Sunday, 26 February 2012

California gas woes

Gas prices set records for overnight increases this week

24 February, 2012

Overnight gas prices rose at a record pace this week, according to data from AAA, the Auto Club.

This year, gas prices rose from 2011's record levels to set new highs for January and February, typically a low-consumption time of year. In the past week, the average price of a gallon of unleaded rose by record amounts, including three of the top five overnight increases since 2000 in San Diego and in Riverside and San Bernardino counties, according to AAA.

High prices for crude oil, plus refinery cutbacks have sent prices rocketing upward.
"Oh my God, it's absolutely horrible," said Jason Harms, a former Marine living in Vista. "Gas prices are insane."

On Friday, the average price of a gallon of gasoline in San Diego County rose 5.6 cents, or 1.3 percent, overnight to $4.23. In Riverside and San Bernardino counties it rose 6.3 cents, or 1.5 percent to $4.20.

The largest overnight increase in the average price of a gallon of unleaded since 2000 hit on Thursday. In San Diego County, prices rose 6.6 cents, or 1.6 percent, to $4.18 per gallon. In Riverside and San Bernardino counties, they rose 6.8 cents, or 1.7 percent, to $4.14.

"You'd have to go back to the Exxon Valdez," in 1989 to find a faster increase, said Charles Langley, an analyst with the Utility Consumers' Action Network in San Diego.

The rising gas prices had drastic effects on Murrieta resident Sharece Moore's life. Just this week, she said, she quit her job in San Diego and took a position in Temecula instead because the two-tanks-a-week commute was costing her too much money.

"Gas is a major problem for me," she said. "This is a little car so it shouldn't even be that much to fill up, but that doesn't matter because gas is so expensive."

High gas prices hit locals on fixed incomes particularly hard. Ruth Rivera of Escondido is retired and living on disability payments.

"People who own the oil companies seek to help their own pocket," she said. "They have no consideration at all for people with smaller incomes."

High crude oil prices provided most of the impetus for recent increases. On Friday the price of a barrel of Alaskan North Slope crude oil, the price which California refiners pay, reached $127.99, up $6.25 from a week ago, according to the California Energy Commission. That increase adds an extra 15 cents a gallon on its own. World oil supplies are tight thanks to demand from developing economies in China and India, but also because supply is threatened by a possible embargo against Iran, which produces 3 percent of the world's oil.
Recent disruptions at refineries spell higher prices for Californians.

Last week, a fire at a BP-owned plant in Washington shut down production. That plant, the fourth-largest one on the West Coast, provides 2 to 3 percent of California's gasoline, according to Adam Gottlieb, a spokesman for the California Energy Commission.

The fire reduces refinery production even as two California refineries, owned by Valero and Tesoro, are closed for scheduled maintenance and to make a changeover to a summer blend of gasoline.

Also, late Thursday, a plant in Carson owned by BP had an "unusual event" that may have affected production, although BP spokesman Tom Mueller in Houston, would not say whether operations had been affected.

"A little operational blip doesn't necessarily mean there are significant supply disruptions," Mueller said.

Sam Atwood, a spokesman with the South Coast Air Quality Management District, said BP made two filings with his Diamond Bar, Calif.-based agency on events ---- or "flarings" ---- that occurred at the Carson refinery in the last week. One on Tuesday led to a flaring of excess gases for about an hour, while the second one, reported late Thursday, is expected to last for 24 to 48 hours.

Flaring is a process of burning off toxic gas emitted from a refinery as part of a safety measure to prevent a fire or explosion. The buildup in gas happens for many reasons, but could come as the result of a breakdown of equipment at the refinery, malfunction, or replacement of units or something else, Atwood said.

The events in Carson and Cherry Point combined with scheduled maintenance and a shift to the summer blend at California refineries owned by Tesoro and Valero could reduce California's refined gasoline production by as much as 20 percent, Langley said.
"We're going to see high-octane price hikes in the next 72 hours," he said.

Julie Truax of San Marcos is frustrated by the situation.

"The oil companies had record profits," she said. "Why don't they accept a reasonable profit, like the rest of us?"

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