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Speaker 1: I am six forty. You're listening to the John Cobelt

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Speaker 1: podcast on the iHeartRadio app That is the John co

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Speaker 1: Belt Show. And today is the last day that we're

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Speaker 1: going to be on from one until four o'clock. The

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Speaker 1: big timeslot switch is tomorrow, and Debor and I are

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Speaker 1: moving to the three to six o'clock timeslot, and everybody's

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Speaker 1: coming with us, Ray and Eric, and it'll be the

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Speaker 1: same show, just later in the afternoon, which is where

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Speaker 1: we used to be for a long long time. So

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Speaker 1: now we're going to be back there, and so make

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Speaker 1: a note of that tomorrow. Also make a note that

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Speaker 1: in the noon to three slot on KFI, there's going

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Speaker 1: to be a brand new show with two familiar voices,

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Speaker 1: Michael Monks and Chris Merrill. Michael has been with the

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Speaker 1: KFI News department the last couple of years. He's hosted

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Speaker 1: talk shows for years in Cincinnati, and Chris Merrill has

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Speaker 1: been on the air on KFI for years filling in

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Speaker 1: working weekends. He also has had a lot of experience

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Speaker 1: doing talk shows in San Diego and Phoenix. So they're

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Speaker 1: going to team up together from noon to three. We're

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Speaker 1: going to be on from three to six, Conway is

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Speaker 1: moving back to his home from six to ten o'clock

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Speaker 1: and everything will be in order. So that's tomorrow. Now

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Speaker 1: we're going to jump right in here because something one

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Speaker 1: of the things I wanted to do with the show

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Speaker 1: is figure things out early and warn you, not that

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Speaker 1: anybody follows my instructions, but we told you early last

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Speaker 1: year that huge gas price increases were coming, and we

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Speaker 1: had on USC Professor Michael Miche, and we've also had

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Speaker 1: on a former Valero manager named Mike Maurice Mike Ariza,

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Speaker 1: and the two of them are rejoining us now, Professor

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Speaker 1: Mache and Mike Ariza, because you probably have noticed that

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Speaker 1: prices here in southern California have gone up forty cents

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Speaker 1: a gallon for gas in just two weeks. I have

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Speaker 1: a service station about a half mile from my house,

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Speaker 1: and it is remarkably on the average price all the time.

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Speaker 1: Like the current average price is four point fifty eight

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Speaker 1: a gallon in California, and my station's at four fifty nine,

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Speaker 1: and two weeks ago the average price was four eighteen

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Speaker 1: and my station was four nineteen. So I have a

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Speaker 1: perfectly average gas station in my neighborhood, and I noticed

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Speaker 1: over two weeks that it had shot up to four

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Speaker 1: to fifty nine a gallon. It's like, what's this And

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Speaker 1: then I remembered, oh, I know what this is. But

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Speaker 1: this is because we talked about it for quite a while.

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Speaker 1: Two refineries have closed in the last few months, one

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Speaker 1: run by Phillips sixty six in the Carson Wilmington area

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Speaker 1: and another in Benetia in northern California operated by Valero

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Speaker 1: that just closed in January. They're writing off a billion

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Speaker 1: dollars in losses. They chose to close it rather than

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Speaker 1: deal with Gavin Newsom's absurd and costly climate change regulations.

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Speaker 1: And that's why they're closing it. It's Newsome's climate change regulations.

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Speaker 1: And now that they closed it, there are two fewer

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Speaker 1: refineries for gasoline in the state than there were just

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Speaker 1: six months ago. And let's get to USC Professor Michael

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Speaker 1: miche On. Welcome, Michael, good to be here.

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Speaker 2: John, how are you today?

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Speaker 1: I'm good. Mike Reza, former Valero manager, I'm here all right,

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Speaker 1: Mike and Mike, all right, it's good talking with you both.

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Speaker 1: Michael miche Let me let me start with you. Is

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Speaker 1: this it is this? What you predicted months and months ago,

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Speaker 1: is finally kicking in now with the closure of the

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Speaker 1: Benetia refinery by Villero. Is this the big price increase.

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Speaker 2: I'm afraid it is, and it's coming, and it would

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Speaker 2: be a lot worse had it not been for the

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Speaker 2: energy policies of honestly, President Trump, we've had a tremendous

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Speaker 2: increase in crude oil production, which has dropped the price

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Speaker 2: of crude oil by as much as twenty percent. So

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Speaker 2: our prices would be considerably higher today had it not

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Speaker 2: been for the drop in crude oil prices. But they're

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Speaker 2: drifting up, and when you make the adjustment, they're within

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Speaker 2: the range that I predicted in my May fifth study.

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Speaker 2: So they're just coming right up, and we can expect

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Speaker 2: them to go up another, oh, anywhere from fifty three

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Speaker 2: cents to a dollar fifteen a gallon by the end

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Speaker 2: of the year.

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Speaker 1: Another fifty cents to a dollar fifteen.

