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 Page 2 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