California gasoline prices rose higher and faster than pump prices elsewhere in the nation this year because of supply problems caused by refinery repairs and the transition to a new clean-fuel additive, the U.S. Energy Department said Friday.
Refiners in the state are switching to ethanol as part of the recipe for cleaner-burning fuel, eliminating water-polluting methyl tertiary butyl ether, or MTBE, in advance of a Jan. 1 state ban.
This change in fuel additives, designed to meet the federal oxygen requirement for gas, helped push California gas prices higher and might leave the state short of supplies during peak summer driving months, the report by the Energy Information Administration said.
That in turn could trigger more frequent price spikes, said the EIA, the Energy Department's research and statistical arm. The agency said the report was a preliminary assessment and that it plans to release more detailed findings this fall.
"There is a chance that California could see a recurring problem with volatility," said Joanne Shore, an EIA senior analyst who led the team that produced the report. "Certainly, that is an issue for this summer that everyone is going to continue to watch."
The report, requested by Rep. Doug Ose (R-Sacramento), provides more ammunition for California officials who have demanded without success that the state be freed from the federal requirement to add oxygenates to its gasoline.
"The infrastructure problems caused by ethanol will mean that Californians will be paying higher prices for years to come," said Yier Shi, a spokesman for Ose. "The report says what we have feared: that the transition will not be smooth and that consumers will pay the price."
Improvements in refinery technology and pollution-fighting equipment on cars and trucks have made oxygen-boosting additives unnecessary in California, said William L. Rukeyser, spokesman for the California Environmental Protection Agency. But the federal government has refused to grant California a waiver from the Clean Air Act, he said.
"We are able to fight pollution ... without the burdensome requirement to add oxygenate to every single gallon of gasoline," Rukeyser said.
Wild swings in gasoline prices have become almost routine in California since 1996, when the state required the production of lower-emission gasoline.
The cleaner-burning fuel is produced by few refineries outside of California, so any production disruptions cause prices to soar.
