BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2098
                                                                  Page  1

          Date of Hearing:   May 24, 2000

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS 
                              Carole Migden, Chairwoman

                   AB 2098 (Migden) - As Amended:  April 13, 2000 

          Policy Committee:                               
          TransportationVote:13-4
                        Utilities & Commerce                    9-1

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill requires the California Energy Commission (CEC) to  
          report, by January 1, 2002 to the Legislature and the Attorney  
          General, on the feasibility of financing, constructing and  
          maintaining a new pipeline, or extending an existing pipeline,  
          to transport motor vehicle fuel from the Gulf Coast to  
          California.

           FISCAL EFFECT  

          Moderate one-time costs, about $200,000 in FY 2000-01, to the  
          CEC to conduct the study and to report to the Legislature and  
          the Attorney General.  (Energy Resources Programs Account.)

           COMMENTS  

           Rationale  .  The author argues that California should be  
          exploring ways to affect either the supply of or demand for  
          motor vehicle fuel in California.  The current refinery capacity  
          in California is such that total capacity supply just meets the  
          ongoing demand in the state.  If there is any significant  
          interruption in this supply, such as a temporary refinery  
          shutdown, demand outpaces supply and gasoline prices spike up.   
          Within three years, even without any interrupted supply, demand  
          will start to permanently outpace supply.  The author believes  
          that a pipeline that can transport motor vehicle fuel from the  
          refining region along the coast of the Gulf of Mexico should be  
          examined as an option for dealing with this imbalance.

           Analysis Prepared by  :    Steve Archibald / APPR. / (916)319-2081  








                                                                  AB 2098
                                                                  Page  2