.
No companies would lose money otherwise, is that it? Or
is there something else?
Speaker 3 (11:42):
Well, there's a number of reasons. That's one of them.
I mean, it's UNI formerly recognized that California has the
most stringent regulatory environment in the United States. You know,
for example, we have something like five hundred and eighteen
state agency boards and commissions regulating business practices in California,
twenty five federal, state and local agencies overseeing oil and
(12:05):
gas production and and and are operating costs for refinery?
Is refinery operating costs and based based on the state's
own data, average anywhere from twenty five to thirty percent
higher in California than the rest of the country. So,
you know, taken as a whole, you know, if you're
(12:28):
a refiner, you have the twenty thirty five mandate. Uh
you know which which.
Speaker 1 (12:35):
You know for this for the electric car mandate, right.
Speaker 3 (12:40):
The electric car mandate right in total combustion cars. So
you're sitting there, you know, you have a refinery, and
you're asking yourself, well, g you know, is there any
future in California? And the uh, you know, I think
the overall conclusion is, well, if you own a refinery,
the sun is setting and isn't a future in California.
(13:02):
So as as more and more legislation gets laid on
these refineries, the only natural reaction is to systematically begin
to withdraw from the market. And again, you know, to
I think to a large extent that is that is
political an objective to force the market into the evs.
(13:25):
So you know, there's going to be a cost for
those survivors. But the consequences to California economy. What a
lot of people don't realize is that oil and gas
industry accounts for eight percent of California's three point nine
trillion dollar GDP, and so there's you know, there's an
awful lot of money involved here, and you can't run
(13:47):
a state without petroleum, So there are some significant strategic
implications to the state. There's national security importunity.
Speaker 2 (13:58):
How do you manufacture anything without petroleum? How do you
transport anything without petroleum? I mean, all the products that
need petroleum just to exist when they're manufactured, let alone
running the factory itself. I mean, I just don't understand.
This seems like an economic suicide mission. We're just flying
(14:19):
the plane right onto the side of the mountain.
Speaker 3 (14:22):
Yes, but we're doing so in the name of environmental
justice and clean air, and.
Speaker 1 (14:29):
You know the green you know, the Green New Deal.
Speaker 3 (14:33):
Yeah, right, So so that you know that's true. I mean,
you can't build asphalt without for example, without petroleum. You
can't make concrete without petroleum. There are hundreds of pharmaceutical products,
ingestible products that have a petroleum molecule in them. Uh,
you know, plastics, vinyls, there's pretty much everything is going
(14:56):
to have a pharmaceutical molecule associated with it, or of
petroleum molecule associated with it, or or petroleum is going
to get it from point A to point B. So
it would seem to me that, you know, rather than
pointing the guns at the at the refiners, which as
(15:16):
you mentioned there there is absolutely positively no economic evidence
over a fifty year period of these refiners manipulating prices
or price galgean. Were there periods of exceptional profits, yes?
Are there periods of exceptional losses? Yes, Those are associated
(15:40):
with the ups and downs of the spot oil market
and in demand. You know today right now the state
of California, which its state excise tax, makes more per gallon,
more more per gallon of gas than the gas station
owner and the refiner in terms of profit. So I
(16:02):
think confronted with that type of economic and political environment,
it's only natural that the refiners will begin to wind
down production.
Speaker 2 (16:12):
I've never seen anything more abusive by a government than
the way California treats the oil and gas industry, and,
by extension, all of us because we're paying the bill
for all this. Mike, Michael, it was fascinating to talk
with you again, and I hope we can do this
more often, because you really seem to know more than
(16:34):
anybody else I've talked to about why this is going on,
and I think you're very accurate in pointing out what's
going to be happening in the state.
Speaker 1 (16:42):
So thanks again for talking to you.
Speaker 3 (16:44):
I appreciate that, John, and have a lovely weekend and anytime.
Speaker 2 (16:49):
Okay, Michael, miche USC professor, Oh my god, so much there.
We'll talk to more.
Speaker 4 (16:55):
You're listening to John Cobels on demand from KFI.
Speaker 2 (17:01):
We are on every day from one until four o'clock.
After four o'clock, John Cobelt's Show on demand. You demand
it and you'll get the show anytime in the day
or night anywhere.
Speaker 1 (17:10):
In the world on the iHeartRadio app.
Speaker 2 (17:12):
That's the podcast, so you can catch up on whatever
you missed. I just got to take a minute after
hearing I hope you're paying attention.
Speaker 1 (17:21):
This is real.
Speaker 2 (17:22):
Sometimes they feel like, maybe you think, is it possible.
He's just full of hyperbole, he's exaggerating. He's doing this
for effect. I go, no, You've got a gas pricing
apocalypse coming very soon. It's already here. You're paying forty
four a gallon in California. Other states are in the
(17:44):
two sixties. I mean, it's almost comical. We are likely
going to be in the six sixties.
Speaker 1 (17:53):
Within a year.
Speaker 2 (17:54):
There's several major events happening. There's a California Air Resources
Board sixty five cent low carbon fuel standard increase. That's
a mouthful. It's gonna sixty five cents because of this
new standard from carb And then you have a you
have a gas tax kicking in on the first of July.
