3.17.2013

California's “self-inflicted" gasoline crisis



California's Green Gas Shortages - Prices are spiking thanks to state mandates that will only get worse
Excerpt:


Californians are grumbling about a gas price spike, which state officials blame on disruptions in the supply chain. Actually, they're paying through the nozzle for their greener-than-thou government. Gas prices in California have soared by 55 cents in a week to an historic high of $4.65 per gallon, about 84 cents higher than the national average. The immediate cause was a power outage at an Exxon refinery in Torrance. A Chevron refinery in Richmond that caught fire in August has also been operating at reduced capacity. The resulting fuel shortage has forced wholesalers to ration deliveries, and retailers that buy on the spot market to close. This gas crisis is self-inflicted, like so many problems in the state. Because California's fuel regulations are the most stringent in the country, the state is isolated from other energy markets. Few refineries in the world can produce the unique reformulated gasoline blend that the state requires, and almost all are located in California.
The Golden State’s “self-inflicted crisis”
Excerpt:


It’s important to keep in mind that California’s energy policies have effectively turned the state into a “fuel island” – disconnected from the rest of the U.S. market. California’s state-specific fuel standards and isolated logistics mean that gasoline and diesel can’t be easily brought in from other states when there is a supply shortfall. And a host of only-in-California regulations have raised costs, making it more difficult for refiners to invest in new technologies, and have even forced several refiners to shutter their facilities.
California Facing $5 Gasoline Stirs Brown to Relax Rules
Excerpt:


California is dependent on its own refineries for gasoline because the state is mostly cut off from oil-products pipelines spanning the rest of the country. Refiners outside California are generally not equipped to supply the cleaner-burning gasoline required in the state.



Comment: Interesting. And politicians want to blame the industry!

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