Gas prices in Southern California are at an upward climb, reaching $3.62 per gallon on average this week. However, this amount is far lower than the $4.00 per gallon price recorded at the same time last year. Much of the increase is attributed to ongoing maintenance at refineries and, consequently, increased wholesale prices. In any case, prices are expected to rise as winter turns into spring and refineries switch to summer blends.
Gas prices in Los Angeles and Orange Counties continue to climb, leading to a new record for New Year’s Day. Prices reached $3.694 per gallon, surpassing the previous record of $3.655 per gallon in 2012. However, AAA projects that drivers will have lower fueling costs in 2014, with AAA attributing the price decreases to increased oil production within the United States. Indeed, said production increase is already producing economic results as oil import decreases drive the national trade deficit to a 4-year low.
Despite this development, columnist Andrew Korfhage warns that the advent of climate change must expedite our exit from dependency on this energy source. While smaller governments enact their own projects to combat climate change, the federal government remains indifferent to the looming problem. In light of this, Korfhage suggests individuals take matters into their own hands. Specifically, the author believes financiers at all levels should divest from companies directly or tangentially linked to the fossil fuel industry and instead invest in those that produce clean energy products.
One such local initiative has taken effect across the ports of California. The state is enforcing a new mandate requiring ships to use energy from portside electric sources instead of their own engines. Shore power, or cold ironing as this method is also known, was developed by the Navy with the explicit purpose of reducing fuel consumption. However, port officials are implementing the technology to improve the health of residents in surrounding neighborhoods who must otherwise grapple with the effects of port pollution. Proponents cite that ships connected to electrical sources at the ports while docked reduce emissions by as much as 95%. However, officials have yet to find long-term power sources for the new mandate and must also communicate the changes to international shippers.
Gas prices this Thanksgiving were expected to average $3.27 a gallon, down 16 cents from last year and 5 cents below 2011, according to GasBuddy.com. This would translate to an extra $1.93 billion for would-be shoppers during the start of the holiday shopping season ( although a little sharing wouldn’t hurt). For Californians, much of the decreases are attributed to increased availability and delivery of oil from locations within the country, aided by new infrastructure to transport and store crude oil. One example comes from San Luis Obispo, where Phillips 66 recently completed a draft environmental document for a new rail terminal that would send up to 80 tank cars of crude oil to Southern California and the Bay Area. Refineries elsewhere are either adding or improving rail facilities at their refineries to receive these deliveries. However, the railroad industry is also calling on the federal government to provide stronger safety standards for oil cars in response to recent crashes and increased reliance by oil extraction companies to transport crude oil via rail. In any case, gas prices climbed back up by 10 cents per gallon since bottoming out in November.
Los Angeles-based Occidental Petroleum Corp. plans to sell its minority stake holdings in the Middle East and North Africa areas to increase shareholder value. The company is one of the country’s largest oil producers. Occidental Chief Executive Stephen Chazen said, “Our goal is to become a somewhat smaller company with more manageable exposure to political risk.” Occidental is also looking into selling part of its stake in the Plains All-American Pipeline LP for $1.3 billion before taxes, as well as oil interests in the Williston Basin, Hugoton Field, and Piceance Basin.
A recent editorial takes an obtuse view of stagnant federal spending towards roads by singling out non-road projects as the culprit. The editorial rightly points out that much of the problem stems from the fact that the federal gas tax has not been raised in 20 years, meaning that revenues from the tax have lost much of their purchasing power. However, the editorial suggests that policymakers “[eliminate] side projects of dubious value” and redirect existing revenues on road transportation when the next transportation reauthorization bill comes around. Curiously, the same editorial did not offer an alternative source of revenue for projects other than streets and highways.