BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1340
                                                                  Page  1

          Date of Hearing:  April 28, 2003

                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
                                 Sarah Reyes, Chair
                     AB 1340 (Kehoe) - As Amended:  April 9, 2003
           
          SUBJECT  :  Petroleum:  information reports.

           SUMMARY  :  Requires oil refiners and gasoline marketers to submit  
          weekly information to the California Energy Commission (CEC)  
          concerning imports, exports and refinery inventory levels.   
          Specifically,  this bill  requires an oil refiner, oil producer,  
          gasoline transporter, gasoline marketer, and storage facility  
          operator to submit a report to CEC each week providing  
          information on the inventory level at a refinery, amount of  
          gasoline imported and exported, and the amount of crude oil  
          imported.

           EXISTING LAW  requires major oil producers, refiners, major  
          marketers, major oil transporters, and major oil storage  
          facilities to supply to CEC each month certain designated  
          information regarding petroleum supplies.

           FISCAL EFFECT  :  Unknown.

           COMMENTS  :   

          Between January 1, 2003 and March 17, 2003, the statewide  
          average retail price of regular gasoline jumped 36 percent,  
          climbing from $1.58 a gallon to a record-setting $2.15 a gallon  
          on March 17, 2003 - an increase of 57 cents.  Californians  
          consume nearly 1.1 billion gallons of gasoline each month, so a  
          57-cent-per-gallon increase costs consumers more than $20  
          million per day.

          California enjoys significant refinery capacity.  At maximum  
          production, the state's refineries make more than 44 million  
          gallons of gasoline a day, but the state imports an estimated  
          100 million gallons of gasoline and blend stocks each month to  
          meet demand.

          This year's increase in gasoline and diesel prices is not unlike  
          similar events that occurred in 1999 and 2001.  What primarily  
          drove this year's increases to record-setting levels was the  
          unusually high cost of crude oil on the world market.  The price  








                                                                  AB 1340
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          of crude oil on the world market nearly doubled in the past year  
          due to market uncertainty about the threat of war in the Middle  
          East.  Other factors included an oil strike in Venezuela that  
          drastically cut supplies and a cold winter in the Eastern U.S.  
          that increased the need for heating oil. 

           Weekly versus monthly information.
          
          In a recent report to the Governor on gasoline and diesel price  
          spikes, CEC suggested among other things that it needs  
          information on a weekly basis from oil producers, refiners,  
          marketers, transporters, and storage facility operators.  This  
          bill gives effect to that recommendation.

          CEC noted that it must be able to track inventory levels at  
          terminals better as well as imports and exports of petroleum  
          products.  Because of the potential for significant impacts on  
          consumers, it recommends the petroleum industry voluntarily  
          submit requested information before CEC concludes its formal  
          adoption process for collecting the data.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          None on file.

           Opposition 
           
          None on file.

           
          Analysis Prepared by  :    Paul Donahue / U. & C. / (916) 319-2083