The Spark

the Voice of
The Communist League of Revolutionary Workers–Internationalist

“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx

The Big Natural Gas Rip-Off

Mar 20, 2023

In recent months, natural gas bills have doubled or even tripled for Southern California households. Experts say that behind this sudden rise in prices was a sudden rise in wholesale prices in California’s spot market, where natural gas is sold and bought.

But why did wholesale prices rise so much—sometimes up to TEN times higher than usual—in the spot market? Experts throw their hands up and say, “Beats me!” They say that natural gas traders are not making spot market transactions public. And even though the Federal Energy Regulatory Commission could do that, it hasn’t either.

SoCal Gas, which is the sole provider of natural gas in Southern California, has told its customers in emails that it has no choice but to charge them these outrageously high prices. That is actually a lie. For many years, SoCal Gas has been storing gas in the off-season and selling it to customers during the high-demand winter months. But instead of that, this year the company chose to buy big amounts of gas on the spot market at exorbitant wholesale prices, and passed those prices on to customers.

No, what’s going on is no mystery. A few well-positioned people—big shareholders of companies selling wholesale gas on the spot market, such as SoCal Gas’ parent company, Sempra Energy—are making huge amounts of money this way, at the expense of the population.

It’s another massive rip-off scheme to further enrich big capitalists, with the complicity of federal regulators.