Page 2 January 28, 2016 EL SEGUNDO HERALD Sinking Crude Oil Prices Create a Domino Effect By Rob McCarthy Falling crude oil prices have created a domino effect from the Black Sea to Southern California, making it tougher on guys like Russian President Vladimir Putin but easier on regular Joes. West Texas crude - the benchmark on the global oil market - fell below $28 a barrel in mid-January and continued its 18-month slide. A barrel of West Texas crude hovered at $100 from 2011 to 2014, but has lost three-fourths of its value. The decline came at a bad time for U.S. oil and gas producers, who increased daily output by 400,000 barrels per day last year. Crude prices could slide further, according to the International Energy Association. “Can it go any lower?” the IEA asked in a Jan. 19 report. “Unless something changes, the oil market could drown in oversupply. So the answer to our question is an emphatic yes.” The International Energy Association foresees a “persistent” oversupply in 2016, “bloated’ inventories and “a slew” of negative economic news for pressuring prices downward. Some analysts think crude could slump to $20 a barrel this year. It was $140 a barrel two years ago. The plunge in oil prices clearly benefits consumers and businesses, especially those in trucking and delivery. Drivers and companies are paying less to fuel up their vehicles, savings that can be used to pay down debt, invest or save for a rainy day. The domino effects here in Southern California are lower gas prices and a squeeze on the refineries to stay profitable. Investors in energy companies saw their portfolios devalued in the first three weeks of January. Chevron and ExxonMobil stocks were down 6 percent in trading on Jan. 20, dragging the Dow Jones with them. Prices at the Pump The volatility of oil has driven U.S. gas prices below $2 a gallon in most of the nation. Former South Bay resident Frank Griffin, who now lives in Arkansas, reported paying $1.52 for regular unleaded gas. “$1.52 a gallon! Searcy, Arkansas. Not bad,” he said. Regular unleaded ranged from $1.79 in Orlando, Fla., to $1.91 in Milford, N.H. It’s hardly news to Californians that they pay some of the highest prices for gas in the nation, compared to: Denver: $1.75 Dallas: $1.89 Charlotte, N.C.: $1.89 California’s statewide average was $2.84 for regular and $2.96 for midgrade in a Jan. 11 survey by the California Energy Commission. California drivers pay 50 cents in excise taxes per gallon of gasoline, plus the lower-emission summer and winter blends required by the state are costly to produce, oil companies say. Consumer advocates aren’t satisfied with below-$3 gas. Consumer Watchdog, a nonprofit group in Santa Monica, calculated that California drivers paid $10 billion extra for their gasoline last year than drivers in other states. The group presented its findings last month to the California Energy Commission’s Petroleum Market Advisory Committee, which is tasked with creating solutions to gas price volatility. Refinery Profits Refiners’ profit margins were up significantly in 2015, according to industry reports. Oil-Price.net, which calls its web site the No. 1 oil price source, reported in the fourth quarter of 2015 that refineries were profitable despite lower oil company profits. “Refiners are using lower crude prices to wider their cut of the pump price of oil. In other words, the lower price of oil is not entirely passed down to consumers at the pump, instead the difference is enabling refiners to increase their profits,” a December story on the website said. California refineries earned an average of 49.3 cents on a gallon of gasoline from 1999 to 2014, according to the California Energy Commission. Last year, the average rose to 88.8 cents after an explosion at the Exxon Mobil Torrance refinery in February 2015 disabled 7% of the state’s capacity at a time of low inventories, the commission said. Repairs are ongoing in Torrance. ExxonMobil will sell the Torrance refinery to PBF Energy in a deal that is expected to be completed midyear. The deal is subject to repairs to the refinery’s electrostatic precipitator and regulatory approval, ExxonMobil announced in September. The deal includes a lubricants distribution center at Vernon, products terminals at Vernon and Atwood, and associated California pipelines and other logistics assets, including facilities at the Southwest terminal. See Oil Prices, page 10 OFFICE SPACES in all SIZES A L O N G T H E R O S E C R A N S C O R R I D O R I N E L S E G U N D O / M A N H AT TA N B E A C H CONTINENTAL PARK A project of CONTINENTAL DEVELOPMENT CORPORATION 2041 Rosecrans Ave., El Segundo, CA 90245 • Amenity Rich Location • Convenient Access to Metro Rail System, 405 & 105 Freeways • 10 minutes to LAX • Professional Property Management on Site • It’s Not Just a Location; It’s a Lifestyle! www.continentaldevelopment.com For Leasing Information, call 310.640.1520 Herald Office spaces in all sizes ad 2.indd 1 8/15/15 7:24 PM City Council from front page protection, fighting LAX noise pollution and preserving El Segundo’s small town atmosphere as his top priorities should he rejoin the Council. “Quality of life issues around traffic, parking, aging and mansionization will be on my radar also,” Brann wrote. Brann went on to note that with strong industrial and commercial development spurring revenue growth and a balanced budget, that “there is no need for residents to pay more taxes.” Pointing out that first-rate schools lead to increased property values, Brann added that he is in a unique position as a former El Segundo teacher, long-time former superintendent of Wiseburn and founder of the DaVinci schools to “help ensure our kids receive a 21st Century education leading to a quality career.” Fellhauer, 43, noted that she is honored to have served on the Council for the past four years, prides herself on responding to local residents, and said it has been her pleasure to be available to discuss City issues with anyone. “Knowing full well that I’ll never please everyone, I’m not afraid to make difficult decisions,” Fellhauer wrote. “I research information carefully, weigh options, consider alternatives, and make decisions based on what is best for El Segundo overall.” Fellhauer emphasized that the City can’t continue to defer critical infrastructure projects and maintenance. “Taking short, mid, and long-term impacts into consideration, El Segundo deserves sustainable services and infrastructure including our beloved public safety, parks, library, streets and sidewalks. This can be accomplished through strategic fiscal planning and sound economic development.” Stating that she has learned a great deal about City government and how to accomplish goals, Fellhauer pledged to continue working with legislators to increase El Segundo’s 6.3 percent share of each property tax dollar. “It’s our community’s money and more of it ought to stay here. I promised to be a watchdog for your tax dollars. I’ve fulfilled that promise and will continue to do so. Experience counts...” Pirsztuk, 52, is a career businesswoman, small business owner and 40-year El Segundo resident. She believes she can provide the leadership, strategic planning and vision to move the City forward. “My vision is for El Segundo to become financially secure while ensuring all citizens receive the services they need while maintaining the balanced budget they deserve,” Pirsztuk wrote. She noted that her vision is for the City to “become financially secure while ensuring all citizens receive the services they need while maintaining the balanced budget they deserve.” A former Vice President of Sony Pictures Home Entertainment, current non-profit CEO and small business co-owner, Pirsztuk described her work style as that of a “proactive problem solver focused on collaboration and common sense.” She pointed to her “comprehensive expertise in board development with both corporate and public sectors” with service on five non-profit boards and many executive positions held over 30 years of management and 15 years of executive management experience. “Additionally, I have extensive knowledge of budgeting, strategic planning, contract negotiations, and change management— all skill sets complementary to the Council team,” she wrote. “I believe I hold the experience, leadership, strategic planning and vision to better the City of El Segundo.” The City Clerk’s office indicated that the tentative date to mail sample ballots to residents will be March 14. Those not registered to vote have until March 28 to do so. April 5 is the final day to request a vote-by-mail ballot with a regular application. Once the new Council is in place, the five members will select the Mayor and Mayor Pro Tem from amongst themselves. Past municipal code required this action to take place at the Council meeting one week after the election, which this year is April 19. However, recent State legislation extending the period (to eight days past the election) for voters who neglect to sign their vote-by-mail ballots to rectify the situation required a change—since the election results now can’t be certified in time for the April 19 meeting. Thus the next Council will wait until May 3 to be sworn in, with the Mayor and Mayor Pro Tem choices also made that evening. • Like Us on Facebook
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