Business

Calif. refineries export gas as prices continue to rise

Wednesday, February 29, 2012

Gas prices continue to climb -- the national average is now up 45 cents since the first of the year. In California, the price is up almost 60 cents in a month. It's selling for $4.37 in San Francisco, and $4.39 on the central coast.

Gasoline consumption is down in California, but we're exporting a lot of it.

California refiners will tell you that drop in consumption is what pushes them to look for markets elsewhere and that those exports have nothing to do with what we pay here.

While Californians pay near record prices at the pumps, California refineries are shipping tens of thousands of barrels of gasoline out of the state and the country every day.

"Anything they do here they ought to keep here, not sell it to other countries and drive the price up," consumer Pat Linsday said.

According to the California Energy Commission, last year the state's refineries produced an average of 1,055,000 barrels of gasoline per day. Of that, 110,000 barrels, or more than 10 percent, was exported to other states and countries.

That, as prices in California continue to skyrocket.

"There really isn't a connection between the export of fuels out of this market or the United States for that matter and the price of gasoline right now," Western States Petroleum spokesperson Tupper Hull said. "The supply and demand balance, dynamic that's impacting gas prices has to do with the cost of crude oil."

Of the California gas exported to foreign countries, 67 percent goes to Mexico, 25 percent Canada, and 5 percent Ecuador. 92 percent of the California gas headed to other states goes to Oregon, where the price of a gallon of unleaded is 40 cents cheaper than here.

"If they were forced to keep all their product in the state, in the very short run we'd see a glut of gasoline, and they'd be less inclined to expand their refinery," Severin Borenstein, a professor at UC Berkeley, said.

And that means some California refinery workers could lose their jobs.

Still, some consumers aren't buying the idea that letting California gas flow out of California is a good thing.

Again, the refiners say what drives gas prices in California is the price of crude oil on the world market and though California may produce more gasoline than it needs, the state generates less than half of the crude oil it uses.

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gas prices, business, laura anthony
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