Tag: Consumer products and services

VW recalls vehicles for tire pressure monitoring malfunction

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FILE – In this Wednesday, Aug. 1, 2018, file photo a logo of the brand Volkswagen on top of a company building is pictured prior to a Volkswagen stock company press conference in Wolfsburg, Germany. Volkswagen is recalling nearly 225,000 vehicles in the U.S., Friday, Nov. 4, 2022, because the tire pressure monitoring systems may not detect air losses in all four tires at the same time. The recall covers certain 2019 Tiguan, Golf Sportswagen, Golf Alltrack, Golf R, and Audi Q3 and A3 vehicles. Also covered are some 2019 and 2020 Jetta, Golf, Atlas and Audi A3 models and some 2020-2021 Atlas Cross Sport and Atlas vehicles. (AP Photo/Michael Sohn, file)

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November 4, 2022
In the 5 states without lotteries, a case of Powerball envy

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WEST POINT, Ga. — Loretta Williams lives in Alabama but drove to Georgia to buy a lottery ticket for a chance at winning the $1.5 billion Powerball jackpot.

She was one of many Alabama ticket-buyers flooding across state lines Thursday. The third-largest lottery prize in U.S. history has people around the country clamoring for a chance to win. But in some of the five states without a lottery, envious bystanders are crossing state lines or sending ticket money across them to friends and family, hoping to get in on the action.

“I think it’s ridiculous that we have to drive to get a lottery ticket,” Williams, 67, said.

Five states — Utah, Nevada, Hawaii, Alaska and Alabama — do not have a lottery. A mix of reasons have kept them away, including objections from conservatives, concerns about the impact on low-income families or a desire not to compete with existing gaming operations.

“I’m pretty sure the people of Florida, Tennessee, Mississippi and Georgia appreciate all of our contributions to their roads, bridges, education system and many other things they spend that money on,” said Democratic legislator Chris England, from Tuscaloosa, Alabama.

Several times weekly, England hears from constituents asking when Alabama will approve a lottery: “Especially when people look on TV and see it’s $1.5 billion dollars.”

In 1999, Alabama voted down a lottery referendum under a mix of opposition from churches and out-of-state gambling interests. Lottery proposals have since stagnated in its legislature, the issue now intertwined with debate over electronic gambling.

In Georgia, a billboard along Interstate 85 beckons motorists to stop at a gas station billing itself as the ”#1 LOTTERY STORE” — 2 miles (3 kilometers) from the Alabama-Georgia line. Alabama car tags outnumbered Georgia ones in the parking lot at times and a line for ticket purchases stretched across the store.

Similarly, anybody in Utah wanting a lottery ticket must drive to Idaho or Wyoming, the two nearest states to the Salt Lake City metro area, where most of the population resides. Lotteries have long been banned in Utah amid stiff opposition to gambling by leaders of The Church of Jesus Christ of Latter-day Saints, known widely as the Mormon church. The faith has its headquarters in Salt Lake City and the majority of lawmakers and more than half of the state’s residents belong to the religion.

In Malad, Idaho, 13 miles (21 kilometers) from the Utah line, KJ’s Kwik Stop is taking advantage of Powerball’s absence in Utah, advertising directly to Utah residents to cross over for tickets. “Just because Utah doesn’t participate in the lottery doesn’t mean you can’t!” their website read recently.

KJ’s sold hundreds of Powerball tickets to Utah residents on Thursday alone, said Cassie Rupp, a Kwik Stop cashier.

In Alaska, when oil prices slumped in recent years, legislative proposals to generate revenue through lottery games, including possibly Powerball, faltered. A 2015 report suggested annual proceeds from a statewide lottery could be around $8 million but cautioned such a lottery could negatively affect charitable gaming activities such as raffles.

Anchorage podcast host Keith Gibbons was in New York earlier this week but forgot to buy a Powerball ticket, even though he didn’t know the size of the jackpot. His response when told it could be $1.5 billion: “I need a ticket.”

He believes even though Alaska is extremely diverse — Anchorage School District students speak more than 100 languages besides English in their homes — offering Powerball would appeal to everyone.

