Friday, October 5, 2012

Forget the Jobs Numbers, Americans Impoverished by Soaring Gas Prices

Friday's contested unemployment numbers have been dominating the cable news shows and the headlines at Memeorandum, but more startling news on the West Coast is the surge in gasoline prices, now reaching record levels.

The Los Angeles Times reports, "Gas prices suddenly skyrocket in California":

Gas Prices
Skyrocketing gasoline prices caused some local service stations to shut off their pumps Thursday while others shocked customers with overnight price increases of 30 cents or more.

California's fuel industry isn't running out of gasoline — supplies are only 2.5% lower than this time last year — but recent refinery and pipeline mishaps sent wholesale prices to all-time highs this week. As a result, some station owners weren't buying fuel for fear they couldn't sell it. Those who did buy simply kicked prices higher and bet customers would understand.

"If this keeps up, I'll be looking at $5-a-gallon gas by next Thursday," said Ali Mazarei, who owns an Arco station in Riverside County. On Thursday, Mazarei was charging $4.52 for a gallon of regular gasoline, up from $4.27 on Wednesday and $4.21 on Tuesday.

"I really don't have any choice here, and I won't be making money at $4.52 a gallon," he said.

Some fuel stops had already crossed the $5 threshold.
More at the link.

And see Power Line, "CALIFORNIA GAS" (at Memeorandum):
Want to give the Obama campaign even more heartburn than it has now?  How about putting California in play?

Seems farfetched, but then people outside of California might not have noticed that gasoline pump prices jumped as much as 30 cents a gallon yesterday.  That’s how much pump prices jumped between lunch and late afternoon here on the central coast; the figure is lower in the major metropolitan areas apparently.  It is not inconceivable that there could be old-fashioned shortages and gas lines by the end of the month.  Some stations are shutting down or limiting sales already.  Paging Jimmy Carter!

The sharp price spike is attributed to tight refinery capacity problems in the state (as a couple of refineries are offline), which is true, but not exhaustive, as Churchill once explained in a different context.  As I explained in “Bureaucratic Gas” in The Weekly Standard a few months ago, California has its own special blend of gasoline for environmental reasons that are now largely obsolete.  This means that California can’t use the gasoline blends sold in Oregon, Nevada, or Arizona, which means that a refinery shortage here can’t be remedied by the usual means of bringing in more supply from somewhere else.

But President Obama could order the EPA to waive the gasoline regulations, and allow out-of-state gasoline to be transported and sold in California, delivering at least 10 to 20 cents a gallon of price relief, and perhaps much more.  Oh, that’s right: Obama wants higher gasoline prices, so don’t hold your breath.
And at Instapundit as well.

Regulations have kept gas prices at astronomical levels for years. And the problem's not just regulations, there are indeed some tightening in supplies. See iOWNTHEWORLD, "California Gas Stations Shut as Oil Refiners Ration Supplies":

Gasoline station owners in the Los Angeles area including Costco Wholesale Corp. (COST) are beginning to shut pumps as the state’s oil refiners started rationing supplies and spot prices surged to a record.

Valero Energy Corp. (VLO) stopped selling gasoline on the spot, or wholesale, market in Southern California and is allocating deliveries to customers. Exxon Mobil Corp. (XOM) is also rationing fuel to U.S. West Coast terminal customers. Costco’s outlet in Simi Valley, 40 miles (64 kilometers) northwest of Los Angeles, ran out of regular gasoline yesterday and was selling premium fuel at the price of regular.

The gasoline shortage “feels like a hurricane to me, but it’s the West Coast,” Jeff Cole, Costco’s vice president of gasoline, said by telephone yesterday. “We’re obviously extremely disheartened that we are unable to do this, and we’re pulling fuel from all corners of California to fix this.”
I usually try to fill up my Odyssey van in Long Beach. Gas is less expensive there. I topped off the tank Monday with ARCO regular at $4.00 a gallon. That was about $60.00 to fill up, which usually holds me over for a week. But my wife went to fill up at Costco last night and the filling station was closed. She got gas this morning at the local Chevron in Irvine for $4.70 a gallon. When I drove today to Mission Viejo to meet my wife for lunch, I noticed gas prices at $4.80 a gallon at the local Shell station, pictured above.

Check that Instapundit link for a map of gas prices nationwide. The Pacific Northwest is in the mid-four dollar range, and prices in upper-New York state are pushing $5 a gallon as well.

The unemployment situation hasn't changed much. The indicators folks are citing today are volatile and economists suggest that jobless numbers could head back up over 8 percent in the months ahead. Most of the employment gains were for part-time workers returning to the market. It's not a robust recovery by any means.

On top of that then is surging inflationary pressures for drivers in high-cost gasoline markets (which hits small business especially hard, causing an inflation spiral locally). With gas at near $5 levels in California, voters can again see the implications of the blue state model of crushing environmental regulations, and that combines with the Obama administration's disastrous energy policies to impoverish more and more of this nation's citizens. Mitt Romney mentioned energy policies in his opening remarks in Wednesday night's debate. He'll be smart to reference the skyrocketing gas prices in California as elsewhere in the next debate. It's getting prohibitively expensive to drive a car. Nothing will put a bigger crimp on future economic growth than a stagnating energy sector. The current administration doesn't get it. It's up to Romney to bring that point home to the American people.