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Speaker 2: Well, yeah, this is just the beginning, because, as Michael

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Speaker 2: Reasa will tell you, we're moving into the summer blend season,

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Speaker 2: and the summer blend is more costly to produce, and

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Speaker 2: therefore we always have a price increase in the summer,

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Speaker 2: not only do we have a demand for gasoline increases

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Speaker 2: in the summer people have taken vacation, of course, but

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Speaker 2: also we have the infinite summer blend. And then in California,

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Speaker 2: we have an increase in the state excise tax that

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Speaker 2: occurs automatically on July first, and that'll go up another

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Speaker 2: couple cents a gallon. And then also you have the

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Speaker 2: infinitous cap and trade, which, if the regulations are actually adopted,

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Speaker 2: that will have a significant increase in gasoline prices. So

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Speaker 2: you know, as we've said, brace Rampact, because this is

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Speaker 2: just the beginning.

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Speaker 1: I'm looking at Triple A's state by state gas price

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Speaker 1: web page and at forty states, forty out of fifty

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Speaker 1: are below three dollars a gallon, and California is sitting

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Speaker 1: at the top at four point fifty nine. Yeah, at

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Speaker 1: forty states are in the twos.

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Speaker 2: Yes, and it's been going up considerably. So a lot

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Speaker 2: of times people will just look at the absolute difference

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Speaker 2: between the national average and the California average and maybe

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Speaker 2: compute the percentage difference. But we do something differently. We

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Speaker 2: calculate a special ratio between those numbers, and what's happened

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Speaker 2: is if you go back even six seven months ago,

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Speaker 2: the ratio was like one point four one point four

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Speaker 2: to four. That is, California prices were one point four

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Speaker 2: four times that of the national average. In the last

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Speaker 2: few weeks, since December sixteenth, they've creeped up from one

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Speaker 2: point five to five to one point five to two

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Speaker 2: to one point five to four, and today they're one

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Speaker 2: point five to seven and there is absolutely nothing in

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Speaker 2: the horizon that would suggest that they will be coming down.

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Speaker 1: So basically, we're paying fifty seven percent higher for gas.

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Speaker 2: That is correct. Michael, don't forget, But John, John don't forget. Okay,

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Speaker 2: let's follow the logic. That large portion of that is

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Speaker 2: California taxes and regulatory costs, of which cap and Trade

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Speaker 2: is one and that's about twenty three cents a gallon,

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Speaker 2: of which twenty five percent of the Cap and Trade

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Speaker 2: receipts go to the California High Speed Rail project. So

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Speaker 2: you know where's the money being spent.

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Speaker 1: And that's a beautiful train. I saw it blowed buy

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Speaker 1: me today, that California high Speed Rail.

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Speaker 2: That was just the right thing. I mean, Johnny goes

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Speaker 2: so fast. I'm surprise you saw.

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Speaker 1: I know, I blinked. I just got just a glimpse

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Speaker 1: of it, just for a brief second. Yeah, Mike, a

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Speaker 1: reason you've worked for Valero. Can you explain to people

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Speaker 1: why this? First of all, why did the refinery close

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Speaker 1: in Benetia? Can you explain it in terms that the

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Speaker 1: average person would understand.

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Speaker 3: Oh, regulations and fines, ridiculous environmental regulation into it kept

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Speaker 3: getting stricter and stricter and stricter. And then Valero invested

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Speaker 3: six or seven hundred million dollars to reduce their SO

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Speaker 3: two in particular emissions and then they got slapped an

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Speaker 3: eighty two million dollar fine. In addition, the law was

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Speaker 3: passed signed by the governor where the refineries had to

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Speaker 3: hold up more storage with their gasoline tankage and then

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Speaker 3: build more storage. So that's millions upon millions of dollars

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Speaker 3: more that they would have to spend and holding the

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Speaker 3: gasoline up to increase the storage. And they basically just said,

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Speaker 3: like you said at the beginning of the show, one

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Speaker 3: point one billion dollar loss, this isn't going to change,

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Speaker 3: so they just shut her down.

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Speaker 1: I mean that that is a shocking amount of money

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Speaker 1: that a major company is willing to write off and

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Speaker 1: just because of onerous regulations. I mean, it just would

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Speaker 1: seem at the point where a company is saying, hey,

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Speaker 1: we're going to write off a billion dollars in losses

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Speaker 1: because of your regulations and we're going to shut down

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Speaker 1: our business, then every legislator and the governor ought to say, Okay,

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Speaker 1: this has gone way, way, way too far. We've got

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Speaker 1: to scrap these regulations. We've got to completely dismantle this

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Speaker 1: regulation system here.

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Speaker 3: Yeah, and they kept talking, you know, they just continued important.

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Speaker 3: That's the we had concerns, the three of us, me

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Speaker 3: and the professor in stan Ellis the assemblement that we

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Speaker 3: were reaching the point of the docks our port's ability

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Speaker 3: to offload these tankers that are coming from overseas, which

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Speaker 3: is a big vulnerability and risk in itself. And I

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Speaker 3: think what we're seeing now is with Valero dropping off

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Speaker 3: at four point three to four point five million gallons

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Speaker 3: a day of production is gone, I think we're starting

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Speaker 3: to see that where the supply is really starting to

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Speaker 3: get constrained. And it's a simple supply and demand. You know,

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Speaker 3: normally we have about fourteen days of supply. You get

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Speaker 3: down to about twelve days of supply on handed gasoline

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Speaker 3: and the price will start to go through the roof.