“There’s a little bit of everybody here, and so when you bring things like that, it doesn’t just speak to our culture, it speaks to all cultures because everybody wants money, everybody wants to win, everybody wants to be part of the scene,” Gibbons said.

Not everyone agrees.

Bob Endsley is no fan of Powerball. He says Alaskans shouldn’t have the opportunity to buy tickets. “It’s a waste of money,” said Endsley, also finding fault with the taxes that have to be paid on winnings and the increasing jackpots.

Taking a break from shoveling snow off his sidewalk, the Anchorage man said he once won $10,000 in a Canadian lottery. But it was so long ago, he said, that he doesn’t remember what he did with the windfall other than “paid taxes.”

Hawaii joins Utah as the two states prohibiting all forms of gambling. Measures to establish a Hawaii state lottery or allow casinos are periodically introduced in the Legislature but routinely fail in committee.

Opponents say legalized gambling would disproportionately harm Hawaii’s low-income communities and encourage gambling addictions. Some argue the absence of casinos allows Hawaii to maintain its status as a family-friendly destination. Gambling is popular among Hawaii residents, however, with Las Vegas one of their top vacation destinations.

Wearing a University of Alabama cap, John Jones of Montgomery, Alabama, bought a Powerball ticket on Thursday in Georgia. He voted for an Alabama lottery in 1999 and said he hopes lawmakers there try again. A retired painter, Jones said he usually doesn’t buy a lottery ticket, but decided to take a chance.

He said many Alabamians seem to be doing the same at the Georgia store. “I even met some friends over here,” said Jones, 67.

———

Thiessen reported from Anchorage, Alaska. Associated Press writers Audrey McAvoy in Honolulu, Becky Bohrer in Juneau, Alaska, and Brady McCombs and Sam Metz both in Salt Lake City, Utah, contributed to this report.

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November 4, 2022
Albertsons $4B payout to shareholders amid merger paused

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SEATTLE — A judge in Washington state has temporarily blocked Albertsons from paying a $4 billion dividend to investors as part of the grocery retailer’s proposed merger with rival Kroger.

On Thursday, King County Superior Court Commissioner Henry Judson approved a motion by state Attorney General Bob Ferguson to temporarily block the dividend until the court can more fully consider whether the payment violates antitrust laws, The Seattle Times reported.

The dividend was scheduled to be paid Monday.

The proposed merger would combine two of the nation’s largest grocery chains. Some critics worry that could mean reduced competition, higher food prices and the closure of under-performing locations, including some in Washington state. Albertsons, which owns Safeway, and Kroger, which owns QFC and Fred Meyer, are among the biggest players in Washington.

“Putting the brakes on this $4 billion payment is a huge win for consumers nationwide,” Ferguson said Thursday afternoon on Twitter.

Next Thursday, King County Superior Court Judge Ken Schubert is scheduled to more closely review arguments in the case.

“There is obviously further information and evidence that needs to be presented,” Judson noted.

In a lawsuit filed Tuesday, Ferguson argues the dividend is illegal because it potentially undercuts the ability of Albertsons to keep all its locations open in the several years needed to complete the merger.

Those arguments were echoed by attorneys general in Illinois, California and the District of Columbia, which on Wednesday jointly sued to block the dividend in federal court in Washington, D.C.

Boise, Idaho-based Albertsons said this week that both lawsuits are without merit.

One major concern of the dividend is the potential impact of such a large payment on Albertsons. To win regulatory approval for the merger, Albertsons and Kroger must sell hundreds of locations in areas where they have too much market overlap. So-called divestiture could have a major impact in Seattle and throughout Washington, where Kroger and Albertsons collectively have about 350 locations.

Kroger and Albertsons have agreed to put the divested locations in a standalone company, managed by Albertsons, and then sell them to a competing retailer or retailers as part of the approval process.

However, some antitrust and business experts question whether locations chosen for divesture might already be struggling financially. They worry that a cash-strapped Albertsons might fail to keep all those locations open while it finds a willing buyer and that some divested stores could close, as happened after the 2015 merger between Albertsons and Safeway.

