Oil Watchdog

SACRAMENTO, CA — Democrats in the state Assembly on Thursday passed
legislation to boost oversight of oil refiners and study the practices of the gasoline industry, moves their Republican counterparts described as nothing more than political posturing.

Republicans said the bills would do little to lower prices at the pump.

The three bills were packaged as a comprehensive step to control
rising fuel prices, but most of the debate centered on traditional
philosophical differences. Democrats sought to impose more rules on the oil industry, while Republicans argued that government should stay out of the petroleum marketplace.

"This comes down to picking a side," said Assembly Speaker
Fabian Nunez, D-Los Angeles. "You stand with the oil companies or you stand with consumers."

Only Democrats, who hold a majority, supported the bills. One
Democrat, Nicole Parra of Hanford, voted against two of the measures.

"This will not result in any new supply. This will not result
in any new infrastructure built that will provide fuel to
Californians," said Assemblyman Chuck DeVore, R-Irvine. "What we have here is a political push to demonize an industry that makes it possible for Californians to fuel their vehicles."

The bills still need to be approved in the Senate before being sent to Gov. Arnold Schwarzenegger.

They would create a new state board to collect information about
oil refinery shutdowns, require refiners to report more operational
data and launch a statewide study to determine whether drivers are
getting less gasoline than they pay for during the hot summer months.

The Western States Petroleum Association, which represents oil
companies, opposes an oversight board. Such a body would merely
duplicate the work of the California Energy Commission and would do
nothing to bring more gasoline into the state, spokeswoman Anita
Mangels said.

"If you’re standing with consumers, you ought to be looking at
ways to bring more fuel supplies to them," she said. "We have this ever-widening gap between demand and supply, and these laws don’t do anything to address that."

Republicans blamed California’s stringent air quality standards
that make it more expensive to formulate the special blend of fuel sold in the state. They suggested relaxing environmental standards that mandate ethanol in California gas, reducing state gas taxes or giving refiners incentives to build more plants.

"We have standards in California that put us in a boutique
market," said Assemblyman Bob Huff, R-Diamond Bar. "Why don’t we think about standardizing environmental regulations with the rest of the nation?"

The average price for a gallon of gas in California is $3.21,
compared to the national average of $2.99, according to the American
Automobile Association.

DeVore also suggested creative ways that Californians might
avoid paying high prices at the pump. They could buy lower grades of
gasoline or fill their car in the morning when temperatures are at
their lowest, he said.

The latter idea was aimed at a bill by Assemblyman Mike Davis, D-Los Angeles, to survey the effect of temperature on fuel.

Fuel expands when temperatures rise, but most retail gas stations set their prices assuming gas is pumped at 60 degrees. That means Californians could be paying 3 cents more for every gallon for
so-called "hot fuel" when temperatures rise above 60 degrees and less gasoline flows into their tank. That costs motorists $480 million a year, according to a report by the Foundation for Taxpayer and Consumer Rights in Santa Monica.

In Hawaii, gasoline retailers are required to dispense fuel on
the assumption that it is 80 degrees, instead of the standard 60
degrees.

"This is a bill that takes a comprehensive and responsible
approach to determine whether California consumers are receiving all
that they pay for at the pumps," Davis said.

Read the bills, AB 868, AB 1552 and AB 1610, at: http://www.assembly.ca.gov