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Costco members fill up with discounted gasoline at a Costco gas station in Van Nuys, Calif., Friday, Oct. 5, 2012. Californians woke up to a shock Friday as overnight gasoline prices jumped by as much as 20 cents a gallon in some areas, ending a week of soaring costs that saw some stations close and others charge record prices. (AP Photo/Damian Dovarganes)
In California, dirty gas could reduce prices

Fuel » Amid record prices, shortages, state releases ‘winter blend’ to preserve ‘public peace, health and safety.’

First Published Oct 08 2012 10:09 am • Last Updated Oct 08 2012 09:56 pm

Los Angeles • 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 after Gov. Jerry Brown ordered them to allow so-called winter-blend gasoline to be sold in California earlier than usual to increase supply.

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AAA said the average price for a gallon of regular gasoline in California hit $4.67 Monday — 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 in 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 on Oct. 31. The fuel evaporates in heat more quickly than summer-blends, so 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 percent 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 gasoline market moves on news, and this is clearly good news in terms of supply, because it should be able to increase supply immediately," said Alison apRoberts, a spokeswoman with the California Energy Commission.

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


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Sen. Barbara Boxer, D-Calif., on Monday asked the Department of Justice’s oil and gas price fraud working group to look into whether maintenance issues at refineries were being used as an excuse to drive up energy prices.

Boxer’s request came a day after Sen. Dianne Feinstein, D-Calif., called on the Federal Trade Commission to investigate, saying residents need to be protected from "malicious trading schemes."

FTC Chairman Jon Leibowitz said the agency does not confirm investigations "but we do have enormous respect for Sen. Feinstein."

Despite a pipeline and refinery shut down, she said, state data shows gas production last week was "almost as high as a year ago, and stockpiles of gasoline and blending components combined were equal to this time last year."

In some locations, fuming motorists paid $5 or more per gallon, while station owners had to shut down pumps in others.

A station in Long Beach south of Los Angeles had California’s priciest gas, at $6.65 for a gallon of regular, according to GasBuddy.com. Customers at an outlet in San Pablo north of Oakland paid $3.49, the lowest.

Winter-blend gas typically isn’t sold until November, when cooler temperatures allow for its use while maintaining federal and state air quality standards. Few refineries outside the state are making summer-blend gas, putting the pressure on already-taxed California manufacturers.



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