California Speaker of the Assembly to Announce Package of Bills Tomorrow on Refinery Practices and Gasoline Prices

[courtesy of California Progress Report]

By Frank D. Russo

A spokesperson for Assembly Speaker Fabian Nunez has been quoted in the press saying that Nunez will propose a package of bills tomorrow to deal with rising gasoline prices in California. This will include new standards for when oil companies in California can shut down refineries for maintenance and a new board that would adopt and enforce refinery maintenance schedules.

Bloomberg News has the breaking news in an article that is somewhat sketchy about the details of the legislative package, but the Foundation for Taxpayer and Consumer Rights (FCTR), which has been critical of the failure of the Governor and legislature in the past on this issue and has been focused on oil price market manipulation, issued a statement that the Speaker is on the right track.

Judy Dugan research director of FTCR and their blog, OilWatchDog.org, referenced the manipulation of the California electricity marketby Enron and others and put the current gasoline price spike in that historical context. She noted that as in the 2001 power crisis, it is restriction of gasoline supply that is raising prices—and refinery profits--to record levels.

She said:

“Speaker Nunez is taking the right path in treating refiners more like utilities and putting some state oversight on their shutdowns--just as much of California’s 2000-2001 electricity crisis could have been avoided if the state had taken some control over power producers. Obviously this idea needs to be carried further, to include regulatory prods for expansions of capacity, and for maintenance of more days of supply, but at least the silence in Sacramento on gasoline prices has been broken.”

“Oil companies will certainly complain that the slightest interference with maintenance schedules will endanger refinery safety and cause all manner of disastrous effects. That's an argument to extend regulatory control far enough to fix the underlying capacity and supply problem, not a reason to back off of immediate oversight. We hope Nunez will stick to his guns and view this as only a beginning.”