(18:15):
And then you have all these refineries closing, two of
them by Phillips sixty six down in the Carson area
and one of them a big one in Benetia. We
are losing about twenty two percent of our gas supply
in a three year period.
Speaker 1 (18:36):
There is six million gallons a day that's going.
Speaker 2 (18:40):
To be missing, and so the price is going to
go up another dollar eighty within a year. If you
heard Michael MChE on the USC Professor and if you're
just joining us, that's the thing you listen to on
the podcast. And I'm looking at you know, Texas is
a two seventy two, Tennessee is two sixty nine, Mississippi
(19:01):
two sixty nine.
Speaker 1 (19:02):
And you want to look at uh.
Speaker 2 (19:05):
High tax states, they're much cheaper. New Jersey is two
ninety six, Massachusetts is two ninety four, New York is
three h nine. I mean, it's got nothing to do
with politics or whether you in a high tax state
or not. California stands by itself and there's there's forty
(19:25):
four states selling gas for three forty or less and
twenty one states selling it for under three dollars. And
Gavin Newsom's approval rating is at thirty three percent, which
is really low. That's lower than anything that Joe Biden
(19:48):
or Donald Trump ever had. Its thirty three percent here
in California. And he's gonna try to sell his wanna
be presidency on six dollars and sixty gas because by
time he's running, that's what it's gonna be. Can you imagine.
I mean, he is insane. There's something wrong with him.
(20:10):
He doesn't even do Usually politicians make drastic changes for
their own survival. He won't even do that. What a
weird cult, this climate cult is. It's had no effect
on the global climate. None. And I told you this,
We told you this ten twenty years ago. All it's
(20:33):
gonna do is drive up the cost in your life
for a gallon of gas, a tank full of gas
all year long, hundreds of dollars, thousands of dollars of
extra money to go wear.
Speaker 1 (20:48):
It's just like six sixty a gallon.
Speaker 2 (20:53):
And there is no way you can force people to
drive electric cars if they don't want to. There's no
way that they can afford them, and that you don't
have an electrical grid to power them. And every product
needs oil and gas, either in the manufacturing or the transportation,
(21:18):
or it's an ingredient in its very existence. I am
completely and utterly baffled by this. No other state's doing this,
No other state has this problem. There's only one state
within sixty cents of US, and that's Hawaii, and of
course you know it's three thousand miles out in the ocean,
so they got big transportation costs. You take the transportation
(21:42):
costs out and there's still thirty five cents behind us.
If this should be the defining issue of the governor's race,
I don't know how it's not. I mean, and a
few years ago, you remember the Yellow vest riots in Paris.
That was over a gas tax increase, and everybody took
(22:04):
to the streets and started setting fires and revolting. And
here we're just gonna pay six sixty a gown. There's
a several polls out and it seems like the uh,
the corpse of California voters, the corpse is starting to
(22:26):
stir a little bit. As I told you Newsome is
down to a thirty three percent approval rating. And now
there seems to be an increasing number of people who
are so fed up with homelessness. Get this, they want
to criminalize homelessness.
Speaker 1 (22:40):
How about that?
Speaker 2 (22:41):
Remember that used to be the comeback from all the
activists and the politicians and the homeless cult. Well, you
just want to criminalize homelessness. Yeah, I was the first
one onboard that train. Well, trade's getting crowded. Politico and
UC Berkeley they had a poll and there's thirty seven
(23:05):
percent who strongly support arresting homeless people if they refuse
to accept shelter, and another twenty four percent somewhat support.
Speaker 1 (23:18):
It, so you got a pretty good majority.
Speaker 2 (23:21):
Sixty one percent are willing to arrest homeless people if
they refuse shelter, and only thirty eight percent opposed the
idea because it's disgusting, it's no way to live. And
by the way, it was discussing ten years ago and
people bought into this idea that you can rehabilitate homeless
(23:45):
people just give them a free million dollar apartment, Like
can you imagine that they actually had been doing that
in Los Angeles for ten years, building million dollar apartments.
And Karen Bass, who's really dumb, she is a dumb clock.
(24:06):
She's continued the policy million dollars for an apartment.
Speaker 1 (24:09):
They're doing it in Santa Monica. Two.
Speaker 2 (24:16):
Interesting This Politico UC Berkeley poll also pulled the state's
political elite, all the insiders who work in Sacramento, and
a higher percentage a pose using law enforcement to detain
(24:36):
people sleeping on sidewalks and other public spaces. That's what
I'm saying, there's a cult running Sacramento whose policy ideas
are far different than what the general public would impose.
If we could be in power. But you have to
(24:57):
stop electing these people. I don't know what to tell you,
but if you want to keep dealing with dangerous, maniacal
vagrants in the streets and you pay six dollars and
sixty cents a gallon for the privilege of driving past
their encampments, you've got to vote differently. You cannot keep
doing this. And I'm guessing people are waking up here.
