Monday, October 8, 2012

News item of the day


With gas prices spiraling out of control here in California, we suppose it was time for a little government intervention, right?

Gov. Jerry Brown Sunday ordered California smog regulators to allow winter-blend gasoline to be sold in California this month, a move intended to reverse a sudden scare in the wholesale gasoline market that saw prices shoot up nearly 50 cents a gallon in six days.

The average price of a gallon of self-serve regular gasoline in San Diego County climbed 3.8 cents overnight to settle at $4.712, a record high for a second day, according to figures from the AAA and Oil Price Information Service.

The previous local record of $4.63 was set June 19, 2008.

The governor ordered the California Air Resources Board to allow refiners and gas stations to roll out the winter blend before its previously- scheduled Oct. 31 sales date, an action the governor said will increase gas supplies up to 8-10 percent, ``with only negligible air quality impacts.''

In a letter released at noon, as California gas prices fluctuated widely for the seventh straight day, the governor said the market variations were imposing ``unacceptable cost impacts on consumers and small businesses.''

(ed. note: if by "fluctuate widely", they meant "shot up like a bottle rocket" then yes, prices did indeed "fluctuate widely")

This, he said, was threatening ``significant economic disruption, and serious harm to public safety and welfare.''

The average price in San Diego County has gone up 55.8 cents over the past week, which included a jump of 19.5 cents on Friday, according to the AAA and Oil Price Information Service.

It is now 55.4 cents higher than a month ago and 91.3 cents more than a year ago.

An analyst said California's wholesale gasoline market has gone ``into a panic about the adequacy of California fuel supplies,'' Jeffrey Spring of the Automobile Club of Southern California said the market disruption followed a power failure at the ExxonMobil Torrance Refinery and closure of a Chevron pipeline that moves crude oil to Northern California last Monday.

Other pressure on the state's gas market includes local refineries dropping production levels, energy companies exporting fuel to Mexico and other countries, and allowing inventory to dwindle in anticipation of switching over to production of winter blend gasoline, Spring said.

``I am directing the Air Resources Board immediately to take whatever steps are necessary to allow for an early transition to winter-blend gasoline'' to be sold in California, the governor said in a letter to Mary Nichols, his appointed head of the CARB.

So, it's not Big Oil that's driving up the price of gas? This certainly seems to be an admission as such.

But anyone else troubled by the fact that the governor can figureatively wave his hand over a board of politically-appointed bureaucrats to lower the price of oil. And let's not forget it was this board, the California Air Resources Board, that authored the job-killing AB 32 with its emissions restrictions. This same board self-vetted this law with one of their own scientists who lied about his Ph.D., claiming he received it from UC Davis, when instead he picked it up from a diploma mill in New York.

But back to Big Oil and the profits they make off of their product. You'd be pleased to know that California is right behind New York and tied with Connecticut for having the highest tax rate in the country at $0.67/gallon.

Excessive taxation on the commodity combined with excessive bureaucratic and regulatory burdens placed upon it by a sham of a regulatory board, and Senator Diane Feinstein wants the Federal Trade Comission to have Big Oil investigated for collusion.

Yep. We're in the best of hands.


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