Tuesday, July 14, 2015

#1 Story In Southern California This Week: $5 Gasoline; EIA Rubs Salt In The Wound -- July 14, 2015

Updates

Later, 9:11 a.m. Pacific time: moments after posting the original post -- that the #1 story in California is $5 gasoline, this EIA "energy cookie" pops up:
The average retail price for motor gasoline this summer (April through September) is expected to be $2.67 per gallon, the lowest price (in real dollars, meaning adjusted for inflation) since 2009, based on projections in EIA's July Short-Term Energy Outlook (http://www.eia.gov/forecasts/steo/) . This decline is mainly the result of the projected 41% year-over-year decline in the average price of North Sea Brent crude oil. --- EIA  
What? "This decline is mainly the result of the projected 41% year-over-year decline in the average price of North Sea Brent crude oil. What? 

Original Post
 
Breitbart probably has the best broad-brush explanation to date of the overall energy picture in California:
GasBuddy noted that an “extraordinary convergence of fuel supply problems this week in California prompted severe spikes in wholesale gasoline prices and experts say there’s no immediate relief in sight.” CEO Jason Toews sent Governor Brown a letter asking him to consult with the EPA and Department of Energy about a California gas regulation standards waiver due to “extreme and unusual fuel supply circumstances.”
Friday’s Gas Buddy call came after U.S. crude oil prices plummeted by -5% last week and the average price of gas in the U.S. slumped to $2.76 per gallon.
The International Energy Agency stated that the world is currently “massively oversupplied” with oil, mostly due to the US fracking boom.  Over the July 4 weekend, the U.S. national average price for gasoline fell to the lowest level since 2010.
But while the rest of the America enjoys almost $1 per gallon in savings, California drivers on Friday in the Bay Area drivers were surprised to see gasoline up-tick to $4 a gallon, and L.A. Basin drivers were stunned as some stations posted $5 a gallon gasoline.
When Governor Brown was leaving office after his first stint in 1983, California was America’s second-largest producer of crude oil at 1.025 million barrels per day (bpd) 32 years later, California has dropped to the third-largest producer of crude oil, as production plummeted to 545,000 bpd.
When Brown signed a bill in 2011 raising the minimum renewable portfolio standards (RPS) for utilities from 20% to 33% by 2020, he promised investments in wind, solar, biomass, and geothermal sources would cut energy prices and create tens of thousands of jobs. The only things stimulated so far have been higher energy prices.
State oil supplies are now at their lowest point in 12-months. Federal energy officials said that California refiners have been forced to run-down 1.1 million barrels held in their reserve storage tanks. Out-of-state crude oil imports had been averaging about  100,000 barrels a day, but no imports arrived last week, according to state records.
Other relevant links at this site:
Notice also the earlier tag: California_Spike_2014
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