BILL ANALYSIS 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
AB 2685 - Oropeza Hearing Date:
June 22, 2004 A
As Amended: June 10, 2004 FISCAL B
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DESCRIPTION
This bill makes numerous findings and declarations, including:
Californians use more than 18 billion gallons of motor vehicle
fuel a year.
Gasoline demand will increase by 1.6% a year and diesel demand
will increase 2.4% annually until 2020.
California refineries are operating at near capacity and
California is importing more transportation fuel every year.
California gasoline prices are among the highest in the
country;
This bill requires the Governor to launch a public education
campaign about reducing demand for gasoline and diesel fuel.
The campaign shall include, but not be limited to, information
about tire inflation, auto maintenance, public transit,
carpooling, and motor vehicle route planning.
BACKGROUND
Concern over high gasoline and diesel prices has recurred for
many years. California experienced gasoline and diesel price
spikes in 1996 ($1.50/gal), 1999 ($1.60/gal), 2000 ($1.80/gal)
and, once again, in 2004 ($2.20/gal). Each price spike results
in investigations and new ideas, though no California
investigation has found criminal activity. The gas price spikes
in 2000 led to several new ideas and analyses. Ultimately the
new ideas (building a pipeline to Texas and creating a state-run
gasoline reserve) were found to be unworkable. One analysis was
a joint agency report by the California Energy Commission (CEC)
and California Air Resources Board (CARB) on reducing
California's petroleum fuel dependence ("Reducing California's
Petroleum Dependence," August 2003, P600-03-005F).
The report concluded California's demand for gasoline and diesel
fuel will grow far more quickly than will the supply from
California's refineries. From near self-sufficiency in 2000,
the report forecasts that 25% of California's on-road fuel will
come from out-of-state sources by 2010. Based on an analysis of
options that are currently feasible and economical, the report's
first recommendation is that California adopt a policy to reduce
gasoline and diesel fuel demand to 15% below 2003 demand levels
by 2020, and to maintain that level thereafter. A number of
options are suggested for meeting the goal, including using more
fuel efficient replacement tires, improving private vehicle
maintenance, doubling the fuel efficiency of light duty
vehicles, using natural gas-derived fuels as blending agents in
diesel fuel, and implementing fuel cell-powered vehicles. The
second recommendation is that the Governor and Legislature
should work with the California Congressional delegation and
other states to double the national fuel economy standards.
Lastly, the report recommends establishing a goal of increasing
the use of non-petroleum fuels to 20% of on-road fuel
consumption by 2020 and 30% by 2030.
According to an American Automobile Report, California had the
highest price for self-serve regular gasoline in the 50 states
in May 2004. The six states with the highest gasoline prices
are, in descending order, California, Nevada, Oregon, Hawaii,
Washington and Arizona, all western states.
The effect of high gasoline prices on automobile sales isn't
clear. The 55 miles-per-gallon Toyota Prius hybrid is the
hottest selling car in the United States, based on how quickly
the car sells. Large Internet-based automobile purchasing sites
observe interest in sport-utility vehicles (SUVs) is down, while
interest in smaller, more fuel-efficient cars is up. However,
General Motors indicates May will be its biggest month ever for
SUV sales and Toyota notes that gasoline prices have had no
effect on SUV sales.
Though it's small consolation, while California gasoline prices
are high, they pale in comparison to other countries. British
gasoline prices approach $7 per gallon, while gas prices in
Japan are near $4 per gallon.
COMMENTS
1.Hasn't The Governor Already Done This? On May 26, 2004 the
Governor announced a program called "Flex Your Power at the
Pump," a derivative of the very successful "Flex Your Power"
energy campaign of 2001 and 2002. The new campaign is a
public education effort aimed at state employees, business
leaders, and government officials, noting Californians can
save up to 15% percent on fuel costs by:
Keeping tires inflated to the recommended pressure.
Using the air conditioning selectively.
Observing posted speed limits.
Accelerating smoothly and braking gradually.
Properly maintaining vehicles by replacing air and oil
filters as recommended.
Minimizing the amount of time a vehicle idles.
This measure calls on the Governor to add information on
buying low-rolling-resistance tires, and using public transit,
bicycling, walking, carpooling, and careful motor vehicle
route planning to the public education campaign. Given that
the Governor has already unveiled his program, the author and
committee may wish to consider whether it would be more
efficient to simply ask the Governor to expand his existing
program, rather than to put a new advertising program into
statute.
1.Is Success Likely? The "Flex Your Power" campaign was never
placed into statute by the Legislature or former Governor
Davis, yet it was highly successful due largely to a massive
paid radio, television, and print campaign coupled with
countless unpaid articles and stories confirming the
electricity emergency. While there have been plenty of news
stories about the high price of gasoline, without a paid media
campaign or news stories about an actual gasoline "emergency,"
it's difficult to see how a public education campaign, even
when it is placed into statute, can be successful.
2.Related Legislation . AB 1468 (Kehoe), which is on the
committee's agenda today, is a much broader measure, allowing
the CEC and CARB to create a public education campaign and
requiring them jointly adopt and implement measures to reduce
the projected growth of gasoline use between 2010 and 2020.
PRIOR VOTES
Assembly Floor (77-1)*
Assembly Appropriations (16-5)*
Assembly Natural Resources Committee
(10-0)*
Assembly Utilities and Commerce Committee
(12-0)*
*Votes on a prior, unrelated version of the bill.
POSITIONS
Sponsor:
Author
Support:
None on file
Oppose:
None on file
Randy Chinn
AB 2685 Analysis
Hearing Date: June 22, 2004