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Speaker 3: And I think that's what we're seeing up here in

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Speaker 3: northern California, and probably because of the specific specific fact

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Speaker 3: that Beneatha is in northern cal California, we seeing the

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Speaker 3: prices in a lot of areas around here going up

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Speaker 3: even higher. I've got text from farmers about the red diesel,

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Speaker 3: how it's shooting through the roof. Once said, thank god

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Speaker 3: I bought our diesel for harvest. You were right. You know,

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Speaker 3: it's starting to shoot up now. The gasoline some of

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Speaker 3: the stations uppears up sixty to seventy cents a gallon,

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Speaker 3: I think specifically because of Valo's location in the state.

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Speaker 3: And then you know, then there's the military. Travis supplied

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Speaker 3: seven hundred produced seven hundred thousand gallons a day, give

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Speaker 3: or take one hundred thousand gallons of jet every day

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Speaker 3: of jet fuel, and they were Travis Air Force Base's

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Speaker 3: primary supply of jet fuel. Travis Air Force Base is

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Speaker 3: one of the biggest military Airlift Command bases in the world.

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Speaker 3: So now there's that situation where our defense is compromised.

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Speaker 3: The military's compromised on all forty bases plus Vegas plus

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Speaker 3: Reno and Phoenix.

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Speaker 1: Can you can you guys hang on? I want to

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Speaker 1: talk some more about this. We have We have Michael

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Speaker 1: msche USC professor Mike Arisa. He's an oil industry expert

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Speaker 1: former formerly worked with Valero. And the big news that

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Speaker 1: happened just a couple of weeks ago is Valero closed

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Speaker 1: a huge refinery that they had in Benetia and Phillip

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Speaker 1: sixty six already closed one here in the South Los

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Speaker 1: Angeles area and Wilmington, Carson and it has caused the

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Speaker 1: price gas just in California to shoot up forty cents

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Speaker 1: in two weeks, forty cents. This has not affected any

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Speaker 1: other state in the Union, because no other state has

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Speaker 1: the insane regulations that forced Valera to close it's Benetia

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Speaker 1: refinery plant. Nobody else is paying anywhere near this the

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Speaker 1: lowest price in the country. Oklahoma is down as an

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Speaker 1: average to twenty nine a gallon to twenty nine, and

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Speaker 1: we are sitting as an average four fifty nine. And

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Speaker 1: as Mike Resa said, Northern California, you've got their pay

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Speaker 1: sixty to seventy cents more than that, they're well into

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Speaker 1: the fives. We'll continue with Michael MChE Mike Ariza.

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Speaker 4: You're listening to John Cobelt on demand from KFI AM

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Speaker 4: six forty.

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Speaker 1: We have no more money, so I don't know why

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Speaker 1: you're looking at at the radio. There's no more money.

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Speaker 1: There's no special secret code word or anything to text. Sorry,

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Speaker 1: we're broke. We're going to Oh, I should point out.

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Speaker 1: I got to keep reminding myself. Tomorrow we move from

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Speaker 1: three to six o'clock. That's the new showtime, which is

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Speaker 1: our old showtime three pm to six pm. Starting tomorrow,

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Speaker 1: all of us are moving over Conway. He's going back

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Speaker 1: to his old neighborhood six to ten pm. There's a

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Speaker 1: new show that's going to debut between noon and three,

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Speaker 1: but familiar KFI voices kept it all in the family.

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Speaker 1: Michael Monks from KFI News, Chris Merrill from KFI Weekends

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Speaker 1: and KFI fill in and they are team up to

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Speaker 1: do noon to three. I'm going to be on Debora's

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Speaker 1: going to be here three to six, Conway six to ten.

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Speaker 1: All right, you got that. Now let's continue with Michael

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Speaker 1: MChE us professor Michael Reza, oil industry expert, formerly a

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Speaker 1: manager with Valero, and we're talking about the did you

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Speaker 1: notice forty cent increase in the price of gas just

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Speaker 1: in the last two weeks. This is directly connected to

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Speaker 1: Valero having to close their Benetia refinery a few weeks

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Speaker 1: ago because the regulation in California from Gavin Newsom's climate

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Speaker 1: policies too expensive to cumbersome, and they're writing off over

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Speaker 1: a billion dollars in losses because of it and shutting

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Speaker 1: it down. Michael msche we are down to tell me

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Speaker 1: how many refineries we used to have in California and

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Speaker 1: how many we have now.

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Speaker 2: Well, about thirty years ago we had over forty refineries

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Speaker 2: in California and today we now have seven, and this

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Speaker 2: time last year we have we had nine. We lost

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Speaker 2: Philip sixty six, and then we lost Valero. Now a

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Speaker 2: lot of people thought, well, Valero announced that they would

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Speaker 2: shut down in April of twenty twenty six, but most

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Speaker 2: of us that follow the industry and understand the production schedules,

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Speaker 2: like Michael Reza does and I do, and I study

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Speaker 2: the math of it, said no, there's no way they're

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Speaker 2: going to They're going to stay in production through April

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Speaker 2: and uh, and so they are shut down. THERMOI imaging

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Speaker 2: of the plant the refinery shows that they're moving things

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Speaker 2: into moth balls. Now, as a consequence of that, the

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Speaker 2: main pipeline that we talked about, John, you had that

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Speaker 2: on your show several months ago. That's now that's now

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Speaker 2: shut down.