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November 3, 2022
Starbucks reports record Q4 revenue despite China declines

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Pumpkin spice pumped up Starbucks‘ sales in its fiscal fourth quarter, and the company said it’s confident that momentum will carry on into next year.

Starbucks’ revenue rose 3% to a record $8.41 billion in the July-September period. The company said Thursday it saw its highest-ever sales week in September when it introduced its fall drinks. Sales of both hot and cold pumpkin spice drinks jumped 17% during the quarter.

Starbucks shares rose nearly 2% in after-hours trading.

Customers shrugged off higher prices and continued to pay extra for specialty drinks and snacks. Starbucks noted that 60% of the beverages it sells are now customized with flavor shots, foam and other extras.

“There is an affordable luxury to Starbucks that our customer base has been willing to support,” Starbucks’ interim CEO Howard Schultz said Thursday in a conference call with investors. Schultz said the company raised prices around 6% over the last year.

The Seattle coffee giant said its same-store sales —— or sales at locations open at least a year —— were up 7% worldwide in the July-September period. That beat Wall Street’s forecast of a 4.2% increase, according to analysts polled by FactSet.

North American strength offset weakness in China, where pandemic lockdowns are still impacting sales.

Same-store sales jumped 11% in North America, driven by a 10% increase in spending per visit. Same-store sales in China, Starbucks’ second-largest market after the U.S., fell 16%. Still, Starbucks noted that was significantly better than the third quarter, when China’s same-store sales plunged 44%.

“We are encouraged by the early signs of recovery we saw in China,” Schultz said.

Starbucks said it expects global same-store sales will rise between 7% and 9% in its 2023 fiscal year, compared to 8% in the fiscal year that just ended. Schultz said he’s confident the company can meet that goal because of its strong rewards program and its increasingly younger and very loyal customer base. Schultz said more than half of Starbucks’ customers are Millennials or Generation Z.

Starbucks said its net income fell 50% to $878 million in the three-month period that ended Oct. 2 as it invested in store remodels and employee wages. Adjusted for one-time items, the company earned 81 cents per share. That also beat Wall Street’s forecast of 72 cents.

Starbucks has been spending heavily on a plan to boost U.S. store efficiency and employee morale as it tries to head off a growing unionization movement, which it opposes. At least 249 of Starbucks’ 10,000 company-owned U.S. stores have voted to unionize since late last year.

At an investor meeting in September, Starbucks announced it will invest $450 million next year to make its North American stores more efficient and less complex. Employees have struggled with rising demand for customizable cold drinks —— they now make up 76% of U.S. drink sales —— in store kitchens designed for simpler hot drinks.

Sara Trilling, Starbucks’ executive vice president for North America, said the company has already rolled out hand-held cold foamers, new espresso machines and new warming ovens to the majority of its company-owned U.S. stores.

The company also announced a $1 billion investment in employee wages and benefits last fall and added $200 million more for pay, worker training and other benefits in May.

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November 3, 2022
Stellantis: Park older models due to 3 Takata air bag deaths

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DETROIT — Stellantis and the U.S. government are warning owners of 276,000 older vehicles to stop driving them after Takata air bags apparently exploded in three more vehicles, killing the drivers.

The company, formerly Fiat Chrysler, is telling people to stop driving Dodge Magnum wagons, Dodge Challenger and Charger muscle cars and Chrysler 300 sedans from the 2005 through 2010 model years.

Stellantis says it confirmed the driver’s air bag inflators blew apart in two cases, killing two drivers. The company suspects an inflator rupture in another case that also killed a driver. All three deaths were in warm-weather U.S. states and happened in the past seven months in 2010 model year vehicles, the company said.

The fatalities bring the death toll from exploding Takata air bags to at least 32 worldwide, including 23 in the United States.

Takata used ammonium nitrate to create a small explosion to inflate air bags in a crash. But the chemical can become more volatile over time when exposed to moisture in the air and repeated high temperatures. The explosion can blow apart a metal canister and hurl shrapnel into the passenger compartment.

