Not A Joke Top Off With Gasoline or Diesel
Saudi Arabia just cut production to 50%. Rocket attacks against refineries and pipelines. You can bet your last dollar prices are going to double because of speculators. Crude has jumped on a weekend ...
Forum Discussion
Copied from OC Register: (note there is nothing to do with the middle east)
Editorial
Understanding California’s high gas prices
Gas prices have spiked in California, with the average price up 65.1 cents from the start of the year to the end of September. Drivers now are paying more than $4 per gallon throughout Southern California. Los Angeles County saw an increase of 32 cents in a week, according to AAA.
The price hike follows problems at three refineries. The Chevron and Marathon refineries in Southern California experienced unplanned maintenance. In Northern California, the Valero refinery in Benicia had an issue that led to a cutback in production.
California is particularly vulnerable to supply disruptions because of the state’s inability to import gasoline from other states. No other state uses the same formulation of gasoline that California requires, making the Golden State something of a fuel island, unable to address shortages. Other states that experience supply disruptions can easily import gasoline from somewhere outside their own borders.
Politicians typically point fingers at the oil companies for higher gas prices, but in October 2012, an action by then-Gov. Jerry Brown revealed another possible culprit.
At that time, problems at refineries had caused a supply disruption. A fire at a Bay Area refinery took that facility offline,
and a power failure at the refinery in Torrance temporarily limited production. The statewide average price of gasoline reached $4.66.
Citing the “unacceptable cost impacts on consumers and small businesses,” Brown ordered the California Air Resources Board to allow refineries to switch to the winter blend of gas earlier than usual.
California requires summerblend gasoline, which is better for air quality, to be sold from April 1 to Oct. 31, to coincide with the long warm-weather season. Winter-blend gasoline is sold from Nov. 1 to the end of March.
Brown’s order to California air regulators freed up more gasoline for sale, increasing the state’s supply by an estimated 10%. Unfortunately, temporarily easing air regulations to solve a gasoline supply shortage, although effective, isn’t as popular among politicians as demanding an investigation of energy companies.
Gov. Gavin Newsom already has asked the Energy Commission to investigate whether market manipulation is responsible for an increase in gasoline prices of between 17 and 34 cents per gallon, dating back to 2015. That report is due Oct. 15.
But with AAA reporting the national average price of gasoline at $2.65 while Californians pay a statewide average price of $4.02 (more than Hawaii, at $3.67), Californians deserve to know how much of the higher price is due to state regulations.
California’s cap-and-trade program, which requires refineries to buy permits
to emit greenhouse gases, adds a varying amount to the cost of fuel. And according to FuelingCalifornia. org, the California Air Resources Board has estimated that the additional costs of producing the state’s special reformulated gasoline adds 5-15 cents per gallon over the cost of conventional gasoline.
Then there are the taxes. Senate Bill 1 in 2017 added an extra 12 cents per gallon to the cost of gas, with an annual increase thereafter, to pay for road repair and mass transit projects.
High gas prices are a severe burden on people who have to drive to work, or who use their vehicle in their jobs or businesses. Newsom may want to consider whether temporary waivers of regulations could ease the pain, and in the longer term, whether the requirement for the state’s exclusive fuel blend is worth what it’s costing us.
Editorial
Understanding California’s high gas prices
Gas prices have spiked in California, with the average price up 65.1 cents from the start of the year to the end of September. Drivers now are paying more than $4 per gallon throughout Southern California. Los Angeles County saw an increase of 32 cents in a week, according to AAA.
The price hike follows problems at three refineries. The Chevron and Marathon refineries in Southern California experienced unplanned maintenance. In Northern California, the Valero refinery in Benicia had an issue that led to a cutback in production.
California is particularly vulnerable to supply disruptions because of the state’s inability to import gasoline from other states. No other state uses the same formulation of gasoline that California requires, making the Golden State something of a fuel island, unable to address shortages. Other states that experience supply disruptions can easily import gasoline from somewhere outside their own borders.
Politicians typically point fingers at the oil companies for higher gas prices, but in October 2012, an action by then-Gov. Jerry Brown revealed another possible culprit.
At that time, problems at refineries had caused a supply disruption. A fire at a Bay Area refinery took that facility offline,
and a power failure at the refinery in Torrance temporarily limited production. The statewide average price of gasoline reached $4.66.
Citing the “unacceptable cost impacts on consumers and small businesses,” Brown ordered the California Air Resources Board to allow refineries to switch to the winter blend of gas earlier than usual.
California requires summerblend gasoline, which is better for air quality, to be sold from April 1 to Oct. 31, to coincide with the long warm-weather season. Winter-blend gasoline is sold from Nov. 1 to the end of March.
Brown’s order to California air regulators freed up more gasoline for sale, increasing the state’s supply by an estimated 10%. Unfortunately, temporarily easing air regulations to solve a gasoline supply shortage, although effective, isn’t as popular among politicians as demanding an investigation of energy companies.
Gov. Gavin Newsom already has asked the Energy Commission to investigate whether market manipulation is responsible for an increase in gasoline prices of between 17 and 34 cents per gallon, dating back to 2015. That report is due Oct. 15.
But with AAA reporting the national average price of gasoline at $2.65 while Californians pay a statewide average price of $4.02 (more than Hawaii, at $3.67), Californians deserve to know how much of the higher price is due to state regulations.
California’s cap-and-trade program, which requires refineries to buy permits
to emit greenhouse gases, adds a varying amount to the cost of fuel. And according to FuelingCalifornia. org, the California Air Resources Board has estimated that the additional costs of producing the state’s special reformulated gasoline adds 5-15 cents per gallon over the cost of conventional gasoline.
Then there are the taxes. Senate Bill 1 in 2017 added an extra 12 cents per gallon to the cost of gas, with an annual increase thereafter, to pay for road repair and mass transit projects.
High gas prices are a severe burden on people who have to drive to work, or who use their vehicle in their jobs or businesses. Newsom may want to consider whether temporary waivers of regulations could ease the pain, and in the longer term, whether the requirement for the state’s exclusive fuel blend is worth what it’s costing us.
