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California's Gas Price Premium Has Never Been Higher, Here's Why

Tyler Durden's picture




 

California's gasoline price premium to the rest of the nation is the highest on record, according to Bloomberg data. This, as OilPrice's Andy Tully notes, is in large part because an Exxon Mobil Corp. refinery in Torrance has been out of commission since an explosion there in February, and the state’s environmental regulations are hampering the company’s efforts to quickly get it back to full production. This situation is not expected to improve by year-end.

 

 

The refinery is now operating at under 20 percent of its potential, mostly because the explosion damaged its two pollution control units, according to Mohsen Nazemi, the deputy executive officer for engineering and compliance of California’s Sourth Coast Air Quality Management District.

ExxonMobil has sought permission to use a previous model of the unit until the newer version can be installed, but was denied because the older unit emits between two and six times more greenhouse gases than the newer model, which would violate state regulations. To use the older equipment, he said, the company would need to show the state that it can contain offset these increased emissions.

In the meantime, ExxonMobil is working to repair the newer pollution control units by replacing about 1,300 plates that trap the emissions, which are made of a fine dust. “That’s not going to happen next week or next month,” Nazemi told the Los Angeles Times. “You’re probably looking at the end of the year.”

This means only higher gasoline prices for Southern Californians at a time when motorists in much of the rest of the United States are benefiting from bargains at the pump due to the plunge in the average global price of oil during the past year.

At one point last week, drivers in Los Angeles County were paying an average of $4.24 per gallon for regular gasoline, an increase of 69 cents from the previous week and 57 more than the average price in June. The same is true in neighboring San Bernardino County, with regular gasoline selling for an average of 63 cents more than the previous week and 51 percent over June’s average.

And these are just average prices. Several service stations in the city of Los Angeles were selling regular gas at $4.99 per gallon, and one had a cost of $5.29 per gallon.

The highest costs are in Southern California, while the northern part of the state is suffering much less, according to Allison Mac, an analyst with the fuel-tracking website GasBuddy.com. “[Northern California] prices have gone up maybe 15 to 20 cents a gallon,” she told the San Gabriel Valley Tribune, “but [in Southern California] we’ve gone up over 60 cents at the same time.”

ExxonMobil’s Torrance refinery isn’t the only reason for the higher gasoline prices, according to Marie Montgomery of the Automobile Club of Southern California. A refinery in Carson California outside Los Angeles owned by the Tesoro Corp. of San Antonio, Texas, also is offline for annual maintenance, she said.

And then there’s the pipeline breach in Santa Barbara County on May 19 that interrupted the flow of ExxonMobil oil to refineries in Southern California, amounting to 150,000 barrels of crude per day. ExxonMobil filed an emergency application to have trucks move the oil until the pipeline is repaired, but the request was denied on the grounds that the situation wasn’t an emergency.

This led ExxonMobil to shut down production at three offshore oil platforms until the flow can resume.

 

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Tue, 07/21/2015 - 13:21 | 6337684 BlindMonkey
BlindMonkey's picture

Oil producers are channeling the ghost of Ken Lay.

Well done CA.

Tue, 07/21/2015 - 13:38 | 6337716 greyghost
greyghost's picture

well well well it's all the state regulators fault. exxon mobil allowing their source of income to blow sky high and catch fire doesn't show "GROSS MISMANAGEMENT". the shit from oilprice just keeps on coming.....

"GROSS MISMANGEMENT" by exxon mobil with the offshore leak along the coast also! has anybody lost their job at exxon over such gross lack of oversite and responsibilty?

big business american style....all about the extraction of money with no regard for the long term company health.......how much can management extract????

Tue, 07/21/2015 - 14:19 | 6337983 Creepy A. Cracker
Creepy A. Cracker's picture

The gubmint makes roughly FOUR (4, quatro) times MORE PROFIT per gallon of gas than the eeeeeeeeeeevil Big Oil.  Big Oil has to produce a product that people want for that money.  Gubmint pays off their union voters with their PROFIT then borrows money to do road repair once the holes start swallowing cars.

Tue, 07/21/2015 - 14:29 | 6338063 0b1knob
0b1knob's picture

Doesn't that price include the special 10 cent/ga. global warming charge?

http://dailycaller.com/2015/01/07/ca-imposes-a-global-warming-tax-for-fu...