Most of the deaths and about 400 injuries have happened in U.S. states with warmer weather.

The Stellantis vehicles under the “Do Not Drive” warning were all recalled in 2015, and free repairs were available since then. Stellantis said it made numerous attempts to reach owners but the repairs were not made. The recalls affect vehicles in which the air bag inflators have not been replaced as part of the recall.

“Left unrepaired, recalled Takata air bags are increasingly dangerous as the risk of an explosion rises as vehicles age,” Ann Carlson, acting administrator of the National Highway Traffic Safety Administration, said in a statement. “Every day that passes when you don’t get a recalled air bag replaced puts you and your family at greater risk of injury or death.”

On Thursday, NHTSA urged all owners to check to see if their vehicles have an unrepaired Takata air bag recall. Drivers can go to https://www.nhtsa.gov/recalls and key in their 17-digit vehicle identification number to see if they have any open recalls.

The agency said even minor crashes can cause air bags to inflate with the potential for explosions that can kill or hurt people.

Stellantis said any of its customers who aren’t sure if their vehicles have been recalled can call (833) 585-0144.

The company said it has made 210 million attempts to reach owners with recalled Takata air bag inflators, including letters, courier deliveries, emails, text messages, phone calls and home visits. The company has recalled nearly 2 million vehicles with Takata inflators.

In the three recent cases in which people were killed, Stellantis said it made 153 attempts to reach owners.

The company “extends its sympathies to the families and friends of those affected by these incidents,” Stellantis’ statement said.

Potential for the dangerous malfunction led to the largest series of auto recalls in U.S. history, with at least 67 million Takata inflators recalled. The U.S. government says that millions have not been repaired. About 100 million inflators have been recalled worldwide. The exploding air bags sent Takata Corp. of Japan into bankruptcy.

Most of the deaths have been in the U.S., but they also have occurred in Australia and Malaysia.

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November 3, 2022
Ford quality chief retires as CEO tries to boost reliability

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DETROIT — Ford Motor Co.’s top quality executive is retiring as the company continues to struggle with high warranty claims and reliability issues.

Stuart Rowley, chief transformation and quality officer, is leaving after 32 years with the company. He’ll be replaced by Jim Baumbick, who is now vice president of product development operations and internal combustion engine programs, the company said Wednesday.

“Quality is our No. 1 priority as a company, and Jim Baumbick is the right leader to deliver world-class quality and reliability at Ford,” CEO Jim Farley said in a statement.

Farley has complained about quality, warranty claims, recalls and problems with launching new vehicles since his appointment as chief executive two years ago.

At the company’s annual shareholders meeting in May, Farley said the problems are affecting Ford’s financial performance, but also causing pain for customers.

“We’ve made more progress on our launch quality and initial quality, you could see it in the surveys and our ramp-up of production,” Farley said at the meeting. “However, we are not satisfied at all with our quality performance, including our recalls and customer satisfaction efforts, which we need to quickly accelerate. ”

He said fixing the problems will require new talent, which the company has, as well as a culture shift and better processes for engineering, manufacturing and supply chain management. “It’s very frustrating for our customers, and so we’re doing everything we can to accommodate them with the right policies to support them when they do have a problem, and rest assured this management team is completely committed to fixing our gap to competition and return the company to being benchmark,” he said.

Ford’s statement said Josh Halliburton, who was hired in January from survey and data analysis company J.D. Power to be executive director of quality, will report to Baumbick.

The move, Ford said, will integrate quality improvement work in design, engineering, manufacturing and the supply chain.

Rowley will retire Dec. 1 after more than three decades with the automaker, where he held multiple positions including chief operating officer for North America, president of Ford Europe.

The change is among several management moves the company announced Wednesday.

Joy Falotico, president of the Lincoln luxury brand, will retire after 33 years with the company. She’ll be replaced by Dianne Craig, now president of the International Markets Group.

Steven Armstrong, vice president for the India and South America transformation, also will retire, after 35 years with Ford.

