February 19, 2015 – Reuters
No easy fixes for California's isolated fuel market
By Rory Carroll
Feb 19 (Reuters) - The explosion that shut a major Los Angeles oil refinery on Wednesday sent shockwaves through the local gasoline market, sparking higher prices, largely because California's fuel infrastructure is isolated by geography and environmental rules.
Despite the shortage of easy fixes for a state that is seeing fewer refineries provide gasoline for millions, analysts believe pump prices will remain steady due to healthy stockpiles.
Read the full story here: http://www.reuters.com/article/2015/02/20/refinery-blast-california-idUSL1N0VT0FH20150220
NO EASY OPTIONS
California could build pipelines to other states to diversify its supply options, but Schremp said there is little interest on the part of energy companies to do that.
The idea of building a pipeline connecting Texas to California was floated and "no one wanted to do it," he said.
Bringing gasoline by ship to the state is complicated, as it would require the changing of a longstanding federal law barring non-U.S.-built vessels from carrying gasoline from one American port to another. Gasoline can also be imported from Asian countries.
That law, known as the Jones Act, raises the price of moving fuel from a refinery in the Gulf of Mexico to California by three to four times more than it would be if foreign ships could be utilized, said Sandy Fielden, an analyst with consulting firm RBN Energy which provides information and analysis for energy market participants. As a result, while Valero Energy Corp's Corpus Christi, Texas, refinery can produce California-grade gasoline, it rarely ships to California because of the cost of transport.
