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Release of ‘winter-blend' gasoline could reduce prices in California

SAN FRANCISCO — State air pollution regulators said Monday that California’s air quality is not expected to worsen appreciably after the governor ordered the release of a dirtier blend of gasoline to help slash record-high pump prices.

Published: Oct. 9, 2012 at 12:05 a.m. PDT
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Traffic passes a Shell station displaying gasoline prices in the high $4 range Monday in Torrance, Calif. State air pollution regulators said Monday that California’s air quality is not expected to worsen appreciably after the governor ordered the release of a dirtier blend of gasoline to help slash record-high pump prices. (REED SAXON/THE ASSOCIATED PRESS)

SAN FRANCISCO — State air pollution regulators said Monday that California’s air quality is not expected to worsen appreciably after the governor ordered the release of a dirtier blend of gasoline to help slash record-high pump prices.

The California Air Resources Board issued a regulatory advisory a day earlier after Gov. Jerry Brown ordered them to allow so-called “winter-blend” gasoline to be sold in California earlier than usual to increase supply.

AAA said the average price for a gallon of regular hit $4.668 Monday in California – the highest price in the nation and an all-time high for the Golden State. Analysts said the spike has been driven by refinery disruptions and corrosion issues in an important pipeline.

“This action is necessary to address the extreme and unusual fuel supply circumstance,” said the board’s advisory allowing the use of the more polluting fuel. “(It) is necessary for the immediate preservation of the public peace, health and safety, or general welfare.”

California usually converts to the gas Oct. 31. The fuel evaporates in heat more quickly than summer blends, so it sends more pollutants into the environment, especially in warm weather.

Gil Duran, a spokesman for Brown, said the governor looked at all the options available, particularly scientists’ prediction that such a change would not have a significant effect on the environment, and “when he learned this could increase the supply by 8 to 10 percent, it just made sense.”

Sunday’s action was the first time since 2005 – when gas supplies were affected by refinery disruptions in the wake of Hurricane Katrina – that the air board has approved early conversion to winter-gas blends.

Officials said it could take days before prices fall, depending on how quickly refineries can get the winter-blend fuel to market.

The third day of record-setting prices at the pump has also prompted calls for a federal investigation.

Sen. Dianne Feinstein, D-Calif., called on the Federal Trade Commission to investigate, saying residents need to be protected from “malicious trading schemes.”

Spokesmen for the FTC in Washington didn’t immediately return calls seeking comment.

Feinstein in her letter Sunday asked the FTC to determine if the price spike was caused by illegal manipulation of the market and to start monitoring the market for fraud, manipulation or other malicious trading practices.

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