California governor orders emergency gas switch

SACRAMENTO, Calif. Oct. 7, 2012 (LID) – Amid spiking gasoline prices in California, Gov. Jerry Brown (D) on Sunday ordered air-quality officials to allow sales of winter-blend gasoline this month.

Brown

The governor’s order to the California Air Resources Board (CARB) will bring to market winter-blend gas more than three weeks earlier than scheduled, in a move intended to calm a nearly week-long scare in California’ wholesale gasoline market that has sent prices at the pump soaring.

AAA reported the statewide average price for a gallon of regular unleaded gasoline was $4.655, up nearly 50 cents per gallon in six days. The national average this weekend was about $3.81 a gallon, according to AAA’s Daily Fuel Gauge report.

Brown said the state’s soaring fuel prices threaten “significant economic disruption, and serious harm to public safety and welfare.”

Rolling out the blend ahead of the previously scheduled Oct. 31 release will boost gas supplies in the Golden State by up to 10 percent, with “only negligible air quality impacts,” he added.

California law requires a special blend of cleaner-burning gasoline for summer months to help maintain air quality. Winter-blend gasoline, which evaporates more quickly, is not used during the smog season, officials said.

Panic hit the state’s gas market amid shutdowns last week at Tesoro Corp. (NYSE:TSO)and Exxon Mobil Corp. (NYSE:XOM) refineries.

Already, gas supplies had been strained by last week’s closure of a Chevron Corp. (NYSE:CVX) crude pipeline from the Central Valley to the East Bay, and closure of Chevron Corp’s refinery in Richmond from an Aug. 6 fire.

The ExxonMobil refinery has resumed operations; the Tesoro refinery in San Pedro is expected to resume production next week, after maintenance, officials said.

As gas prices skyurocketed last week, the California Independent Oil Marketers Association (CIOMA) and the California Service Station and Auto Repair Association (CSSARA) urged state regulators to allow so-called off-spec gasoline sales and manufacture to alleviate market pressures and possible disruptions.

“We are receiving numerous reports of unbranded fuel shortages, or outright unavailability, especially in the southern California region,” Jay McKeeman, vice president of government relations and communications at CIOMA, wrote in a letter Thursday to CARB and the California Energy Commission.

“We are unclear as to what exactly is causing this problem, but it appears technical difficulties at several California refineries, in conjunction with tight U.S. supply of gasoline, is contributing to short fuel supplies,” he wrote.