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Speaker 1: So it's not the big pipeline. Yeah, that that brings line. Yeah,

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Speaker 1: that brings oil to the refineries.

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Speaker 2: It brings well from the refinery to the refineries from

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Speaker 2: the fields in Kerrent County and San Joaquin Valley. Uh.

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Speaker 2: That is called the San Papulo Day pipeline. Are more

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Speaker 2: colloquially as a Crimson pipeline because Crimson owns it. That

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Speaker 2: pipeline was in jeopardy shutting down. The state legislature was

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Speaker 2: made aware of it, the government was made aware of it.

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Speaker 2: People like me who published made people aware of it.

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Speaker 2: But it's now shut down. So the problem now is.

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Speaker 1: Due to a lack of oil. There's like a lack

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Speaker 1: of oil to create the pressure for.

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Speaker 3: It to work well.

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Speaker 2: Right, So what happened is is as the refineries were

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Speaker 2: leaving the state, it's a death spiral, right, It's a

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Speaker 2: never ending type dance. The refineries leave the state. In state,

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Speaker 2: oil production coming from on shore declines. All right, Now,

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Speaker 2: when you're producing oil, your only customers the refinery. I

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Speaker 2: mean you and I are the end customer in a

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Speaker 2: long supply chain, but the refinery is the buyer of oil.

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Speaker 2: So when you have a refinery go offline and in

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Speaker 2: this case leave the state represent ending over twenty percent

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Speaker 2: of the in state gasoline production, where did the producers

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Speaker 2: of oil send their product? And so as the refineries

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Speaker 2: were shutting down, and as in state production was shutting down,

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Speaker 2: in state production has fallmed by like eighty five percent

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Speaker 2: over the last ten years, about twenty years the pipeline collapsed.

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Speaker 2: Now that that pipeline going north and south is dry,

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Speaker 2: we now have producers in Kerrn County and I spoke

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Speaker 2: with one on Wednesday, So this is absolute first hand

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Speaker 2: information using trucks to move their oil from the oil

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Speaker 2: field to the nearest pipeline pumping station that is open.

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Speaker 2: And so as a result of this, there's about another

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Speaker 2: one hundred or so trucks a day tankers on the

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Speaker 2: road moving oil, and will be more than that come

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Speaker 2: I would say June or July because the ports are packed.

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Speaker 2: So we're going to add somewhere between one hundred and

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Speaker 2: one hundred and fifty more trucks a day on Interstate

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Speaker 2: I five moving oil tax crazy, pipeline forming down. Meanwhile,

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Speaker 2: all right, meanwhile, right, so you have this thing called

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Speaker 2: SB two thirty seven that the governor signed, which allows

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Speaker 2: for ten thousand new permits two thousand new permits a

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Speaker 2: year in basically Kerrent County. But the problem is nobody

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Speaker 2: can get the oil. Even if you have the oil,

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Speaker 2: you can't get it into a pipeline because the pipeline's

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Speaker 2: broken down. So what we're seeing is, out of two

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Speaker 2: thousand new permits that have been permitted, we've got maybe

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Speaker 2: maybe ten percent of those right now have been applied

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Speaker 2: for and granted. But that doesn't mean people are going

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Speaker 2: to drill because the price of oil's fallen and current

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Speaker 2: county oils far more expensive. The cheaper oil and by

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Speaker 2: the way, the more environment are friendly oil is offshore

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Speaker 2: in Santa Barbara Channel. So this is kind of complex,

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Speaker 2: but there aren't people who figured it out unfortunately, you know,

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Speaker 2: the governor and the policy makers. Maybe there are just

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Speaker 2: a few steps behind us.

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Speaker 1: Well, I mean, they've been actively, actively trying to destroy

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Speaker 1: the oil industry and they have succeeded to a great extent.

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Speaker 1: Mike alrisa, Yes, you're going to say something.

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Speaker 3: Yes. And the thing is, when the professors started to

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Speaker 3: our price is back in twenty twenty three, two refiners

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Speaker 3: are put on a renewable diesel. They so three hundred

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Speaker 3: and fifty thousand barrels of the accrudal processing stopped. There

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Speaker 3: no jet fuel, no gasoline, no propane from those refineries.

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Speaker 3: Now we've got Wilmington and now Volero's taken our ability

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Speaker 3: to get product in basically over the edge. And this

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Speaker 3: is assuming we have no problems with The governor is

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Speaker 3: so disingenuous when it looks at us and says, you know,

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Speaker 3: well we got, we got, We're taken care of it. Well,

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Speaker 3: you can't control storms, you can't control refinery unscheduled down times.

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Speaker 3: You can't control problems into poor to Los Angeles or

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Speaker 3: any other thing like that, or some type of incident

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Speaker 3: occurs abroad with Taiwan or something. He has no control

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Speaker 3: over those. He is totally disingenuous. And the prices that

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Speaker 3: the professor quotes, you know, if things remain stable, you know,

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Speaker 3: will hold. But you know, my concern is that if

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Speaker 3: we have a couple of different events that we have

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Speaker 3: no control of, nor does the governor. We could see

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Speaker 3: prices shoot through the roof.

