Is help really on the way?

Assembly Speaker Fabian Nuñez (D-Los Angeles) and three of his Democratic colleagues announced bills to broaden oversight of California refiners. But The Times' Marc Lifsher reports there are questions about whether Sacramento can do much to deal with rising gas prices:

Gas prices at California pumps teetered at near-record highs again Monday, as politicians at the state Capitol scrambled to scrutinize oil company practices and profits. Lawmakers — especially at election time — have railed for years about the budget-busting cost of gassing up cars and trucks. Although they have had little success, they keep trying. Downtown Los Angeles diamond dealer Samir Shahrestan was skeptical but sympathetic to the Legislature's efforts. "The oil companies are a lot bigger and more powerful than they are. They affect politics at a much higher level than our Legislature," Shahrestan said as he pumped more than $40 of gasoline into his Jaguar sedan.

Comments

[Todd Lyons]

Good God. What politicians are trying to do is criminal. Prior to Katrina, refineries were running at 90+% capacity during the heaviest demand portion of the year and going into turnarounds once per year (late winter) for maintenance. Now we have refineries running at 90% capacity for 2 years continuously since Katrinia trying to keep up with the demand that has stayed constant, delaying their normal maintenance cycles and only doing emergency maintenance. So now you have equipment that is lacking it's major maintenance cycles and when things break, they break *BAD*, plus it has an additional two years of maintenance to catch up on as well, taking longer.

Politicians also have it wrong with regard to refining capacity. Since elections are approaching, their cry is "no new refineries have been built for 10+ years". Want to know why? Because in order to get around EPA regulations and permits, they just expand the capacity of existing refineries. The demand for gasoline has gone up continuously for the past 10 years and the refineries have expanded to meet that demand. Refineries are refining *MILLIONS* of barrels PER DAY more now than they were just a few years ago. That does not belittle the fact that now they are indeed hurting trying to continue to meet that demand, which appears to be expanding faster than refining capacity. Part of the problem there is people clamoring for more gas, but as soon as a refinery is proposed that is in the area, the NIMBY mindset sets in (Not In My Back Yard).

In the free market, prices go up to try and bump that demand back down. Gasoline stocks declined for 12 consecutive weeks, at a time that is *BEFORE* the heaviest demand normally occurs (prior to Memorial Day) and as a result we are at our lowest gasoline stocks since the 90's. Go read http://i-r-squared.blogspot.com/2007/05/this-week-in-petroleum-5-16-07.html for much more detailed info from an oil industry employee.

Heck, read that whole site. http://i-r-squared.blogspot.com/ Robert Rapier is a straight shooting guy. His articles, comments, and replies to others' comments will open your eyes and hopefully you'll see that your criminal politicians are about to set you up for failure if they institute price controls. Price controls will do nothing but encourage you to continue consuming. When the prices rise, you cut back and use less. When gasoline stocks get low, the prices should rise, not be held artificially low and encourage you to keep using gas, which keeps demand high (and rising), and depletes our gasoline reserves even further. In regards to oil/gas, politicians == criminal. (I keep using the word criminal, but in reality much of seems to be that they are just ignorant, and in some cases politically motivated to stay ignorant. But in my day to day life, my mantra is that ignorance is never an excuse. These people are our elected officials, with the jobs of securing our futures. These "educated" people are RUNNING IT INTO THE GROUND. That is criminal.)

Note that gas prices are somewhat disconnected from oil prices right now. We have some of the highest oil reserves we've ever had for this time of the year. We just can't refine it into gas fast enough to keep up with demand.

[Richard H]

Quote of the day from the article:

"If politicians truly wanted to bring down gas prices in California, they shouldn't spend their time looking for scapegoats in the oil industry, said Tom Kloza, a market analyst with the independent Oil Price Information Service in Wall, N.J.

" "Prices would drop significantly in a tight market like California if every motorist cut gasoline consumption by just 4 ounces by driving 4,000 yards less each day," he said.

" "Driving less is the answer. Everything else is a bit of nonsense at this point," Kloza said."

[CC]

What can the politicians do? As they blast the oil co's, the price of gas keeps rising for no other reason besides the desire to pull in more profit. The public needs to stop sending chain letters to not buy gas for a day and move towards using public trans alternatives, more carpooling, and biking to work. Yes, this keeps being said over and over, but perhaps with repetition, people will start changing their attitudes - nothing else seems to work.