Gas Prices Spike Across California, Strengthen the Case for High Speed Rail
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By Robert Cruickshank
After a brief respite at the end of the summer, gas prices in California are rising sharply, with shortages being reported in Southern California.
Gas prices in Southern California jumped 9 cents overnight Wednesday into Thursday, and experts say they'll continue to rise. Thursday saw the largest single-day increase in average price ever, DeHaan said….
The current situation has been exacerbated by a power outage at a refinery in Torrance on Monday that halted production. It follows a power outage and weeklong shutdown at a refinery in Wilmington in mid-September.
"We have definitely heard from our members that they are unable to get unbranded fuel at some terminals in California and that the roof has blown off the price of unbranded fuel," McKeenan said….
Costco in Simi Valley closed its gas station Thursday after running out of supplies and will remain closed until further notice.
While this particular spike seems the product of unusual circumstances, we know that the underlying factors remain clear: gas prices will continue to rise, as they have for the last 10 years. In October 2002 the average price of a gallon of gas in California was $1.55. Today it's nearly $3 more, at $4.49. While prices have fluctuated since the great spike of 2008, at no time have prices in California been below $3 per gallon for any extended length of time.
As global oil production peaks, supplies will begin to become less reliable. Shortages and rising prices will become, slowly and over time, a more frequent part of daily life. And that makes the provision of electrified alternatives, including high speed rail, all the more important.
Anti-HSR folks always assume that the status quo will last forever. It hasn’t even lasted 10 years. The trends are clear - gas prices are going to continue rising. California's economy will be strangled by rising prices, and the only way out is to move to non-oil based methods of travel. There's no excuse for delay. The cost of doing nothing is far greater than the cost of acting.
Robert Cruickshank writes on California politics at Calitics and California High Speed Rail Blog. This article was originally published at California High Speed Rail Blog.
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Federal action is required to bring gas prices down.Producers' profits must be limited. Also profits of gas stations. They claim they only make about 6 cents a gallon. That's probably not true, but they are at the mercy of the producers.
Though too much government control over business can be dangerous, in this case-- as well as in the cost of health-- government has an important role.
For years the government has been telling the refineries in California what they can produce and how they can produce it. Furthermore, they have telling the refineries what pipelines can be built, which ports can receive oil, etc, etc. It is impossible to build a new refinery, you would never get the permit. All this has done has been to restrict the supply of product to California. Econ 101 says that if you restrict supply, prices go up. Why is this a surprize? The current price spike is the natural consequence of government policy. So, you want to fix this with more government policy?
Let me tell you what will happen. If you take the profitability out of the business then investments will be smaller (as will supply). Prices will just go higher.
For years the government has been telling the refineries in California what they can produce and how they can produce it. Furthermore, they have telling the refineries what pipelines can be built, which ports can receive oil, etc, etc. It is impossible to build a new refinery, you would never get the permit. All this has done has been to restrict the supply of product to California. Econ 101 says that if you restrict supply, prices go up. Why is this a surprize? The current price spike is the natural consequence of government policy. So, you want to fix this with more government policy?
Let me tell you what will happen. If you take the profitability out of the business then investments will be smaller (as will supply). Prices will just go higher.
I listened to Adam Corrolla last night and he said,not to worry about gas prices. There was going to be a highspeed train from Bakersfield to Fresno by 2019 and that would fix the problem. I thought it was wonderfully sarcastic. And, yet, here it is repeated? This passes for policy?
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