up the pieces
For the umptyleventh time, how BigOil fixes gasoline prices
Charter Cable franchise update  Cesar Chavez Celebration  UPS Strike avoided
Expanded from the Sunday, 3-14-2004, Daily
Sparks, Nev., Tribune
3-18-2004 Comstock Chronicle
Time stands still for this column when someone dies. For that past two weeks, the passing of Sparks activist Rosalie Beasley and former Gov. Mike O'Callaghan bumped a bunch of pocketbook items you need to know.
Last Sunday's column has been turned into one-stop shopping for the man historian Guy Louis Rocha rightly termed "Nevada's last great governor." Thereat, you will be able to access statewide coverage and memories of Mike from all points of the compass. Thanks to everyone who responded with their thoughts after reading last Sunday's installment. Keep them coming and I'll use them in the future.
Now, down to business.
OILOGOPOLY UPDATE. No less than Sen. Harry Reid, D-Nev., Rep. Shelley Berkley, D-Las Vegas, and Gov. Dudley Do-Right hisself have jumped into the game of wallpapering the world with press releases expressing their concern over skyrocketing retail gasoline prices. Their timidity is typical, their myopia eyeopening, worthy of Nevada Attorney General Brian Sandoval's whitewashing of the issue last year.
Such guarded language is understandable. If you want a future in follytix, it's not wise to fool with BigOil. Witness the presence of His Royal Accidency Petrol the Second in The White House.
Sen. Reid's announced suspicion of "suspicious" activity is well founded. Alas and alack, few but me apparently understand why retail gas prices jump on any bad news and ratchet down oh-so-slowly thereafter, if at all. The evidence may be found at the web archives of this column which go back more than a decade.
First and foremost, the answer lies with the fact that oil companies can afford better lawyers than anyone else. They've actually come up with a clever method of destroying independent competitors which has passed legal muster against most challenges. They set up gerrymandered "price zones" to squeeze independent retailers. This explains why one ARCO will be selling for less than another just a few miles away.
Some Las Vegas retailers sued over the practice in federal court a few years ago. A Reagan-appointed judge refused to force ARCO to reveal its price zone maps. He actually bought the company argument that doing so would disclose precious trade secrets! Amen.
Another part of the problem lies with antiquated antitrust laws. Busting somebody for conspiring to fix prices requires evidence of conspiracy. The skulduggerous seven sisters of BigOil need only look at the signs in front of any ARCO station to find out how to set prices on any day. No direct communication, no conspiracy, no case.
Since the other branded majors tacitly decided to let ARCO lead the market starting about 1982 when ARCO eliminated its credit card program, most west coast independents have either gone out of business or affiliated with one of the biggies. Most of the indies in California have disappeared.
My analysis answers the magic question: How can west coast gas prices be the highest in the U.S. when 93% of west coast crude comes from California and Alaska? (The other seven percent comes mostly from Canada and a trickle from Asia. All of the above is non-OPEC oil.)
The price zone legal strategy has so far even survived a loss in a California court. Using it allows the majors manipulate prices to rise quickly, fall slowly and squeeze independent retailers out of business in the process.
The fix for the price fixing lies with a little old fashioned big government trust-busting and new legislation making the current clever price fixing method illegal. Tighter regulation and disclosure of "internal money laundering" (see the archive) are also needed.
Paraphrasing what one retailer told the Nevada legislature a few years back, the only thing you can depend on when gas is $5.00 a gallon is that ARCO will be $4.98.
SPEAKING OF DEREGULATED MONOPOLIES: The long awaited draft of the City of Reno's new franchise with Charter Communications will be published this week.
It damn well better be. My cable consumer committee is scheduled to hear public comment on it at a live cablecast (SNCAT Sparks-Reno Charter channel 13) meeting on Monday, March 22, in the Reno council chambers at city hall. We will take live phone-in questions and comments.
The city has kept the committee I chair in the dark for months. Those of you watching our meeting last month saw that there's no such thing as leakproof government. I have posted the leaks I read into the record on the web. They will be linked to this column.
My committee twice brought evidence before the council complaining of manifest incompetence in the negotiations. We were ignored on both occasions. We asked to have a member of our committee sit in and were likewise turned down. Now, we will have less than a week to review a document which will set the standard for Washoe County and Sparks long term franchise renewals.
I have insisted that the draft be posted at the City of Reno's website for the public to review. If they don't do it next week, I will. Stay tuned.
CESAR CHAVEZ II. Reno's second Cesar Chavez birthday celebration will be held at Circus Circus at 6:00 p.m. on March 31, the 77th anniversary of the legendary labor leader's birth. The sponsoring television stations, KREN TV-27 (cable 6) and KUVR TV-68 (cable 24) will air biographical vignettes and special programs on Chavez as the date approaches. I'll be compiling a history of Chavez's 1986 visit to Reno-Sparks. I welcome the inputs of anyone who crossed paths with him in July of that year.
UPS UPDATE. Fortunately for all concerned, the California-Nevada strike I warned of a couple of weeks ago did not happen. Teamsters Local 533 was ready to take the system down if a handful of Sparks workers didn't get a fair deal. Teamster rep Mark Tracy writes that "the company caved. I went to Tampa, Fl., to meet with the VP's and came away with awesome pension, full bore paid-for health and welfare (benefits) and wage increases that will put these clerks at $27.34 per hour by 8/01/2007." [[HIGH FIVES FOLLOWUP: This agreement represents the first union contract for UPS office/professional staff in the nation.]]
Be well. Raise hell.
Copyright © 1982-2004 Andrew Barbano
Barbwire by Barbano has originated in the Daily Sparks (Nev.) Tribune since 1988.
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