Hiding in Plain Sight in the Name of ‘Transparency’

Something's highly unusual about this 'unusual transaction' in California

Like so many others in California, I’ve been bugged about the recent spike in prices at the gas pump...

To put this in perspective, this was what I paid the other day at a nearby Costco for premium. Trust me when I say: It was a bargain.

San Diego Costco

I don’t need to go to Costco to save a few pennies on gas, but when I’m saving $0.50to $1 per gallon, that starts to add up, and the principled “value-oriented” part of me kicks in.

Now, before we go further, let me make something clear...

I love living in California, I’m a centrist, and if you want to hurl your anti-California or anti-centrist rhetoric my way, don’t waste your time.

If that’s a problem, please don’t read further and have a great day... and I hope to see you when we return to our regularly scheduled programming.

If you’re OK with that, read on...

Gas prices here in California are always higher than everywhere else…

But in the past few weeks they’ve gone nuts.

Even as gas prices have been rising around the country, the gap this time between here and everywhere else is egregious.

To put this in perspective, AAA says the average price for a gallon nationwide today is $3.838. In California, it’s $5.840...

In San Diego, where I live, my trusty Gas Buddy app shows a $1 spread of $6.09 to $7.09 for a gallon of premium, depending on the station. (That itself is crazy, but I digress…)

When $6 a gallon a few days ago and $6.09 today is a bargain, I say, ‘Houston, we have a problem.”

I checked the local press, or what’s left of it, and I didn’t see anything compelling.

Then I did a quick Google search and there it was – something merely mentioned in press reports...

Last week the California Energy Commission’s Division of Petroleum Market Oversight – created by the California Gas Price Gouging & Transparency Law – sent a letter to the governor and legislature saying that the rise in prices appears to have been driven, in part, by “an unusual transaction on the gasoline spot market...”

The statement went on to say (emphasis added)...

An unusual transaction took place on the California spot market on Friday, September 15, that caused the market price of gasoline to increase by nearly $0.50 per gallon, which ultimately gets passed onto consumers. Following engagement with market participants, we observed spot market prices stabilize, fall briefly, and then increase again; the consequences of this volatility will be felt at the pump for some time. It is not an exaggeration to say that one trade likely cost California drivers many millions of dollars at the pump.

Let’s get this straight…

• “An unusual transaction...”?

• “Following engagement with market participants...”?

• “It’s not an exaggeration to say...”?

I may no longer formally be a journalist, but I like to think I still have a few of the instincts that served me so well…

Those instincts are screaming: Wait, what?

Real transparency, as promised by the law, isn’t merely saying there is an “unusual market transaction”…

Giving detail on what that transaction involved would be.

And if the government doesn’t know, somebody does.

Maybe I’m reading more into it than there really is. I very well may be too cynical for my own good. After all, I’m merely opining here, not reporting…

But opining is sometimes how good reporting starts…

And I’m old enough to remember a little more than 20 years ago when California’s “power crisis” was traced to a bunch of unusual transactions involving energy trading by Enron.

Back then, Enron created an artificial crisis via artificial electricity shortages... using such techniques known as “megawatt laundering,” and strategies internally called such things as “death star” and “get shorty.”

Just as the energy shortages then didn’t make any sense, neither does do the spiraling gas prices today.

And the only thing we know is that there was an “unusual market transaction” in the country’s most populated state, which also ranks as one of the world’s largest economies.

I mentioned the Enron connection on social media and someone I know joked..

This is an interesting thought, you dinosaur.

He’s right, and dinosaurs have a great sense of history.

Somehow, this “unusual market transaction” has fallen through the cracks of national press coverage.

At the risk of sounding like a conspiracy theorist, what I know is this: There’s more to this story and somebody will figure it out... and it’s likely to be a doozy.

As always, if you like what you’ve read here, feel free to click the heart below.

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DISCLAIMER: This is solely my opinion based on my observations and interpretations of events, based on published facts and filings, and should not be construed as personal investment advice. (Because it isn’t!)

Feel free to contact me at herbgreenberg@substack.com. You can follow me on Twitter and Threads @herbgreenberg.