 

Tue, 07/21/2015 - 14:46 | 6338134 Creepy A. Cracker
Creepy A. Cracker's picture

Well, we are regularly told by the Globalwarmist religious fanatics that drastically higher taxes and suffocatingly high government control over people's lives will cool the planet.  Cold planet, here we come!

Tue, 07/21/2015 - 15:58 | 6338465 Theosebes Goodfellow
Theosebes Goodfellow's picture

$3.89 for regular unleaded at the indian res. gas pumps yesterday. Midgrade and up over $4. In town, nothing under $4.10. And these liberal asshats think tthe are saving the planet.

Ruck me funning.

Tue, 07/21/2015 - 13:24 | 6337697 JustObserving
JustObserving's picture

In a rigged game, the refiners always win and consumers always lose.

Now if you could buy a few politicians like Exxon Mobil can ...

Tue, 07/21/2015 - 13:32 | 6337730 knukles
knukles's picture

Big Energy has Sacramento Bought and Paid for.

Tue, 07/21/2015 - 15:50 | 6338430 Bay Area Guy
Bay Area Guy's picture

Correction.....Big (insert name of industry) has Sacramento bought and paid for.

I don't believe the governor or the legislators have ever met an industry they didn't accept huge "campaign donations" from and then tailor legislation for them.

Tue, 07/21/2015 - 16:44 | 6338628 Excursionist
Excursionist's picture

Said it many times before, but this warrants repeating:  California voters are so, so very fuckin' stupid.

Tue, 07/21/2015 - 14:22 | 6338011 Creepy A. Cracker
Creepy A. Cracker's picture

"In a rigged game, the refiners always win and consumers always lose."

If you don't like it don't buy their product.  It's not that hard.  Really... It's not.

Tue, 07/21/2015 - 16:08 | 6338383 marathonman
marathonman's picture

I wonder what restrictions CA has placed on direct imports of finished gasoline.  On the US Gulf Coast the export markets are the life line that the refiners have been using to keep making (tons of) money.  Why not directly import gasoline and diesel to bypass the CA refineries?  At a dollar/gallon differential Gulf Coast refiners should be salivating to put that product on boats and get it to LA, SD, SF, Portland, and Seattle.  Maybe I should put together a business plan....

Edit:  A few years ago the LA Times published an article about why the gas prices were so high.  'It would help if we could import refined gasoline from other parts of the country. But California’s gasoline formula requirements and isolation from pipeline infrastructure make that tough to do.'  http://graphics.latimes.com/towergraphic-fi-gas-fix/  Turns out CA more or less did it to themselves.  Ha Ha Ha Ha Ha Ha HA!!!!!  I love that freaking place.  Priceless.

Tue, 07/21/2015 - 16:13 | 6338529 marathonman
marathonman's picture

Of course no one has yet mentioned the Federal Reserve's role in creating so much freaking debt to save the bankers in the 2008 financial crisis and the QE program that debased the global reserve currency.  That 'money' was by no means 'free'.  It had real life consequences.  Suck it CA.  Booyah!

Tue, 07/21/2015 - 16:19 | 6338544 Oilwatcher
Oilwatcher's picture

Yes, California has extra-special blend requirements that effectively make it a gasoline supply island.  You can't just import regular gas from other parts of the country.  I paid $2.49 for regular on a trip through Oklahoma last week.  Diesel was only a dime more, first time I can recall seeing diesel under $3 a gallon since I bought my F350 8 years ago .... :-)

Tue, 07/21/2015 - 13:24 | 6337698 Dr. Engali
Dr. Engali's picture

Why is it that I don't feel a bit of remorse for Commiefornia? 

Tue, 07/21/2015 - 14:30 | 6338070 enforcer92677
enforcer92677's picture

I'm still two maybe three years out from moving my family out of the state. 

 

But even while I still live here I feel just like you do.  Every single effed up wrong thing that happens here just proves my decision is the right one.  Can't wait until move day!

Tue, 07/21/2015 - 14:37 | 6338105 froze25
froze25's picture

Look at the State of Maine, very self sufficient people and great demographics.

Tue, 07/21/2015 - 15:03 | 6338210 combatsnoopy
combatsnoopy's picture

Because before the hard drug smoking, draft dodging warmongering non-materialistic flowerchildren real estate flipping baby boomer trash fucked it entirely to hell, there were other ways to make money outside of the oil business and generational theft?  

The country's largest agriculture is in California.