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Speaker 1: All right, can you can you guys stand for another segment?

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Speaker 3: Sure you got the time?

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Speaker 1: All right, USC Professor Michael MChE and you heard just

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Speaker 1: speaking Mike Arisa. He's an oil industry expert, also formerly

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Speaker 1: with Valero, and this is this is serious. You may

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Speaker 1: have known this gas price is up forty since in

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Speaker 1: the last two weeks. This is only the beginning. Valero

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Speaker 1: closed down the Benetia refinery just a few weeks ago.

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Speaker 1: Phillip sixty six shut down the Wilmington refiery I think

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Speaker 1: was back in October. We used to have over forty

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Speaker 1: fineries in the state. We're down to seven, and our

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Speaker 1: prices went up forty cents to four point fifty nine

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Speaker 1: a gallon on average, and forty other states are in

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Speaker 1: the twos. Will continue when we come back.

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Speaker 4: You're listening to John Cobels on demand from KFI AM

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Speaker 4: six forty.

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Speaker 1: John Cobelt Show. We're on. We're gone a long time.

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Speaker 1: Did something happen? Was there some emergency weather service thing?

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Speaker 1: All right, well, I shouldn't waste any more time. We're

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Speaker 1: talking with Professor Michael mcche from USC, Mike Ariza, oil

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Speaker 1: industry expert, former Valero manager, and we've been discussing the

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Speaker 1: forty cent increase in the price of California gas because

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Speaker 1: another refineries closed in in northern California, the Benetia refinery

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Speaker 1: that Valero has been running. They're taking over a one

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Speaker 1: billion dollar write off on that. Phillips sixty six closed

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Speaker 1: down there Wilmington refinery just a few months ago, and

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Speaker 1: that's twenty percent of the refinery production for gasoline in

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Speaker 1: this state. Prices now have shot up forty cents a

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Speaker 1: gallon four point fifty nine is the average around the

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Speaker 1: state for regular as opposed to the rest of the

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Speaker 1: country where the average is about two ninety one. In fact,

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Speaker 1: forty states are below the two dollars mark, be below

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Speaker 1: the three dollar mark in the twos. Let's get Michael

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Speaker 1: and Mike back on. Mike Aresa, tell me, I have

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Speaker 1: seen that Bloomberg is reporting that because of this refinery shutdown,

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Speaker 1: we are going to be importing gasoline from the Bahamas,

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Speaker 1: or at least the ship has to leave from the Bahamas.

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Speaker 1: Can you because this seems crazy because I'm looking at

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Speaker 1: the map, and they're going to have to They're going

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Speaker 1: to have to sail thousands of miles, you know, to

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Speaker 1: the south and then come up the coast to California.

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Speaker 1: Tell me about this, well.

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Speaker 3: Yeah, and that adds to the cost of you know,

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Speaker 3: the ship. That adds to the price. The professor would

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Speaker 3: actually know a little more about that than me that

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Speaker 3: I actually ran the refineries. But my concern right now

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Speaker 3: is the fact that with Valero down in the situation

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Speaker 3: we're in, if you go back to the seventies, when

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Speaker 3: we had forty one refineries, as the professor toldy earlier,

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Speaker 3: when the crewd all came back, we had the ability

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Speaker 3: to get ourselves out of trouble. We could started refining

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Speaker 3: it in. Now we're down to seven. If we end

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Speaker 3: up with a shortage caused by any one of the

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Speaker 3: reasons that I had mentioned before, moderate or severe shortage,

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Speaker 3: we won't have the refineries to get our cells out

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Speaker 3: of it. That's where we're in an unprecedented situation in

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Speaker 3: the history of any state in this country. We don't

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Speaker 3: have pipelines coming in. We're dependent on ships, including that

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Speaker 3: one that you're just talking about, bringing us fuel. If

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Speaker 3: that's interrupted at all. We will in very short order

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Speaker 3: have shortages, Prices will increase substantially more, and we won't

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Speaker 3: be able to get our cells out of it. That

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Speaker 3: is a really unprecedented danger. That's the situation we're in

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Speaker 3: right now.

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Speaker 1: Yeah, and then Newsome will blame whatever the latest disruption

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Speaker 1: was for the entire price increase and not address all

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Speaker 1: the terrible things that have that he's done to the

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Speaker 1: oil industry that led to this point where we have

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Speaker 1: no bargin for error.

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Speaker 3: Yeah, this is one hundred percent California government induced. It's

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Speaker 3: just like the professor was saying, you know, Trump got

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Speaker 3: Trump came in. Drill baby, drill Crudel. Prices are down

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Speaker 3: twenty percent. That's where we've been enjoying, you know, relatively

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Speaker 3: low prices that we've had, but now that's all fallen

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Speaker 3: by the wayside with the shortages, then the two refineries

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Speaker 3: going into their maintenance period, the summer blend kicking in. Yeah,

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Speaker 3: prices are going to keep going up. And then if

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Speaker 3: we have any real shortages of any kind, which we

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Speaker 3: are extremely vulnerable to that more than we've ever been

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Speaker 3: in our history, than prices are going to shoot up

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Speaker 3: a lot higher. Potentially we'll shoot up a lot higher

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Speaker 3: and we'll experience shortages and it will be nothing like

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Speaker 3: what we saw in the seventies, and we will be

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Speaker 3: the only state in the Union, along with Reno, Nevada,

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Speaker 3: and Phoenix, that will be experiencing those shortages.

