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Relief Expected for California's Skyrocketing Gas Prices

SAN FRANCISCO -- California's skyrocketing gasoline prices are expected to start easing in the next few days, after an idled refinery resumed production and Gov. Jerry Brown ordered that refineries be allowed to make winter-blend gasoline earlier than usual, the Wall Street Journal reported.

The state's gas prices have jumped 50 cents a gallon over the past week to a statewide average of $4.67 a gallon for regular unleaded as of Monday. That compares with $4.17 a gallon a week ago and $3.89 nationally, according to estimates by AAA, the national automobile club.

According to the newspaper's report, the rising prices were largely the result of oil supply problems caused by ExxonMobil Corp.'s big refinery in Torrance, Calif., losing power and going out of service. This compounded disruptions from an Aug. 6 fire at a Chevron Corp. refinery in Richmond, Calif., said Trilby Lundberg, president of the Lundberg Survey, which tracks gasoline prices nationwide.

ExxonMobil said it had fully restored production in Torrance as of Friday, while production still hadn't been fully restored at the Chevron refinery in Richmond. Both refineries produce a special formulation of gas that meets California's stringent air-quality standards, the report noted.

Lundberg predicted prices would start easing in California over the next several days, due to the refinery going back on line.

In addition, Gov. Brown called Sunday for production of the winter-blend gas that is used when ozone-causing smog isn't such a problem. Winter-blend gas is easier to produce, but because it evaporates quicker, it is considered worse for the environment than the summer blend. For this reason, it is usually not released until Oct. 31.

As of Monday, the state's refineries were free to start using the winter gas and are expected to ship it to the market over the next few days, Gordon Schremp, senior fuels analyst at the California Energy Commission, told the Wall Street Journal.

The shortages underscore California's relative isolation from the rest of the nation in terms of energy. The state is the largest fuel market in the nation, but its strict production rules make importing gasoline from other areas difficult. And there are no fuel pipelines connecting it to markets across the Rocky Mountains. Also, because its 14 refineries are operating near the limits of their capacity, disruptions can quickly cause shortages, the news report stated.

As CSNews Online previously reported, the skyrocketing prices caused some of the state's gas station operators to temporarily shut down their pumps. Valero Energy Corp. also temporarily stopped selling gasoline in California's wholesale market.  

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