Seeking a Fix for California’s Gasoline Market Problems

With pump prices safely in the $3 range these days, October’s record-breaking gasoline surge might seem like a distant memory to California motorists. But don’t go racing to buy that supercharged, gas-guzzling Hemi just yet.

When retail gasoline prices surged by 50 cents per gallon in early October, the immediate cause was an outage at ExxonMobil’s Torrance refinery. This closely followed an August explosion at Chevron’s Richmond refinery that sent thousands of residents streaming into hospitals and clinics.

More broadly, the culprit was our over-dependence on oil, which makes us vulnerable to jumps in global crude oil prices and breakdowns in an aging supply system. The lasting solution will be to reduce our crippling dependency and to create more fuel choices.

Our state’s clean energy law, AB 32, is reducing our dependence through the clean cars program that will double how far cars can go on a gallon of gasoline by 2025. It’s also expanding supplies of clean fuels through the groundbreaking clean fuels standard, helping ensure real competition in the fuels market.

These programs are clearing the way for innovative companies to create good jobs in California by producing advanced renewable fuels, biogas, cleaner electricity and plug-in electric cars.

The lesson is clear. As long as the oil industry refuses to offer us alternatives to gasoline and diesel, we will remain subject to the profit-taking whims of oil companies, global price spikes and refinery outages.

In fact, California has experienced 32 gasoline price spikes since 2006. Jumps in global crude oil prices were responsible 64% of the time. Of the rest, refinery accidents and equipment failures accounted for 20%, planned refinery shut-downs for maintenance 6%; and seasonal and holiday driving demand 10% of the time.

But the finger-pointing from the oil companies has been swift and predictable. Surely, the state’s clean air laws are to blame, they say.

Feel as if you’ve seen this movie before?

Californians shouldn’t be fooled by industry-backed groups that pretend to have consumers’ interests at heart. The latest incarnation is the Chevron-funded lobbying group Fueling California that, together with the Western States Petroleum Assn., is now spending big bucks scapegoating our clean energy law.

Instead of hiring lawyers and lobbyists to fight climate science and the very solutions that will provide consumers relief at the pump, oil companies would make us all better off if they instead invested more of their record profits to make their systems safe and reliable, and commercialize new, cleaner fuel sources that won’t run out.

We need California’s clean energy law and other programs to start phasing in more fuel choices and phasing out our oil dependency. Thanks to smart policies like these, we’ll be less vulnerable to future price spikes, helping California move forward. Let’s make sure the oil industry doesn’t turn us around.

Filed in: BlogSimon Mui