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Speaker 1: Price Michael say, you were going to say something, Yeah.

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Speaker 2: I think when we take a look at what's happening

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Speaker 2: with these refineries and these imports of gas from So

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Speaker 2: here's what happens. Gasoline is made in the United States

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Speaker 2: along the Gulf Coast. We have major refinery assets along

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Speaker 2: the Gulf Coast, right Gulf of America coast, and then

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Speaker 2: that gasoline or that feedstock is then put on a

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Speaker 2: tanker and sent to the Bahamas. In the Bahamas, it's

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Speaker 2: mixed with additives, so it's blended. It's been shipped to

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Speaker 2: California as an import gasoline. Okay, Now, it's anywhere from

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Speaker 2: fifteen to eighteen days transit time at sea. Plus you

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Speaker 2: have to go through the Panama Canal and you have

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Speaker 2: to pay the tariff to go through there. So it

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Speaker 2: increases the cost of gasoline considerably. And California began doing

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Speaker 2: that and has reached an all time high. Uh, just recently.

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Speaker 2: So we're importing more and more gasoline from from the

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Speaker 2: Bahamas that way.

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Speaker 1: Okay, but the Bahamas is the Bahamas obviously doesn't have

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Speaker 1: an oil supply. They're getting these tankers from elsewhere in

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Speaker 1: the world.

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00:25:19,800 --> 00:25:24,360
Speaker 2: Correct, These these gasolines coming in on foreign flag tankers.

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00:25:24,640 --> 00:25:28,760
Speaker 2: The Bahamas does have a refinery, and so they don't

435
00:25:28,760 --> 00:25:31,240
Speaker 2: have crude oil, but they take a lot of obviously

436
00:25:31,280 --> 00:25:35,199
Speaker 2: a lot of imported uh crude stock from South America

437
00:25:35,240 --> 00:25:36,120
Speaker 2: and places like that.

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00:25:36,280 --> 00:25:39,639
Speaker 1: Wait wait, wait, so now we have to take the

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00:25:39,760 --> 00:25:43,679
Speaker 1: refined gasoline from the Bahamas from their refineries because we

440
00:25:43,760 --> 00:25:44,760
Speaker 1: closed most of ours.

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00:25:46,040 --> 00:25:51,120
Speaker 2: That's that is correct, and it's reached all time high. Yeah,

442
00:25:51,440 --> 00:25:53,879
Speaker 2: all right. And the reason why we do that is

443
00:25:54,200 --> 00:25:57,160
Speaker 2: for a number of reasons. One is there's a there's

444
00:25:57,400 --> 00:26:01,080
Speaker 2: a law called the Jones Act, and it goes back

445
00:26:01,119 --> 00:26:04,280
Speaker 2: one hundred years and it has everything to do with

446
00:26:04,359 --> 00:26:08,880
Speaker 2: the ships that you use to move cargo between US ports.

447
00:26:09,560 --> 00:26:14,560
Speaker 2: Now there's only about sixty of those ships available. In contrast,

448
00:26:14,600 --> 00:26:19,080
Speaker 2: there's over seven thousand tankers available. And so what happens

449
00:26:19,160 --> 00:26:25,160
Speaker 2: is these producers will use foreign flag hankers. They'll pick

450
00:26:25,240 --> 00:26:29,080
Speaker 2: up the gasoline, blendstock or feedstock from the Gulf Coast,

451
00:26:29,560 --> 00:26:32,560
Speaker 2: bring it to the Bahamas, blend it into the California product,

452
00:26:33,080 --> 00:26:35,240
Speaker 2: and then ship it to California. But of course it's

453
00:26:35,280 --> 00:26:38,920
Speaker 2: coming from a ma Hamian refinery on a flooring flagship,

454
00:26:39,040 --> 00:26:43,760
Speaker 2: So it's an export and an import for US, and

455
00:26:43,840 --> 00:26:46,919
Speaker 2: so that adds to considerably. Ask the price of gasoline

456
00:26:46,960 --> 00:26:50,200
Speaker 2: along with the gasoline is coming in from South Korea. Now,

457
00:26:50,240 --> 00:26:53,439
Speaker 2: the interesting part of the South Korean gasoline is twenty

458
00:26:53,480 --> 00:26:56,639
Speaker 2: to forty percent of that gas is made from oil

459
00:26:57,160 --> 00:27:03,400
Speaker 2: that comes from the United States. So in some fantasy

460
00:27:03,480 --> 00:27:07,840
Speaker 2: world in Sacramento, the use of all these tankers and

461
00:27:08,560 --> 00:27:13,760
Speaker 2: high dependency on foreign producers is in the best interests

462
00:27:13,800 --> 00:27:17,199
Speaker 2: of the state. You can't see it, you know, it's

463
00:27:17,480 --> 00:27:19,360
Speaker 2: kind of unbelievable, but that well, just what.

