The California Air Resources Board (CARB) adopted its Advanced Clean Cars II (ACCII) regulation. ACCII requires 35% of light-duty vehicle sales to qualify as “zero emission” by 2026 and 100% by 2035. Essentially, this amounts to a ban on new sales of traditional gasoline and diesel-powered cars and trucks. To implement the policy, California will need a Clean Air Act waiver from the Environmental Protection Agency (EPA). If EPA grants the waiver, millions of Americans—including many outside of California—could lose the option to buy the car or truck THEY want.
Earnings in commodities-based industries tend to be cyclical. Because of the up-and-down reality of refining, it would be a mistake to regulate or legislate based on the high points. A few quarters of earnings don’t provide an accurate representation. That context is important for answering the question of what happens with refinery profits and whether using earnings to “buy back” stock from shareholders is an appropriate use of those funds.
California has officially asked the Biden administration for permission to ban the sale of new gasoline and diesel vehicles by 2035—an unprecedented move that will deny millions of Americans the ability to choose for themselves the types of cars or trucks they want to drive. The decision is entirely up to President Biden...
Publicly owned companies, like many U.S. refineries, have a fiduciary responsibility (which is a legal obligation) to act in the best interest of their shareholders, and that extends to how companies spend their earnings. Often, earnings are spent on a combination of the following: direct dividends, stock buy back programs, paying down debt and capital investment projects.