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-- continues in California tonight over the past week fuel prices in the Golden State at jumped more than 55 cents reaching historic -- Now the average price for a gallon of regular unleaded is at 467.
-- bears to the national average of 382.
The reports of the it's going so -- -- to siphon gas for rental car lots in ordered to beat prices that are rising so fast.
What's the reason -- -- -- pilots that's -- prices senior fellow at the Manhattan institute Robert it is always a pleasure to see you what is going on here mr.
If there will limit and there -- -- in a word Gerri it's balkanization.
The problem is that California has a boutique blend of fuel that's unique to California.
And there was a refinery outage and because of that -- that that limited.
Pool of gasoline that's -- only to be used in California prices are soaring and the problem is not unique necessarily to California.
But it's hit hit being hit very hard because of -- boutique blend of gasoline.
Well let's break this down a little bit starting with the refineries we have the Torrance refinery power outage the Richmond -- -- it refinery that caught on fire in his down.
And I read recently.
That over the last two decades for refineries in California shut down rather than invest an expensive upgrades to comply with regulations so.
When you start with a finite number of refineries fourteen which is what I read is what they have and California.
And you -- a -- it's a very big deal.
Well of course and and this problem though -- is is what -- it is it recurring now.
In a word -- and very short it's a Clean Air Act.
Of the EPA has allowed various regions of the country to prescribe.
Specific blends of gasoline and the problem now is that.
We have the most balkanized fuel market in the world.
We have something on the order of four dozen different gasoline blends -- nationally by some counts it's up to seventy.
Why is that a problem why doesn't matter.
How hard can it be to blending -- this gas.
It because there is a specific plan for California so now there -- -- a shortage of of gasoline in California.
There were there wouldn't be a shortage of that same -- was being used in Oregon Washington Utah and Nevada they can easily import the gasoline that they need.
But because of rules that are allowed under the EPA in the Clean Air Act California is essentially an island to itself.
When it comes in these specific blends of gasoline.
And it could get worse if California goes ahead with a low carbon fuel standard which it appears that they will.
Well I was just gonna say you know if you think they're a lot of regulations now just wait boy having more coming.
We've got cap and trade the goes into effect in November and that oil companies -- -- trying to pass increased costs of that right on the consumers.
And there's a low carbon fuel standard 20512.
-- do to prices to people who want to drive a car in the state of California.
Well it's going to be an a dramatically more expensive I just.
Was looking -- the Oil Price Information Service jury is estimated.
The low carbon fuel standard will -- will likely raise gasoline prices in California by a dollar fossil prices could be could be and -- increased.
By as much as two dollars and member -- Diesel is used for the delivery of virtually everything we use show.
Again another problem in California for their overall economy is -- this this process -- whereby they're making all forms of energy more expensive.
-- this ripple through to the rest of the country I'm always wondered wondered about how these problems in California and goodness knows they've got a lot of trouble out there.
How did it hits other people.
Well that remains to be seen I think you know California.
I I live in Texas so you know we'd we'd like to make fun of people in California -- Remember this is one of the big.
It's -- sure you sort of that it's one of the biggest economies in the world -- memory serves ninth -- tenth largest economies if it were standalone country.
So you're going to see huge economic.
The impacts on California jobs leaving this state but of course is going to -- sort of the rest of the country because California is is a Bellwether for the rest of the country and unfortunately.
And when it comes to energy policy what we've seen over the last four years our policies that imitate what the Californians have been doing.
Agreed to allow refineries to make that cheaper winter -- earlier is that yes all the trouble does that mean it's over.
Well it had no I don't think it does mean it's over because again.
As you pointed out earlier -- very very few refineries that can meet these boutique blends.
That are unique to California and again you have this really a perfect storm on the horizon with.
Cap and trade and with a low carbon fuel standard I think this is really just the beginning of problems for the California motor fuel market.
Copper prices always a pleasure to have you wanna -- and anytime you wanna make money Californians just call me right -- but I.
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