The moves come at a time of profound change that Farley is leading at Ford, including separating the company into electric vehicle and internal combustion units.

In August the company let go of 3,000 white collar workers to cut costs and help make the long transition from combustion vehicles to those powered by batteries.

Governments across the globe are pushing to eliminate combustion automobiles to mitigate the impact of climate change. Companies like Ford are orchestrating the wind-down of their combustion businesses over multiple years, even though they are still generating the cash to fund electric vehicle development.

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November 2, 2022
USDA says more than $200M will help meat processors expand

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OMAHA, Neb. — The Agriculture Department announced more than $223 million in grants and loans Wednesday to help small and mid-sized meat processing plants expand to help boost competition in the highly concentrated industry.

The effort is expected to increase cattle and pig slaughter capacity by more than 500,000 head a year and help poultry plants process nearly 34 million more birds while adding more than 1,100 jobs mostly in rural areas where the plants are located.

The Biden administration wants to add meat processing capacity to give farmers and ranchers more options of where to sell the animals they raise while hopefully reducing prices for consumers by increasing competition because the biggest companies now have so much power over pricing. In beef, the top four companies control 85% of the market while the top four firms control 70% of the pork market. The four biggest poultry processors control 54% of that business.

“We’re looking forward to these projects taking hold and creating new opportunity and new choice for producers and consumers,” U.S. Agriculture Secretary Tom Vilsack said.

The USDA’s announcement Wednesday, combined with a trip to Omaha, Nebraska, where Vilsack plans to tour a beef processing plant, comes as President Joe Biden is highlighting his achievements to voters before the Nov. 8 midterm elections. Several of the administration’s recent announcements have targeted rural areas in states that generally support more Republicans than Democrats.

Vilsack said the Greater Omaha Packing company will use its grant to expand beef processing capacity by 700 head per day and add 275 more jobs. The Omaha company is one of the biggest of the 21 grant recipients nationwide that will share $73 million.

Some of the other grants will go to helping Pure Prairie reopen an idle poultry processing plant that will employ hundreds of people in Charles City, Iowa. And the Cutting Edge Meat Company in Leakesville, Mississippi, expects to be able to reduce its current six-month backlog for beef and pork processing by expanding its capacity.

The other $150 million of funding announced Wednesday will go to 12 loan programs that will help independent meat processors continue operating as they work to expand. And applications for additional grants and loans are being accepted now for another round of spending next year.

The big meat processors maintain that supply and demand factors — not industry concentration — drive prices for beef, pork and poultry products. And they say processing capacity has been restrained by the ongoing shortage of people to work at these plants, which are typically in rural areas with small populations.

The worker shortages were highlighted during the pandemic when a number of major meat processing plants had to shut down as the virus tore through them because so many workers became ill or had to quarantine. That contributed to shortages of meat in grocery stores that drove up prices.

The price paid for the animals that are slaughtered has long been a point of contention because even as meat prices soar with inflation and tight capacity in the industry, farmers and ranchers receive a relatively small share of the profits. Federal data show that for every dollar spent on food, the share that went to ranchers and farmers dropped from 35 cents in the 1970s to 14 cents recently.

Agricultural economists have said that smaller processing plants also might have a hard time competing with the major meat companies because they are far less efficient than the big plants run by companies like Tyson, Smithfield Foods, Cargill, JBS, Hormel and Purdue Farms.

In addition to these loans and grants, the White House has also adjusted administrative rules to make it easier for farmers and ranchers to report concerns or sue over anticompetitive behavior. Officials are also planning new rules to label meat as a U.S. product to differentiate it from meat raised in other countries.

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November 2, 2022
Tesla robot walks, waves, but doesn’t show off complex tasks

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DETROIT — An early prototype of Tesla Inc.’s proposed Optimus humanoid robot slowly and awkwardly walked onto a stage, turned, and waved to a cheering crowd at the company’s artificial intelligence event Friday.

But the basic tasks by the robot with exposed wires and electronics — as well as a later, next generation version that had to be carried onstage by three men — was a long way from CEO Elon Musk’s vision of a human-like robot that can change the world.