The world's best University for research is Cal Tech.  Cal Tech beat out Princeton, Harvard, Yale and Stanford several years in a row.

Los Angeles County has at least 9 known Universities.  Many Law Schools (USC, UCLA, Pepperdine, Marymount Loyola), Med Schools (Clairemont McKenna, UCLA, USC...), I graduated from a Big Ten so I'm not impressed with the business curriculum...UCLA researchers have already converted lipo fat into bone.  I wonder where the deep south INCLUDING LOYOLA and Ross are on these developments.   Or are they still playing race wars?  

169 dialects are spoken in Caliofrnia.

Scripps Hospital in San Diego. 

Boron mine, gold and copper mines....oil.

You don't feel a bit of remorse because you haven't learned how to value anything.  Like the rest of the U.S. who only chose to f* it up so they can play La Raza Melrose Place for neo Skin heads and other ugly obese individuals the world can do without.  This is what the liberal carpet baggign gold diggers brought to our door step.

Yours Truly,

A 4th Generation Native of San DiEggO

 

 

Tue, 07/21/2015 - 15:10 | 6338240 TimmyB
TimmyB's picture

You don't feel remorse because you are an asshole. Oil is the most manipulated market on the planet. People in California, where there are oil wells and oil refineries, pay much more after taxes for gas than places where there are no wells or refineries. How is that right, you smug asshole?

Maintenance on refineries that just happens to coincide with peak driving season? Bullshit. Why haven't prices risen in Oregon, Washington, Nevada or Arizona? Do they have oil wells and refineries? No they don't. So,how can they get cheap,gas, and California can't?

Tue, 07/21/2015 - 15:36 | 6338304 Dr. Engali
Dr. Engali's picture

Thank you very much. That's not the first time I've been called an asshole, I was worried I was becoming soft in my old age. As for commiefornia, it couldn't happen to a better fucking place. Just about every fucked up policy that continues to drag down this country emanates from that fucked up state. Why are you worried about oil prices anyway? It's liberals like you who are always screaming about the evils of driving while you have one of the largest carbon footprints in the world.

Tue, 07/21/2015 - 16:04 | 6338493 Miffed Microbio...
Miffed Microbiologist's picture

You'll get no asshole label from me Dr. but believe me many of us here a extremely pissed off what has happened to our state in the past 30 years. I know we are now the joke of the nation when we were the envy.

What you may not realize is we are the bum magnet of the USA as well as Mexico so the fucking idiots of your state find a nice home here much to our dismay. I notice California Native bumperstickers are very rare now vs the " Coexist" on the numerous Priuses.

The beauty of this is when the Big One hits, the congregation of idiot assholes living on the coast may fall en masse into the sea. May we all breathe in a collective sigh of relief.

Miffed

Tue, 07/21/2015 - 15:57 | 6338461 marathonman
marathonman's picture

Chief, I can assure you they don't intentionally try to blow up their own refineries.  The people working there have every incentive not to do that.  Sometimes though, even through the best (or lousiest as the case may be) efforts of men, stuff happens.  http://www.nbcnews.com/nightly-news/video/explosion-rocks-exxonmobil-refinery-in-torrance--california-401131075709

Tue, 07/21/2015 - 18:48 | 6339155 TimmyB
TimmyB's picture

Blow them up? Of course not. Shut them down permanently? Yup, two of 20 California refineries (10%) were permanently shut down since 2010. Schedule "maintence" during the time of year with the most driving? Yup. And after one accidently explodes, drag your heels repairing it. Too perfect.

Tue, 07/21/2015 - 16:57 | 6338692 Excursionist
Excursionist's picture

Lighten up, Timmaaaay!  No new refineries have been built in California for decades because of idiotic and overly onerous / uneconomical regs, which have been instituted by elected officials and their appointees, who in turn were put into office by voters who can't seem to think more than one move ahead.

And the voting public is the victim when the ensuing oligopoly possibly colludes via dubious tactics like scheduling facility maintenance during peak driving season?

Nope.  Not buying it. 

But the tragedy is that here in Orange County, which is solidly pro-business and small government, we're being hit pretty hard.  Just wish all the truly smug assholes in NorCal who want to legislate into existence clean air, unicorns and rainbows above every domicile would be hit equally hard to reap what they've sown.

