Hearing looks at reasons behind spikes in gas prices


The California Energy Commission says 2012 has been a record year for the number and severity of gasoline price spikes. Thursday, State Sen. Mark Leno, D-San Francisco, went searching for answers why and can the state do more to protect consumers.

It's certainly not the first hearing of its kind but there were some things said that sounded new.

"We seem to have some information from the air quality district that there was in cat on-going production when they say they were shut down," Leno said.

Oregon-based consultant Robert McCullough says his painstaking analysis of environmental emissions data suggest that in May, Shell's Martinez plant was making gasoline for at least one of the two weeks it claimed to have been shut-down. Chevron's Richmond refinery was also supposed to be down for maintenance for two weeks in May, but McCullough says emissions data shows it never did.

But even with those shut-downs, real or fabricated, and the Richmond fire in August, McCullough says he cannot explain the record-setting October price spike.

"Certainly there was no evidence of disaster here; why did the hysterics set in, and, quite frankly, I can't explain it," he said.

The Western States Petroleum Association, representing 12 of the state's 14 refineries, shot back McCullough's conclusions were based on third party information from The Bay Area Air Quality Management District, not from refineries themselves, that there's no evidence refineries were operating when shut down for maintenance, there were multiple disruptions that caused a major disruption to West Coast as supplies and the market worked as expected and there is no price fixing scheme.

McCullough believes even if there's no industry wrong-doing, there is a need for more transparency and possibly more regulation.

"What we have on oil and gasoline is a situation where the data is weak, then enforcement's weak, and certainly the access to the information is very, very weak," he said.

There are some reasons why gas prices are higher in California than the rest of the country – there are few refineries in California and the state does not have any pipelines connecting it to the Midwest of Gulf Coast.

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