Fueling Transparency: My Summer with California’s Petroleum Watchdog
Zahra Thabet is a Ph.D. student in Economics at Stanford University, where her research focuses on topics at the intersection of environmental economics and market structure and competition.
This summer, I am serving as a Shultz Energy Fellow with the California Energy Commission’s Division of Petroleum Market Oversight (DPMO), the nation’s first independent watchdog agency for the oil and gas industry. DPMO was established by the California Gas Price Gouging and Transparency Law (SBX1-2, 2023) to monitor the transportation fuels market, conduct investigations, perform economic analysis, and develop policy recommendations aimed at increasing transparency, promoting competition, and protecting consumers.
In my role, I focus on applying quantitative tools from economics to better understand petroleum market dynamics and support policy recommendations that advance California’s energy and climate goals. This work sits at the intersection of economic analysis, industry oversight, and public policy and requires balancing the technical complexities of petroleum markets with the broader goals of California’s clean energy transition.
I’ve spent part of the summer working from Stanford and part at the California Natural Resources Agency (CNRA) offices in Sacramento, where DPMO is based. A typical day involves spending around 70% of my time on statistical analysis and data cleaning; tasks like examining refinery-level production and pricing data, analyzing trade flows, or building models to understand how market shocks affect prices. The remaining 30% is dedicated to collaboration: discussing work products with colleagues, presenting findings to our economists and policy advisors, and iterating on analyses to ensure they are both technically sound and actionable for policymakers.
For my work, I have had to take a deep dive into the structure of commodities markets, petroleum engineering, and California environmental policy. For example, I’ve learned how to interpret when the market is in contango -- a condition where futures prices are higher than spot prices, often signaling that storage costs or anticipated future supply constraints are driving pricing -- versus backwardation, where futures prices fall below spot prices, often reflecting immediate scarcity or high demand. Understanding these dynamics has been crucial for analyzing California’s gasoline and blending component markets, where price structures can shift quickly due to refinery outages, seasonal demand changes, or regulatory requirements.
In this role, I’ve gained a far deeper appreciation for how complex and interconnected California’s fuel supply chain really is: from global crude sourcing to refinery production constraints to the role of state-level regulations. I’ve also been struck by how collaborative and fast-paced DPMO’s work is; policy recommendations are grounded in detailed, data-driven analysis but shaped by ongoing conversations between economists, lawyers, and policymakers.
Outside of work, I’ve taken my time in the Sacramento area to explore the nearby Sierras; sometimes driving an hour after work to go on a quick hike before heading back to my Airbnb.
This fellowship has shown me how rigorous economic analysis can directly inform policy, especially in a sector as critical, as transportation fuels. It’s been rewarding to contribute to the state’s efforts to promote transparency, protect consumers, and accelerate the transition toward a cleaner energy future.