(25:25):
Most of you know it's a democratic it's establishment almost entirely,
well entirely, it's an entirely democratic establishment. There's no Republicans
in charge anything, and they still are pushing voluntary offers
of shelter. Please, would you go into a drug treatment? Please?
Speaker 1 (25:48):
Would you go into a mental health clinic?
Speaker 2 (25:51):
And crazy people don't know they're crazy and don't care
that they're crazy. Drug addicts don't care that they're drug addicts.
This idea that you can fix people, whether it's the
insanity in the streets or the Menendez brothers, you can't.
Sometimes people are permanently severely damaged and there's nothing you
(26:13):
can do about it. But all this emotional manipulation, all right,
more coming up.
Speaker 4 (26:21):
You're listening to John Cobels on demand from KFI AM
six forty.
Speaker 2 (26:26):
Next hour, two rounds of the Moist Line, and we're
gonna talk with Alex Michaelson, who's going to be a
guest hosting the show on Monday, and we're gonna have
the complete rundown in. Just the most absurd story in
Washington this week is the obsession that Democratic politicians have
(26:48):
with Kilmore Abrego Garcia, the MS thirteen violent gang member
who was deported to El Salvador and put in that
supermax prison. He's now in a different place, and today
a Democratic senator who got to meet him, Chris van
Holland out of Maryland, was blubbering at a press conference. Well, meantime,
(27:14):
Fox News found more evidence that Abrego Garcia is a
very bad guy. Yesterday we found out that he's a
wife beater. Now you're going to find out what he
was involved in as a gang member. You know, they
have certain businesses that they run, these foreign gigs. We'll
(27:36):
tell you all about it. But this is a really
bad guy. You should be so happy he's locked in
a prison in El Salvador.
Speaker 1 (27:44):
Now.
Speaker 2 (27:44):
Yesterday and you know, I got to be honest, and
I think most people feel like this. There's so many
school shootings that people barely notice him anymore. Florida State
University had one Phoenix Ickner twenty years old. He killed
two and wounded six others. And I have noticed over
(28:06):
the years, and maybe this is what made me cynical,
is nearly all these school shooters were made at home.
Like the father and mother, the step parents, They created
the problem, and then once the kid was old enough
to get loose, he was going to get his revenge.
And that's what we have here. His name is Phoenix Ichtor.
(28:32):
That was not his birth name. His birth name was Christian,
but he renamed himself Phoenix. And it turns out when
he was eleven years old, his biological mother and Marie Erickson,
took the boy to Norway in March.
Speaker 1 (28:48):
Of twenty fifteen.
Speaker 2 (28:51):
In violation of the custody agreement that she had with
the dad, Christopher. So here you have another busted family,
broken family, broken marriage, and mom runs.
Speaker 1 (29:05):
Off to Norway.
Speaker 2 (29:07):
She lied to the father saying she was taking him
to South Florida for spring break, and instead for months
he was in Norway, and the dad only found out
when the eleven year old spilled the beans during a
phone call. Sounds like it happened by accident. Yeah, but
mom kidnapped him and eventually came back, and eventually the
(29:31):
mom was arrested. But the kid was troubled already. He
was on medication for several health and mental issues growth
hormone disorder ADHD, and mom kidnapping him caused a lot
of trauma. By time he gets to school at Florida State,
(29:57):
he got thrown out of a political roundtable club.
Speaker 1 (30:01):
They had this.
Speaker 2 (30:02):
Rule, a no Nazis rule, and may die Hi mean
literal Nazis, just people who had white supremacist views that
they were real enthusiastic about. Apparently he espoused so much
white supremacist rhetoric had we had to throw him out
of the club. Send one member in the politics class.
(30:26):
He had disturbing views about black people, far right conspiracy theories.
One guy got into arguments with him, a guy named
Lucas Lucietta, and he remembers thinking this man should not
have access to firearms, but he did because Ickner's stepmom
(30:49):
was a cop with the Leon County Sheriff's Department. She
was a sheriff's deputy, and he made a very clear
that he had guns, and one of the guns he used.
Speaker 1 (31:06):
To shoot the eight people is believed to belong to
his mom.
Speaker 2 (31:14):
But all this started when he was six, and probably
before he was six. It's wait, every time you have
one of these killers, every time you delve for thirty
seconds into the family background and you could see it coming.
The parents create these monsters, all right. When we return Kilmore,
(31:35):
Abrego Garsea. Unbelievable how the media, all the progressives and
politicians are literally crying. Oh, we had a senator today
practically in tears because one illegal alien gang member was
deported to his home country. Oh, but they didn't follow
(31:58):
the proper protocol. Whoa out. It turns out he's a
really bad guy. And we'll get into that two rounds
of the moist. Like Alex Michaelson coming on after three
point thirty. He's going to be filling in for me
on Monday as well. We'll talk to him for a
few minutes and in for Deborah Mark. It's Heather Brooker
live in the KFI twenty four hour newsroom. Hey, you've
been listening to the John Cobalt Show podcast. You can
(32:19):
always hear the show live on KFI AM six forty
from one to four pm every Monday through Friday, and
of course anytime on demand on the iHeartRadio app.
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