Tue, 07/21/2015 - 19:03 | 6339226 TimmyB
TimmyB's picture

Gasoline consumption in California has dropped over a billion gallons a year to 14.6 billion since 2005. Two refineries have closed since 2010 Seems kinda stupid to build more refineries when oil companies are selling less refined oil, but what do I know? If you want to let Exxon know you wouldn't mind if they built a new refinery next door to your home, go ahead.

Tue, 07/21/2015 - 13:27 | 6337708 Fun Facts
Fun Facts's picture

CA is a failed state.

Radioactive too.

Tue, 07/21/2015 - 14:13 | 6337948 Government need...
Government needs you to pay taxes's picture

CA is becoming the repository of some of the world's greatest pollution hits.  Coal dust blown in daily from China, radioactive death from Japan (sea, air, land, just like the SEALs).  And I just keep laughing about all the loony 'environmental' taxes out there.  Guess what, bitches?  Unless you can tax the Chinese and Japanese, nothing else matters.  

Tue, 07/21/2015 - 15:08 | 6338228 combatsnoopy
combatsnoopy's picture

"CA is becoming the repository of some of the world's greatest pollution hits."

RAW SEWAGE FROM TIJUANA FLOWS UP TO IMPERIAL BEACH AND LA JOLLA SHORES.  https://www.hcn.org/issues/40.17/leaky-border/TJRiver011205.jpg/image 

It has been going on since 2000 that I personally know of.  The talking heads talk as if this is a recent incident from a "Spill".   

Tue, 07/21/2015 - 13:29 | 6337715 starman
starman's picture

"liberaly" priced for the liberals! Enjoy!

Tue, 07/21/2015 - 13:35 | 6337743 disabledvet
disabledvet's picture

Sad to see Tesla down on the news actually.

Sure sounds like a good selling point for going all electric I guess.

"Especially INSANE MODE."

They're rich out there so I'm sure they'll figure it out.

Tue, 07/21/2015 - 13:37 | 6337755 mpyre
mpyre's picture

The EPA cadres feel high gas prices will cause people to migrate to sustainable alternatives over time, (you know, bikes etc.) to the benefit of all! And I think they're right! Really!

Tue, 07/21/2015 - 13:59 | 6337879 Scooby Doo
Scooby Doo's picture

right.  Let's have UPS, FEdEX, garbage haulers all use bikes!  USPS delivers for you...whatever they can haul in the basket. EMT's can use a bike with a trailer to get the wounded to the ER.  Just in time inventory...Walmart could hire a lot of folks to get that product to the store - lower unemployment & healthier to boot. Why not?  To the benefit of all!  /s

Tue, 07/21/2015 - 14:11 | 6337942 Winston Churchill
Winston Churchill's picture

USPS was deluivering by bike, hauling a trailor, at Xmas.

OK, not really, it was a golf cart,seriously.Funny as hell.

Tue, 07/21/2015 - 14:31 | 6338078 Scooby Doo
Scooby Doo's picture

USPS would need sled dogs to deliver at XMas here but then PETA would get very upset with them. Can't win....

Tue, 07/21/2015 - 15:32 | 6338357 mpyre
mpyre's picture

just kidding!

Tue, 07/21/2015 - 13:38 | 6337761 Gold N Glocks
Gold N Glocks's picture

Enviromental wackos are just one of the many cancers infecting California.  Eradicate them and their liberal enablers along with all their fellow travelers and maybe CA has a chance.  Of course we also need to take care of the wetback problem but with most of the lawns being ripped out or just dying off, a good portion of that problem is self deporting er, uh I mean correcting =)

Tue, 07/21/2015 - 14:20 | 6338003 drendebe10
drendebe10's picture

"Government is not the solution to our problem.  Government is the problem."    Ronald Reagan, former governor of the state of Californicate

Tue, 07/21/2015 - 14:39 | 6338114 froze25
froze25's picture

Cali used to be like Texas, then immigration was reformed (deformed) in the 1950's  then the 1960's happened and it was all down hill.

Tue, 07/21/2015 - 19:25 | 6339314 TimmyB
TimmyB's picture

Thank God it's not today..

Tue, 07/21/2015 - 14:44 | 6338140 Black Warrior W...
Black Warrior Waterdog's picture

Sadly, there aren't enough of us that believe this anymore.

Tue, 07/21/2015 - 15:11 | 6338245 combatsnoopy
combatsnoopy's picture

Environmental wackos are just political actors and plants hired by big oil financed PR firm.

"Enviromental wackos are just one of the many cancers infecting California."

