Advocates For Consumer Rights

Hawaii’s Gas Cap

AFCR Communications Director Scott Foster with former Hawaii Governor Ben Cayetano.

Hawaii’s controversial “Gas Cap” made headlines all over the world and evolved from the “jaw-dropping” lawsuit Governor Ben Cayetano bravely filed in 1998 against BHP Hawaii Inc., Tesoro Petroleum Corp., the Chevron Corp., “as well as Tosco Corp., Texaco Inc., Shell Oil Co. and Unocal Corp.” Among other things, the lawsuit revealed: “Although Hawai’i made up only 3 percent of ChevronTexaco’s national market, it accounted for nearly 23 percent of the company’s annual national profits” and “Competition among oil companies in Hawai’i was virtually non-existent.”

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What followed was a legal and political battle of operatic proportions waged by tiny Hawaii against these large rapacious corporations. Complicated beyond one’s wildest imagination, the suit was finally settled for a pittance because of the state’s financial situation which had become strained during an earlier recession. The historic lawsuit was simply taking too much time and money to continue. See former Governor Ben Cayetano’s published accounts and a sampling of the related media HERE.

May 4, 2006 - The SRO crowd watching the Gas Cap being "put to sleep."

May 4, 2006 – The SRO crowd watching the Gas Cap being “put to sleep.”

Suffice to say, AFCR was proud to have been a part of the long effort that succeeded in finally “getting the oil industry’s books open” in order to reveal the truth about the often inflated, “price gouging” prices of oil in Hawaii and elsewhere. While the later Republican Governor Linda Lingle and the oil industry’s vast PR machines indeed succeeded in demonizing and finally “sidelining” Hawaii’s Gas Cap on May 4, 2006, the extraordinary law remains on the books and “… allows Hawaii’s governor to reinstate the gas cap law at any time.” See more of the photos of that extraordinary day (and night) HERE.

AFCR Communications Director Scott Foster was later quoted in a New York Times article as saying, “Hawaii’s Gas Cap may be sidelined for now, but it’s still there on the books and hangs like a Sword of Damocles over the heads of these crooked oil companies.” The following media story and this WIKI link tell only part of the long political saga.

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Thursday, January 17, 2002

State settles oil suit for 1%
The $2 billion action over inflated gas prices finally sputters out for a penny
on the dollar
By Tim Ruel

The state has agreed to end its three-year price-fixing lawsuit against Hawaii’s major oil companies in return for a $20 million settlement from the five firms still fighting the case, a payment that would be 1 percent of the roughly $2 billion the state had been seeking.

A deal in principle was reached between all sides yesterday after six months of mediation, said attorney Clyde Matsui, who served as mediator and discovery master in the suit. The companies and the state must still negotiate specific points of the settlement, he said. Matsui would not comment on the specific amount of the settlement.

The settlement is about $20 million, according to a person familiar with the deal who requested anonymity. The amount could change in the final agreement.

The money comes on top of $15 million the state won in a settlement in 2000 with two companies, BHP Hawaii Inc. and Tesoro Petroleum Corp., which opted out of the suit and denied wrongdoing. Still contesting the case were Hawaii’s market leader, Chevron Corp., as well as Tosco Corp., Texaco Inc., Shell Oil Co. and Unocal Corp. Read more HERE.

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The above photo is of a little-known and forgotten group of brilliant men who “knew more than God” about how the American oil industry operated. Known as The Coalition Against Price Gouging (CAGPG), the group included:

– Professor Lawrence Boyd – Economist, University of Hawai’i.
– Mr. Wayne Cahill – Administrative Officer, Hawai’i Newspaper Guild
– Mr. Ted Clause – former Deputy Attorney General, Antitrust Division, State of Hawai’i.
– Mr. George Fox – Retired Computer Industry manager/consultant, and President, Hawaii Advocates for Consumer Rights.
– Mr. Eric Gill – Financial Secretary-Treasurer, H.E.R.E. Local 5, AFL-CIO
– Mr. Howard Lee – Former Vice-Chairman Pacific Resources, Inc. (parent of Hawai’i Independent Refineries {Tesoro}), CEO of The Gas Company & PRI Energy Systems, and Energy consultant to Petronas Malaysian National Oil Corp.
– Mr. Douglas P. Luna – A.I.A. Honolulu Architect
– Dr. Richard Miller – Professor of Law, Emeritus, Richardson School of Law, University of Hawai’i at Manoa.
– Dr. Hugh Ogburn – Former Sr. Vice President Pacific Resources Inc., Former Director of Research and Development, ARCO, Vice President & Director INCON TRADE (international oil trading & shipping).
– Professor Jim Wheeler – James Wheeler, Professor of Accounting, Emeritus, University of Michigan.
– Mr. Frank Young – Former Chairman, Petroleum Advisory Council in the Hawai’i State Department of Business, Economic Development and Tourism, former President, Hawai’i Automotive Repair & Gasoline Dealers Association, and a retail gasoline dealer for 20 years.

AFCR’s Scott Foster managed the media campaign.