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00:27:19,359 --> 00:27:23,080
Speaker 1: I'd understand about this is is he's all in on

465
00:27:23,119 --> 00:27:29,600
Speaker 1: this climate policy, except his policy is not reducing any

466
00:27:29,600 --> 00:27:34,280
Speaker 1: greenhouse gases. It's just increasing them. It's increasing them because

467
00:27:34,320 --> 00:27:38,680
Speaker 1: now we've got all these tankers moving around the world,

468
00:27:39,200 --> 00:27:41,520
Speaker 1: you know, from South Korea to the Bahamas. To hear

469
00:27:41,600 --> 00:27:44,399
Speaker 1: this is crazy, and.

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00:27:44,240 --> 00:27:47,639
Speaker 3: These refineries that don't have anywhere near our these refineries

471
00:27:47,640 --> 00:27:50,560
Speaker 3: that don't have anywhere near our environmental standards in California.

472
00:27:52,200 --> 00:27:55,720
Speaker 2: No, if you take a look at the refineries in Iraq, Okay,

473
00:27:55,960 --> 00:27:58,480
Speaker 2: oil producing fields in Iraq, and then the refineries in

474
00:27:58,800 --> 00:28:04,000
Speaker 2: these other countries, they are they're greenhouse omissions are as

475
00:28:04,080 --> 00:28:06,359
Speaker 2: much as ten times greater than that of any any

476
00:28:06,400 --> 00:28:10,000
Speaker 2: refinery in California or ork oral producer in the state.

477
00:28:12,000 --> 00:28:16,040
Speaker 1: Guys, I'm sorry, I got I got a run. We're

478
00:28:16,080 --> 00:28:18,359
Speaker 1: just running away behind. Thank you for coming on and

479
00:28:18,359 --> 00:28:22,760
Speaker 1: we'll talk again. USC professor Michael Machet and oil industry

480
00:28:22,760 --> 00:28:25,280
Speaker 1: expert Mike Ariza, thank you for coming on with us.

481
00:28:26,240 --> 00:28:27,040
Speaker 2: Always great to be here.

482
00:28:27,200 --> 00:28:29,600
Speaker 1: To John okay, and we'll continue this soon.

483
00:28:30,560 --> 00:28:35,960
Speaker 4: You're listening to John Cobelt on demand from KFI AM sixty.

484
00:28:36,240 --> 00:28:39,040
Speaker 1: John Cobel Show, k if I AM six forty more

485
00:28:39,400 --> 00:28:42,920
Speaker 1: Stimulating talk Radio. One of the big issues that we

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00:28:43,000 --> 00:28:47,440
Speaker 1: have in California is that you cannot get anybody in

487
00:28:47,480 --> 00:28:50,360
Speaker 1: the legislature or the governor or in the mayor's office

488
00:28:50,720 --> 00:28:54,480
Speaker 1: to talk publicly and honestly about all the corruption and

489
00:28:54,520 --> 00:28:57,400
Speaker 1: all the stupid things they've done. And there's a barrier,

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00:28:57,840 --> 00:29:00,479
Speaker 1: and we're going to play you a series of audio

491
00:29:00,520 --> 00:29:04,040
Speaker 1: clips to demonstrate how the barrier works. Because there was

492
00:29:04,080 --> 00:29:08,240
Speaker 1: an incident at a press conference involving Gavin Newsom and

493
00:29:08,280 --> 00:29:10,440
Speaker 1: his wife last week, and we played part of it.

494
00:29:10,840 --> 00:29:14,280
Speaker 1: And now the reporter who I guess instigated the incident,

495
00:29:14,360 --> 00:29:19,520
Speaker 1: Ashley Zavala, has put out her own video explaining to

496
00:29:19,760 --> 00:29:25,800
Speaker 1: a lot of really ignorant people how the reporters cover

497
00:29:25,960 --> 00:29:30,280
Speaker 1: press conferences. Apparently, you know, we had a press conference

498
00:29:30,520 --> 00:29:33,360
Speaker 1: that was supposed to be only about planned parenthood and

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00:29:33,400 --> 00:29:36,120
Speaker 1: the ninety million dollars that Newsom was going to blow

500
00:29:36,120 --> 00:29:41,320
Speaker 1: on planned parenthood, and people didn't understand why the reporters

501
00:29:41,320 --> 00:29:45,160
Speaker 1: were asking questions about other issues. So you're going to

502
00:29:45,240 --> 00:29:47,600
Speaker 1: hear and this is central to what's wrong, why the

503
00:29:47,640 --> 00:29:51,040
Speaker 1: whole state's so out of control. We just spent the

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00:29:51,120 --> 00:29:55,600
Speaker 1: last almost an hour with Michael Msche who's a professor

505
00:29:55,600 --> 00:29:59,240
Speaker 1: at USC, mikeah Reza, who is an oil industry expert,

506
00:29:59,560 --> 00:30:01,520
Speaker 1: and they were telling us why they price the gas

507
00:30:01,520 --> 00:30:04,360
Speaker 1: has gone up forty cents in two weeks. I can't

508
00:30:04,600 --> 00:30:08,080
Speaker 1: tell you how abusive these policies are, how destructive these

509
00:30:08,080 --> 00:30:12,040
Speaker 1: policies are by Gavin Newsom, and see people don't know

