Page Address: http://www.contracostatimes.com/news/bayarea/stories_baybreak/oilpower_20010628.htm

Posted at 1:02 p.m. PDT Thursday, June 28, 2001

California oil refineries exempt from rolling blackouts By Karen Gaudette ASSOCIATED PRESS --------------------------------------------------------------------------------

SAN FRANCISCO -- Rolling blackouts will no longer be a threat to the oil refineries that produce more than a third of California's gasoline.

State power regulators voted unanimously to exempt the refineries and associated pipelines from the outages, ensuring a stable fuel supply and helping to keep gasoline prices from rising. The vote affects 13 refineries in Pacific Gas and Electric Co. and Southern California Edison territory.

Carl Wood, a member of the Public Utilities Commission, proposed the exemptions after a recent letter from Gov. Gray Davis asked the PUC to minimize disruption of fossil fuel production this summer.

The California Energy Commission said rolling blackouts could cause refineries to lose up to one week of production, which could create gasoline shortages and boost prices at the pump during the height of the summer driving season.

The order comes after four oil refiners -- Valero Energy, Tosco, Exxon Mobil and Equilon Enterprises -- petitioned for blackout exemptions at their facilities that produce about one-fourth of the state's refining capacity, about 2.3 million barrels a day.

The state's largest refiner, San Francisco-based Chevron Corp., bypassed the PUC and told Davis it would stop production at its two California refineries if regulators and state lawmakers did not protect it from blackouts.

Chevron controls about 18 percent of the state's refining capacity.

-- Martin Thompson (mthom1927@aol.com), June 29, 2001

Answers

Cheers! Better late than never! Retail gasoline prices in San Diego have remained high, not responding to the latest dip in NYMEx prices. Regular at the lowest price stations has remained high, at $1.859/gal., because of the lack of refinery blackout exemption and resultant CA preemptive refinery production slowdowns.

Now, local retail gasoline prices should return to closer to the national average. This means prices should decline unless and until Middle East or other problems raise prices for everyone.

-- Robert Riggs (rxr.999@worldnet.att.net), June 29, 2001.