Musk told the crowd, many of whom might be hired by Tesla, that the robot can do much more than the audience saw Friday. He said it is also delicate and “we just didn’t want it to fall on its face.”

Musk suggested that the problem with flashy robot demonstrations is that the robots are “missing a brain” and don’t have the intelligence to navigate themselves, but he gave little evidence Friday that Optimus was any more intelligent than robots developed by other companies and researchers.

The demo didn’t impress AI researcher Filip Piekniewski, who tweeted it was “next level cringeworthy” and a “complete and utter scam.” He said it would be “good to test falling, as this thing will be falling a lot.”

“None of this is cutting edge,” tweeted robotics expert Cynthia Yeung. “Hire some PhDs and go to some robotics conferences @Tesla.”

Yeung also questioned why Tesla opted for its robot to have a human-like hand with five fingers, noting “there’s a reason why” warehouse robots developed by startup firms use pinchers with two or three fingers.

Musk said that Friday night was the first time the early robot walked onstage without a tether. Tesla’s goal, he said, is to make an “extremely capable” robot in high volumes — possibly millions of them — at a cost that could be less than a car, that he guessed would be less than $20,000.

Tesla showed a video of the robot, which uses artificial intelligence that Tesla is testing in its “Full Self-Driving” vehicles, carrying boxes and placing a metal bar into what appeared to be a factory machine. But there was no live demonstration of the robot completing the tasks.

Employees told the crowd in Palo Alto, California, as well as those watching via livestream, that they have been working on Optimus for six to eight months. People can probably buy an Optimus “within three to five years,” Musk said.

Employees said Optimus robots would have four fingers and a thumb with a tendon-like system so they could have the dexterity of humans.

The robot is backed by giant artificial intelligence computers that track millions of video frames from “Full Self-Driving” autos. Similar computers would be used to teach tasks to the robots, they said.

Experts in the robotics field were skeptical that Tesla is anywhere near close to rolling out legions of human-like home robots that can do the “useful things” Musk wants them to do – say, make dinner, mow the lawn, keep watch on an aging grandmother.

“When you’re trying to develop a robot that is both affordable and useful, a humanoid kind of shape and size is not necessarily the best way,” said Tom Ryden, executive director of the nonprofit startup incubator Mass Robotics.

Tesla isn’t the first car company to experiment with humanoid robots.

Honda more than two decades ago unveiled Asimo, which resembled a life-size space suit and was shown in a carefully-orchestrated demonstration to be able to pour liquid into a cup. Hyundai also owns a collection of humanoid and animal-like robots through its 2021 acquisition of robotics firm Boston Dynamics. Ford has partnered with Oregon startup Agility Robotics, which makes robots with two legs and two arms that can walk and lift packages.

Ryden said carmakers’ research into humanoid robotics can potentially lead to machines that can walk, climb and get over obstacles, but impressive demos of the past haven’t led to an “actual use scenario” that lives up to the hype.

“There’s a lot of learning that they’re getting from understanding the way humanoids function,” he said. “But in terms of directly having a humanoid as a product, I’m not sure that that’s going to be coming out anytime soon.”

Critics also said years ago that Musk and Tesla wouldn’t be able to build a profitable new car company that used batteries for power rather than gasoline.

Tesla is testing “Full Self-Driving” vehicles on public roads, but they have to be monitored by selected owners who must be ready to intervene at all times. The company says it has about 160,000 vehicles equipped with the test software on the road today.

Critics have said the Teslas, which rely on cameras and powerful computers to drive by themselves, don’t have enough sensors to drive safely. Tesla’s less capable Autopilot driver-assist system, with the same camera sensors, is under investigation by U.S. safety regulators for braking for no reason and repeatedly running into emergency vehicles with flashing lights parked along freeways.

In 2019, Musk promised a fleet of autonomous robotaxis would be in use by the end of 2020. They are still being tested.

————

O’Brien reported from Providence, Rhode Island.

