BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1962|
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THIRD READING
Bill No: SB 1962
Author: Costa (D)
Amended: 5/2/00
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 10-0, 4/25/00
AYES: Bowen, Brulte, Hughes, Kelley, Mountjoy, Murray,
Peace, Solis, Speier, Vasconcellos
NOT VOTING: Alarcon
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Petroleum products: reports
SOURCE : California Independent Oil Marketers
Association
DIGEST : This bill requires oil refiners and major
marketers to report more specific data to the California
Energy Commission.
ANALYSIS : Current law requires oil refiners to report
specified information regarding their refinery inputs and
outputs to the California Energy Commission (CEC).
Current law requires major marketers, as defined, to report
on their petroleum product receipts, inventories, and
distributions to the CEC.
Current law requires the CEC to analyze that information
with regard to the nature of any fuel shortages and price
CONTINUED
SB 1962
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changes.
This bill requires refiners and major marketers to report
more specific data to the CEC, including imports and
exports of finished petroleum products, the destination of
their exports, and sales of unbranded gasoline. Further,
the bill requires the CEC to gather, analyze and interpret
information on sales of fuels to unbranded retail markets.
Background :
The sponsor of this bill, the California Independent Oil
Marketers Association (CIOMA), believes that while the CEC
tracks branded gasoline prices and supplies, it doesn't
have the authority to track supplies and distribution of
unbranded gasoline. The CEC also has no authority to track
imports of gasoline and diesel fuel, nor can it require
refiners to disclose how much gasoline, diesel fuel, or
blend stocks they are shipping out of state.
Current law charges the CEC with preparing a plan
specifying actions to be taken in the event of an impending
serious shortage of energy and with developing contingency
plans to deal with possible shortages of fuel supplies to
protect public health, safety, and welfare. In an
emergency the CEC, pursuant to an executive order, can
order that fuel be made available to relieve a shortage.
For example, if there were a shortage of diesel fuel in the
Fresno area and such shortage meant that farmers could not
operate the necessary equipment to get their product to
market, the CEC could order one or more wholesalers of
diesel fuel to make supplies available in Fresno. High
fuel prices, while being annoying and disruptive, don't
qualify as an emergency under the law.
Comments :
A More Complete Picture . The author believes giving the
CEC the authority to track unbranded gasoline supplies,
imports, and exports is critical to helping the CEC develop
a full, complete, and effective contingency plan to ensure
sufficient supplies of gasoline and diesel are available in
an emergency.
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Price Spikes . California's experience over the last
several years shows that any disruption in refinery
operations has a tendency to cause gasoline prices to
spike. While some argue that the spikes are driven by the
inability of refiners to build new production facilities
and the inability to sell "non-California" gas in the
state, the reality is California motorists are competing
for gasoline with motorists in Nevada and Arizona because
gasoline produced by California refineries is regularly
sent to those states. During periods when the supply is
adequate, that's a non-issue, but when shortages develop,
those exports probably exacerbate the shortage and help
drive up prices. This bill permits the CEC to track how
much California-produced gasoline is exported to other
states in an effort to give it a more complete picture of
how the state's gasoline market functions in the "real
world."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/12/00)
California Independent Oil Marketers Association (source)
NC:jk 5/17/00 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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