|
|
|
Uploaded: Tuesday, October 9, 2012, 9:11 PM
Updated: Wednesday, October 10, 2012, 6:02 AM
Brown moves to ease fuel regulations, possibly leading to lower gas prices
Early switch to winter blend could increase supply 8-10%
|
The California Air Resources Board has announced that it is easing some restrictions on gasoline production in response to a directive issued by Gov. Jerry Brown.
Brown ordered the board to allow refineries to switch to a gasoline blend that is normally only used in winter in an effort to lower gas prices.
The order directed the board to take whatever steps are necessary to authorize refineries to make an early switch to winter-blend gasoline.
The blend isn't normally sold until after Oct. 31. It evaporates more quickly than summer blend and is worse for air quality during the smog season, according to state officials.
However, an early transition to it could increase the state's fuel supply by an estimated 8 to 10% with a negligible air quality impact, Brown said. Due to its composition, refiners can produce more of the winter blend.
In response to the governor's order, the California Air Resources Board announced that it will allow the manufacture, importation, distribution and sale of the winter-grade gasoline.
State officials said the recent spike in gas prices, which has seen gas prices above $5 a gallon in some areas, has been fueled in part by recent disruptions in gas production, including at an Exxon refinery in Southern California.
However, U.S. Sen. Dianne Feinstein said that even with the disruptions, gas production in the state this week remained nearly as high as a year ago, and that stockpiles remain similar to last year's.
Feinstein sent a letter to the Federal Trade commission on Sunday calling for an investigation into the price hike.
"California's consumers are all too familiar with energy price spikes, which cannot be explained by market fundamentals and which turn out years later to have been the result of malicious and manipulative trading activity," Feinstein said in her letter. — Bay City News Service Are you receiving Express, our free daily e-mail edition? See a sample and sign-up for Express.
|
|
| Comments
|
Posted by Citizen, a resident of the Another Pleasanton neighborhood neighborhood, on Oct 10, 2012 at 12:12 pm Don't bother, Feinstein. The Federal Trade Commission will not find any malicious activity. The real problem is California voters. Remember all those "Earth Friendly" propositions you voted for in the past? That is causing the higher prices in California! Not the gas companies or station owners. Think about what you vote for in the future and what impact it will have long term. Like the current situation in the White House and Congress!
|
|
Posted by No Prob, a resident of the Amador Estates neighborhood, on Oct 10, 2012 at 1:49 pm It is not urgent that California's principal architect of this State's destruction, Jerry Brown, lower regs.
The reason is the our 'brilliant' Democrat Congresspeople like Windmills McNerney will be soon replacing oil & gas energy with "algae, kudzu, and seaweed."
I am sure this new energy source will be ready by Jan. 2013. Correct McNerney???!!!
|
|
Posted by john, a resident of the Another Pleasanton neighborhood neighborhood, on Oct 10, 2012 at 3:50 pm Hey "Citizen",
The temporary high prices are caused by short term problems like refinery and pipeline issues. You have it wrong.
|
|
Posted by liberalism is a disease, a resident of the Birdland neighborhood, on Oct 10, 2012 at 4:05 pm
liberalism is a disease is a member (registered user) of PleasantonWeekly.com John, you and citizen are partially correct about our gas prices being high (temporary or not), but you can read all about the contributing factors below:
California has higher fuel taxes than neighboring states, currently 68 cents per gallon vs. 33 cents in Nevada and 19 cents in Arizona. This explains most of the difference. California's tax per gallon also varies because it has a percentage-based tax unlike most states, in addition to the flat per-gallon tax (2.25% state + 1.25%+ local depending on county). Thus when prices rise, so do taxes per gallon in California. The structure of the tax was actually recently changed in 2010 during the budget crisis, when it used to be a lower flat rate and a 8.25% variable rate.
California also requires a special blend of gasoline only used by us to reduce air pollution that a limited number of refineries produce, which increases costs by about 5-15 cents per gallon. There are only 12 gasoline refineries in the state. This also leads to greater price volatility because a refinery shutdown will disrupt the supply a lot more than for the other states who have more options in where to buy gas.
Finally, there are the costs of operating for gas stations: Land values are higher in California compared to Arizona or Nevada, and building a gas station in SF requires about the same amount of land as in Phoenix, but you can bet leasing the land is many times more expensive. California's state minimum wage is $8.00, similar to AZ/NV but in some areas it is higher (like $10.24 in SF), making station employees more expensive. Also I'm willing to guess that anti-smog and groundwater pollution requirements make compliance more expsenive than in laxer states. Random stuff like water for washes even costs more, since hey, we don't exactly have much water left either.
One question: If our gas formulation is so critical to our survival in this state, why is it OK for Brown to now circumvent the expensive custom formula that the enviros fought so hard to impose on us? Where's all the greenies and why aren't they in a snit? Imagine if Arnold had done this...the whining by leftists would have been deafening.
|
|
|
| |
|
Send this story
Print this story
