Should California put a little gasoline in the bank?
As motorists fume at record-high gasoline prices, which soared in advance of war in Iraq, California officials are studying proposals that could help blunt future price spikes and reduce the state's growing dependence on petroleum.
One of the most ambitious options would create a "gasoline bank" that would act both as a reserve supply when refineries falter and as an independent cache of gasoline that could be auctioned daily, damping the major oil companies' hold on California's fuel supply.
Other proposals are aimed at reducing the state's growing consumption of fossil fuels. Ideas include making driving more costly (think higher gas taxes and fees) and offering rebates and incentives for gas-sipping hybrid cars.
Crude oil prices could continue falling this week; on Friday, as the bombing in Baghdad intensified, crude closed at $26.91 a barrel on the New York Mercantile Exchange, down $1.21 on the day -- and far off its $37.83 high reached two weeks ago.
But gasoline prices remain high -- oil companies often take weeks to pass on lower crude prices -- and California officials say the time is right to push for measures that may help shield motorists from soaring costs.
The California Energy Commission and the state Air Resources Board will lay out a package of energy-related recommendations at the end of next month.
The two agencies plan to present a final strategy to the state Legislature and Gov. Gray Davis in June.
"This is probably the most comprehensive work we've done on this issue in the modern era," said Scott Matthews, the commission's deputy director for transportation energy. "There's a huge range of alternatives.... Everything is on the table."
The idea for a state strategic fuel reserve dates to the last gasoline squeeze in 1999, when refinery outages sent California gas prices soaring.
After an investigation into the causes, Atty. Gen. Bill Lockyer declared California's oil and gasoline markets deeply flawed, hampered by anemic competition and unique characteristics that preclude outside aid when problems arise.
Contending that government has a role to play when market forces fail, Lockyer pressed for studies, including one exploring whether a strategic fuel reserve could help stabilize the gasoline market.
Many of the studies were completed in early 2002, though they received scant attention because by then gas prices were back to normal levels.
