Markets can be messy. They are chaotic. A free-market economy consists of millions of people making trillions of decisions, every day, every one of which is in one way or an economic decision, whether that decision is to buy a candy bar, a house – or a tank of gasoline. All of those decisions involve tradeoffs, which is why a politician will ask you, “What do you want?” But an economist will ask you, “What do you want more?”
Markets also, if left alone, usually get things right in the end. For folks who know this, it’s frustrating to see politicians, like, say, the impeccably coiffed Governor Gavin Newsom of California, proposing that the state meddle in things he knows nothing about. He’s pushing a new requirement that gas and oil companies should be subjected to a minimum storage requirement to avoid shortages and the concomitant price spikes. Chevron executive Andy Walz is reacting in a missive that eviscerates the Governor’s proposal.
On Tuesday, a Chevron executive shared a letter condemning the proposal, calling it “inaccurate” and saying it included “flawed arguments.”
Andy Walz was recently appointed president of Chevron’s Downstream, Midstream & Chemicals division. It’s a role that puts him in charge of directing the company’s worldwide manufacturing, marketing, lubricants, chemicals and additives businesses, along with Chevron’s shipping, pipeline, power, and trading units.
“The California government remains unique in its focus on marketplace interference with negative effects on consumers resulting in the highest U.S. gasoline prices,” wrote Walz. “California has investigated the industry numerous times for price gouging and come up with no evidence or charges.”
Walz, who previously held the position of president of Chevron’s Americas Products, noted that the bill would shift maintenance safety standards to bureaucrats who lack refining experience.
That’s what leftist politicians do, Mr. Walz – shift things from people who know what they’re doing to bureaucrats who do not.
California’s famous for this kind of thing. The once and former Golden State has the highest gasoline and diesel prices in the country, thanks in part to many stupid ideas foisted on the industry by Sacramento, including the mandate that the companies produce a different gasoline blend for seemingly every day of the week. But Gavin Newsom, when he isn’t meeting up with friends for lunch at the French Laundry, just seems to want to keep doubling down on stupid. He’s down on cheap gas, he’s down on reliable electricity, and he’s not too fond of the First Amendment, although at least he is currently on the receiving end of a beatdown on that front:
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The letter Andy Walz wrote to Governor Newsom can be seen in its entirety on X:
NEW: Chevron sends letter to California lawmakers ahead of Senate vote on Newsom’s oil supply proposal.
“The political posturing that has characterized these proceedings must stop, including baseless and frankly ridiculous claims that the industry is engaging in price gouging.” pic.twitter.com/FbEgbLXzp5
— Ashley Zavala (@ZavalaA) October 9, 2024
With attachments:
The letter, written by President of Chevron’s Americas Products Andy Walz, also included these attachments, picking apart the California Energy Commission’s infographics used throughout legislative process. pic.twitter.com/CXL3KMXEWK
— Ashley Zavala (@ZavalaA) October 9, 2024
This is the best bit from the letter:
“The political posturing that has characterized these proceedings must stop, including baseless and frankly ridiculous claims that the industry is engaging in price gouging.”
Good luck with that. Baseless and frankly ridiculous claims are Gavin Newsom’s stock in trade; it’s what he does. And being the governor, he’s got a platform. But Walz is right; if the state of California starts meddling even more with the supplies of the fuels on which every modern economy runs, it won’t end well. It never does. Government never helps a market, it only harms markets, and as I’ve always said, markets, if left alone, usually get things right.
That “if left alone” is the key. It’s what Newsom can’t do. It’s not in his nature.