THey took the word "gullible" out of the Merriam Webster Dictionary.  Go look it up.  

Tue, 07/21/2015 - 23:36 | 6340214 MisterMousePotato
MisterMousePotato's picture

"THey took the word "gullible" out of the Merriam Webster Dictionary.  Go look it up."

I'm a little embarrassed to admit this, but I almost did.

Tue, 07/21/2015 - 13:41 | 6337782 youngman
youngman's picture

This is perfect for California..why not shut down all the refineries...that will be better for them...who needs to drive in California anyway...lol....think of how much money they can save on interstates and highways...lol...they get what they vote for..

Tue, 07/21/2015 - 14:26 | 6338044 Deathrips
Deathrips's picture

Voting works now? I got to keep up with the times.

 

RIPS

Tue, 07/21/2015 - 13:43 | 6337796 44_shooter
44_shooter's picture

but the weather is so great

Tue, 07/21/2015 - 13:46 | 6337807 WTFUD
WTFUD's picture

Time for Buffett's fast ( to leave the track ) trains.
GM are a graveyard in China at the moment so why not commandeer their employees to build a brand new high speed rail link between the Shales and CaLiForniA and kill 2 birds with one stone by shipping some fresh water in the process. Win/Win s/c

Tue, 07/21/2015 - 13:57 | 6337863 PGR88
PGR88's picture

The socialist state is the regulatory, crony-capitalist and political-insider state.  Only fools believe it is about "fairness" or "equity"

Tue, 07/21/2015 - 14:40 | 6338119 froze25
froze25's picture

Fools that want to get their hand in your pocket.  I call them thieves.

Tue, 07/21/2015 - 14:00 | 6337883 H H Henry P P P...
H H Henry P P P Paulson's picture

When oil prices drop considerably, it's tta be the California strategy to sabotage a major refinery and reduce production, that way gas prices stay high and more tax dollars are stolen.

Tue, 07/21/2015 - 14:12 | 6337949 Jack Daniels Esq
Jack Daniels Esq's picture

And all the Tesla Bitchez have their dildos set on high

Tue, 07/21/2015 - 14:43 | 6338132 Black Warrior W...
Black Warrior Waterdog's picture

Oil under $50/barrel and I'm paying $3.79/gallon.

Fuck this.

Tue, 07/21/2015 - 14:54 | 6338185 TXSOONER
TXSOONER's picture

Cali is so f..ked up. I say we pull all pipelines/refineries outta there and let them go back to riding horses. Stop shipping paper as well. Let them use tree bark. Many may already do.

Tue, 07/21/2015 - 14:55 | 6338188 stock market loser
stock market loser's picture

I live in orange county and after the rain I looked at my car. The rain drop deposits on my roof were all black. Acid rain compliments of China. 

Tue, 07/21/2015 - 15:35 | 6338369 btdt
btdt's picture

put the LEAD BACK in.. or is it lead in the back?

Tue, 07/21/2015 - 16:04 | 6338492 cheech_wizard
cheech_wizard's picture

My question to the remaining non-liberal California residents is as follows:

What the fuck are you still doing there?

 

Tue, 07/21/2015 - 17:23 | 6338794 R19
R19's picture

As I posted on the other article about Fuckland, CA, I do business here.  OTHERWISE, I would be in Texas, Florida or somewhere in the Southest, helping those with the right views save their way of life. California is soooooo fucking gone it's unbelievable.  The state is run by clueless morons.

Tue, 07/21/2015 - 18:07 | 6338960 cheech_wizard
cheech_wizard's picture

I got out just in the nick of time before the housing bubble burst. I found my greater fool.

Wed, 07/22/2015 - 01:27 | 6340383 Chuck Walla
Chuck Walla's picture

My question to the remaining non-liberal California residents is as follows:

What the fuck are you still doing there?

Stuck in traffic.

FORWARD SOVIET!

Wed, 07/22/2015 - 10:55 | 6341361 Everyone is lying
Everyone is lying's picture

The leftists are cancer, simply cancer.

When left untreated, the cancer grows.

California is Stage 3 right now, and still unwilling to admit it is even sick.

The crash will be harder than anyone expected, but will it affect the illegals?  What, even the illegals?  SOMEBODY DO SOMETHING!!!!  WE NEED FEDERAL MONEY!!!!!  SAVE US, LORD OBAMA!!

 

 

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