510
00:30:12,080 --> 00:30:13,960
Speaker 1: it because they don't You can't live in the other

511
00:30:14,000 --> 00:30:18,280
Speaker 1: fifty states. But the rest of the country is paying

512
00:30:18,280 --> 00:30:21,400
Speaker 1: on average two ninety two a gallon, and we're paying

513
00:30:22,160 --> 00:30:28,000
Speaker 1: We're paying four point fifty nine. Ed Newsom has posted

514
00:30:28,080 --> 00:30:31,920
Speaker 1: online just an hour ago, and he's got this obnoxious

515
00:30:31,960 --> 00:30:35,440
Speaker 1: photo of him and a windbreaker and a cap baseball

516
00:30:35,480 --> 00:30:38,960
Speaker 1: cap looking out at a stormy sky with his arms

517
00:30:39,000 --> 00:30:42,520
Speaker 1: folded like he's staring down a storm. We're staring into

518
00:30:42,560 --> 00:30:45,880
Speaker 1: the wind. And he wrote, or somebody wrote for him,

519
00:30:46,160 --> 00:30:49,280
Speaker 1: I refuse to sit back and watch the climate crisis

520
00:30:49,320 --> 00:30:54,400
Speaker 1: destroy our planet. California will keep showing up, pushing forward

521
00:30:54,600 --> 00:30:58,080
Speaker 1: and proving that a safer, more sustainable world is possible.

522
00:30:59,040 --> 00:31:04,280
Speaker 1: And he looks like this dramatic crusader standing alone in

523
00:31:04,320 --> 00:31:07,800
Speaker 1: the wind, looking at the storm. He alone will save

524
00:31:07,880 --> 00:31:11,640
Speaker 1: us from the climate crisis. There is no climate crisis.

525
00:31:12,280 --> 00:31:17,040
Speaker 1: All we have here is gas prices that on average

526
00:31:17,360 --> 00:31:21,040
Speaker 1: are about a dollar seventy more a gallon than anywhere

527
00:31:21,080 --> 00:31:25,680
Speaker 1: else in the country, almost entirely from taxes and regulations.

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00:31:25,840 --> 00:31:27,320
Speaker 1: That's all we got out of this. And we have

529
00:31:27,360 --> 00:31:30,560
Speaker 1: electricity prices that are double the rest of the country.

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00:31:31,640 --> 00:31:35,360
Speaker 1: There is no reduction in greenhouse gases. There is no

531
00:31:35,600 --> 00:31:39,719
Speaker 1: lowering of the atmospheric temperature. All we're doing is paying thousands,

532
00:31:39,880 --> 00:31:45,720
Speaker 1: literally thousands of dollars of your income every year for nonsense,

533
00:31:46,240 --> 00:31:49,360
Speaker 1: for complete, utter nonsense. In fact, a portion of the

534
00:31:49,880 --> 00:31:53,320
Speaker 1: gas taxes and the climate taxes are going to that

535
00:31:53,600 --> 00:31:59,200
Speaker 1: stupid high speed rail fiasco. This should not be tolerated.

536
00:31:59,560 --> 00:32:05,800
Speaker 1: This is absurd. There the whole system is stealing thousands

537
00:32:05,800 --> 00:32:08,920
Speaker 1: of dollars of your money for absolutely no reason. Now

538
00:32:08,920 --> 00:32:12,000
Speaker 1: we have tanker we have tankers coming in from the

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00:32:12,000 --> 00:32:18,440
Speaker 1: Bahamas with oil that were oil that was originally a

540
00:32:18,520 --> 00:32:24,440
Speaker 1: drilled for in Iraq, in Saudi Arabia, and it gets

541
00:32:24,480 --> 00:32:27,600
Speaker 1: refined in the Bahamas because all our refineries have shut down.

542
00:32:28,160 --> 00:32:31,880
Speaker 1: We've lost We've lost like thirty six out of forty

543
00:32:31,880 --> 00:32:36,920
Speaker 1: three refineries are the major pipeline for oil in the

544
00:32:36,960 --> 00:32:39,240
Speaker 1: state has shut down because of the lack of oil.

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00:32:39,280 --> 00:32:45,000
Speaker 1: There's no pressure in it. All right, we come back.

546
00:32:46,080 --> 00:32:51,440
Speaker 1: We'll show you how how even even Newsom's dopey wife,

547
00:32:51,520 --> 00:32:56,080
Speaker 1: Jennifer Newsom, tries to interfere with the press, trying to

548
00:32:56,160 --> 00:32:59,560
Speaker 1: squeeze out some truth. Deborah mark Lyde and the KFI

549
00:32:59,600 --> 00:33:02,120
Speaker 1: twenty four our newsroom. Hey, you've been listening to the

550
00:33:02,200 --> 00:33:04,880
Speaker 1: John Cobalt Show podcast. You can always hear the show

551
00:33:04,920 --> 00:33:07,680
Speaker 1: live on KFI Am six forty from one to four

552
00:33:07,720 --> 00:33:10,560
Speaker 1: pm every Monday through Friday, and of course, anytime on

553
00:33:10,680 --> 00:33:12,560
Speaker 1: demand on the iHeartRadio app