Utah legislators seeking to lower the state’s at-the-pump tax on gasoline and diesel have proposed a controversial alternative: a tax of up to 24 cents on every gallon of transportation fuel produced at Utah’s five refineries. Given that one-third or more of that gasoline and diesel is piped or trucked (or sometimes railed) to neighboring states, the new tax would not only hurt refinery economics, it would also significantly raise the wholesale cost of Utah-sourced fuel in Arizona, Idaho, Nevada and Wyoming and likely lead to retaliatory legislation in nearby state capitals. In today’s RBN blog, we discuss the proposal and how — if it passes — the measure would impact Utah refineries, Uinta Basin production of waxy crude, and plans for piping more refined products to Las Vegas and Reno.
Utah is an energy powerhouse. It ranks among the top 10 states in crude oil production and, with five Salt Lake City-area refineries with a combined capacity of 209 Mb/d, it is the #1 producer of refined products in PADD 4 (Rockies) — #2 Montana has four refineries with 203 Mb/d of capacity. That makes Utah a primary supplier of gasoline and diesel not only to in-state wholesalers and retailers but to many of their counterparts in the four nearby states listed above. Generally speaking, about two-thirds of the ~115 Mb/d of gasoline and ~60 Mb/d of diesel produced at Utah refineries is consumed within the state. The balance is “exported” to Utah’s neighbors, with about 80% trucked to close-by Idaho and most of the rest sent on the UNEV Pipeline to Las Vegas. The balance is “exported” to Utah’s neighbors, with about 80% of it transported to Idaho either by pipe on MPLX’s Northwest Products System (NWPS) to Boise, Burley and Pocatello or by truck to southeastern Idaho, and most of the rest sent on the UNEV Pipeline to Las Vegas.
The Future of Fuels bi-annual report by RBN's Refined Fuels Analytics provides an in-depth analysis of the U.S. and global refinery industries, focusing on crude oil and fuel market dynamics, supply and demand, alternative fuels, refinery capacities, and price forecasts to help stakeholders navigate the evolving energy landscape.
With a national focus on “affordability” and the day-to-day economic challenges faced by many Americans, a few state legislators in Utah have been developing and promoting a proposal that would (1) lower the state’s 37.9-cent-per-gallon excise tax on retail gasoline and diesel sales (levied at the pump) and (2) establish a new tax of up to 24 cents per gallon on gasoline and diesel production at the state’s refineries. Our understanding is that the 24-cent refinery tax is designed to achieve revenue neutrality for Utah consumers after reducing the state's excise tax and to generate new revenue by applying the refinery tax on the 30% to 40% of the transportation fuels now shipped out of Utah.
Proponents of the Utah proposal theorize that their plan would reduce the tax burden on Utah gasoline and diesel consumers by enabling the state to receive at least some tax revenue from consumers in other states that depend on Utah refineries for their fuel. They estimate that the refinery tax, if approved and levied, would trim the retail cost of gasoline and diesel sold in Utah by 10 to 20 cents per gallon and save the average Utahn a few hundred dollars a year, all while maintaining current funding for state transportation projects.
That may seem all well and good, but there’s a long list of reasons why this one-of-a-kind legislation would have a significantly negative net impact, not just on Utah refineries but also on Uinta Basin production, plans to pipe more refined products to Nevada and, ultimately, on Utah consumers and the state’s reputation as one of the best places to do business. Next, we will discuss what we see as a few of the bill’s primary negatives:
Join Backstage Pass to Read Full Article
About the song
“Why Can’t We Be Friends?” is a hit single by the funk band War off their 1975 album of the same name. The song, written by the group, rose to #6 on the U.S. Billboard Hot 100 and #9 on the U.S. Billboard R&B chart. The personnel on the recording are: Papa Dee Allen (percussion and vocals), Harold Ray Brown (drums and vocals), B.B. Dickerson (bass and vocals), Lonnie Jordan (keyboards and vocals), Charles Miller (sax and vocals), Lee Oskar (harmonica and vocals), and Howard E. Scott (lead vocals and guitar).
“Why Can't We Be Friends?” has been used in a number of television shows, movies and commercials over the years. It was played in outer space when NASA beamed it to the linking of Soviet cosmonauts and U.S. astronauts for the Apollo-Soyuz Project. The Why Can’t We Be Friends? album also included the hit “Low Rider.”
War started as a world music R&B unit from Long Beach, CA. The group was discovered by producer Jerry Goldstein and singer Eric Burdon (The Animals) while playing at the Rag Doll nightclub in North Hollywood, CA, in 1969. Goldstein signed them to a management/production deal, and Burdon used them as his backup band for two albums. The first, Eric Burdon Declares War, yielded the big hit, “Spill the Wine.” Eric Burdon and War have the distinction as being the last band that played with Jimi Hendrix, as Hendrix joined them at their gig at Ronnie Scott’s club in London for a rousing jam on the song “Tobacco Road” the night before he passed away. War went off on their own in 1971 and released their first album (entitled War) the same year. The group’s most successful album was their fifth LP, The World Is a Ghetto, which went to #1 on the U.S. Billboard Album & R&B charts and yielded the hit singles “The Cisco Kid” and “The World Is a Ghetto.” The LP was listed as Billboard’s #1 album of 1973.
War has released 18 studio albums (Including the two with Eric Burdon), three live albums, seven compilation albums and 60 singles during their career so far. Lonnie Jordan, the only member from the original band, still tours with other musicians under the War name.
"About the Song" -- written by Mickey McMahan , RBN Director of Musicology
