BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1962| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ UNFINISHED BUSINESS Bill No: SB 1962 Author: Costa (D), et al Amended: 6/29/00 Vote: 21 SENATE ENERGY, U.&C. COMMITTEE : 10-0, 4/25/00 AYES: Bowen, Brulte, Hughes, Kelley, Mountjoy, Murray, Peace, Solis, Speier, Vasconcellos SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SENATE FLOOR : 39-0, 5/24/00 (Consent) AYES: Alarcon, Alpert, Bowen, Brulte, Burton, Chesbro, Costa, Dunn, Escutia, Figueroa, Hayden, Haynes, Hughes, Johannessen, Johnson, Johnston, Karnette, Kelley, Knight, Leslie, Lewis, McPherson, Monteith, Morrow, Mountjoy, Murray, O'Connell, Ortiz, Peace, Perata, Polanco, Poochigian, Rainey, Sher, Solis, Soto, Speier, Vasconcellos, Wright ASSEMBLY FLOOR : 62-0, 8/18/00 (Passed on Consent) - See last page for vote 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. CONTINUED SB 1962 Page 2 Assembly Amendments (1) add coauthors and (2) extend CEC and staff prohibitions regarding the use of reported information to the provisions of this bill, as specified. 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 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 SB 1962 Page 3 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. 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 CEC advises that any costs associated with this bill would be minor and absorbable. SUPPORT : (Verified 8/18/00) California Independent Oil Marketers Association (source) SB 1962 Page 4 ASSEMBLY FLOOR : AYES: Aanestad, Ackerman, Alquist, Aroner, Ashburn, Baldwin, Bates, Battin, Baugh, Bock, Briggs, Calderon, Cardoza, Corbett, Cox, Cunneen, Davis, Dickerson, Ducheny, Dutra, Floyd, Gallegos, Granlund, Havice, Honda, House, Jackson, Kaloogian, Keeley, Leach, Lempert, Leonard, Longville, Lowenthal, Machado, Maddox, Maldonado, Margett, Mazzoni, McClintock, Migden, Nakano, Olberg, Oller, Robert Pacheco, Papan, Pescetti, Runner, Scott, Shelley, Steinberg, Strickland, Strom-Martin, Thompson, Thomson, Torlakson, Washington, Wayne, Wiggins, Wildman, Zettel, Hertzberg NC:jk 8/19/00 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****