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In Oregon,
California, Washington and Nevada, the average cost of
a gallon of unleaded jumped to a record $2.57 per gallon
last week, according to the Automobile Association of America — 30
cents to 40 cents higher than prices in other regions.
In its weekly report on gas prices issued last Wednesday, the U.S. Department
of Energy said the record highs in the West mark the first time that a regional
average topped $2.50 per gallon.
In Oregon on Friday, the price of regular unleaded gas reached
a record average of $2.476 a gallon.
PORTLAND, Ore. (AP) — Gasoline
prices across the West have remained higher than even the
record highs elsewhere in the nation, partly because of a
limited regional pipeline and refinery capacity.
Abundant refineries in Texas, along the Gulf of Mexico
and in the East feed a maze of pipelines and distribution
centers, ensuring a steady supply of fuel to the Midwest,
South and East Coast.
The East also is supplemented by tankers coming from European
refineries. Combined, it means increased competition and
better overall prices in that region.
There are no pipelines connecting Oregon and the West to
the oil-rich Southern states, and trucking gas that far
is too expensive.
Oregon also has no refineries. The state gets 70 percent
of its gas from a pipeline filled to capacity by five refineries
around the Puget Sound. The rest comes up the Columbia
River by barge from Washington and California. A small
amount gets to Eastern Oregon through a pipeline from Salt
Lake City.
Other than West Coast refineries, the most convenient gasoline
suppliers to the region are in Asia. California already
imports 3.5 million gallons of gasoline a day from foreign
ports.
When problems develop with the Washington pipeline or refineries,
consumers in Oregon bear the increased expense to move
gasoline via truck or barge.
If similar problems occur on the East Coast, there is less
of an effect because states have greater access to other
sources of gas, said Mike Burdette, a senior analyst with
the U.S. Energy Information Administration.
“They’ve got more alternatives to turn to when
the supply gets tight,” he said.
Refineries also have to produce pollution-fighting summer
and winter “boutique” blends that are brought
into different areas of the U.S. market at varying times
based on weather patterns. California, which has the most
stringent air-pollution requirements in the United States,
requires its own unique blends, which drives up the cost
there.
Another major factor is demand, said Denton Cinquegrana,
the markets editor for the New Jersey-based Oil Price Information
Service.
Despite record-high gas prices, Americans continue to drive
more without making a switch to more fuel-efficient vehicles.
“We have to point the fingers at ourselves because look
at the cars we drive,” Cinquegrana said. “SUVs
are the car of choice and demand remains very high. That tells
us that people haven’t really changed.
They aren’t trading in SUVs for something more efficient
and they’re not driving less.”
He said during the past six to eight weeks, Americans have
been consuming more than 9 million barrels of gas a day,
which puts the country on a record consumption pace nearly
two months before the start of the peak summer driving
season.
Oil and gas executives say it’s a trend that’s
likely to continue unless Americans change their ways.
“Every year we see a new record in consumption,” said
Frank Holmes of the Western States Petroleum Association, a
trade group of oil producers, refiners and marketers. “If
the demand were to be reduced, the market would adjust to
that.”
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Information from: The Oregonian, http://www.oregonian.com
Watch
gas prices: Gaspricewatch.com
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