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October 1, 2022
Newsom relaxes refinery rules as California gas prices soar

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SACRAMENTO, Calif. — California Gov. Gavin Newsom on Friday announced that oil refineries could start selling more polluting winter-blend gasoline ahead of schedule to ease soaring fuel prices, directly contradicting his own goals for reducing climate pollutants.

The average cost of a gallon of gas was $6.30 in California on Friday, far above the national average of $3.80, according to AAA. Newsom administration officials said the difference between state prices and the national average has never been larger.

The Democratic governor also called on state lawmakers to pass a new tax on oil company profits and return the money to California taxpayers. Lawmakers don’t return to the Capitol until January, Newsom’s office provided few details on the proposal.

“They’re ripping you off,” he said of the oil industry in a video posted to Twitter.

Oil industry representatives said it is state regulations that cause higher prices in California than the rest of the country. The summer blend of gasoline that refineries are required by law to produce in the hotter months costs more money to make but is designed to limit pollutants like smog. Most refineries can’t switch to the winter blend until November.

Switching from the summer to winter blend would likely save consumers 15 to 20 cents per gallon, said Doug Shupe, a spokesman for the Southern California Automobile Club, an affiliate of AAA. Gas prices in Los Angeles are close to breaking a record of $6.46 set in June, he said.

“If these prices go up to $7 a gallon, a 15-cent drop is not really going to mean much to drivers,” Shupe said.

Prices are spiking in part due to limited supply because some oil refineries are offline due to routine maintenance or other problems, he said. The California Air Resources Board, which regulates refineries, said high prices could also be due to part to a refinery fire and Hurricane Ian.

It’s the latest spat between Newsom and the oil industry, which holds political and economic sway in California despite the state’s aggressive climate policies. But Newsom’s dual actions Friday also illustrate the complicated reality Newsom faces as he tries to wean the state off oil and gas while responding to economic reality.

Earlier this year, for example, Newsom’s administration turned to generators and power plants that run on fossil fuels to help avoid rolling power blackouts during a heat wave.

By urging air regulators to let oil companies switch to a winter blend earlier, Newsom is acknowledging that state rules play a role in prices, said Kara Greene, a spokeswoman for the Western States Petroleum Association.

Refineries typically perform maintenance in the spring or fall as they prepare to switch fuel blends, she said. It will take time for refineries to prepare the winter blend, and Newsom’s order may have little immediate effect, she said. If Newsom truly wanted to lower prices, he could suspend the state’s gas tax or relax other regulations, she said.

“It’s a conscious decision to try and put the responsibility back on the oil industry,” she said.

Newsom said he expected the relaxation of refinery rules to increase supplies by 5% to 10% because refiners have already started to produce and store the gas.

“Any impacts on air quality caused by this action are expected to be minimal and outweighed by the public interest in temporarily relaxing” the limits, the air board said in a statement.

Starting in January, oil companies will be required to disclose their monthly profits to the state under legislation Newsom recently signed. Consumer Watchdog called on Newsom earlier this week to call a special legislative session to approve a tax on those profits.

Jamie Court, the group’s president, said he applauded Newsom’s efforts to deal with “an industry that’s out of control.”

Democratic leaders in the state Legislature said a windfall tax on oil profits deserves “strong consideration,” while Republicans said Newsom should immediately suspend the state gas tax to provide relief.

Major oil companies saw record profits this summer, and the price of crude oil has dropped since the end of the summer.

The California Energy Commission on Friday wrote a letter to executives of five major oil companies asking why prices rose so dramatically, what actions the state could take to lower prices and why refinery inventory levels have dropped.

Greene, of the petroleum association, said California regulations raise the price of oil by just under $1 in California, but other observers say its lower. Court, of Consumer Watchdog, says its around 60 cents, while Severin Borenstein, an energy economist with the University of California, Berkeley, says its closer to 70 cents.

Borenstein has also identified an unexplained surcharge that he says has caused Californians billions of dollars since 2015.

Newsom in 2019 directed the state attorney general to look into whether oil companies were overcharging Californians. Attorney General Rob Bonta has said his office is still investigating.

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October 1, 2022