Town Has a Dubious Distinction: Priciest Gas

By ERIC BAILEY

May 7, 2001 12 AM PT

TIMES STAFF WRITER

EUREKA —

Shayne Sines dreads the gas pump, and for good reason. His clunky Chevy station wagon gets, by his own admission, “nasty” gas mileage. Worst of all, Sines fills its tank here on the lovely but isolated north coast of California--home to the highest gasoline prices in the continental United States.

“It’s crazy,” said Sines, 31, as he pumped a few precious gallons of $2.10 regular the other day. “I can’t fill up--it’d be $45. So I do $5, $10 at a time. They’ve got us over a barrel.”

Folks all over Eureka are fuming about the price they pay at the pump.

Fog-shrouded and remote, Eureka consistently endures gasoline prices 10 to 50 cents higher per gallon than other cities in the state. And that’s saying a lot: California typically pays more for gas--an average of $1.84 for a gallon of regular in the latest American Automobile Assn. monthly survey--than any other state except Hawaii.

Such are the costs of living behind the “redwood curtain,” walled off by forest and mountains from the rest of California--an area already hard hit by the decline of its two major industries, timber and fishing.

Experts chalk it up to raw market forces, from a lack of competition among the area’s gas stations, which are monopolized by a couple of major distributors, to the hefty transportation costs of shipping fuel by barge to Eureka’s harbor.

“The good news is it’s a beautiful place up there,” said Claudia Chandler, a California Energy Commission spokeswoman. “The bad news is transportation costs from Bay Area refineries add up. And lack of competition hurts. I guess that’s why they feel they’re getting ripped.”

In this redwood realm, where years of anti-timber protests have made political activism an art form, locals aren’t reluctant to speak up. Last September, a coalition of gas-price activists staged a three-day boycott of stations in Humboldt and Trinity counties.

But there was virtually no effect at the pump.

Undeterred, they’ve written letters, planted angry signs on telephone polls, plastered bumper stickers, sent out e-mails aplenty to congressmen, assemblymen and the president. Even the local newspaper has gotten into the act, printing a daily graphic comparing the price of gas in Eureka to other spots in the country.

Nothing seems to help. A drive around town tells the story--if you want to waste a few precious drops of petrol taking the tour.

The price at one Texaco station is $2.10. Union 76 is $2.11. Chevron: $2.16. Even little Gas-4-Less gets motorists for lots--$2.09.

“It’s outrageous,” howled Clifford Yeager, a retired sawmill worker. “You hear back East it’s a buck forty-five, a buck fifty. We’re over $2. No way!”

A survey by the AAA found that only a few isolated spots in Hawaii pay more than Eureka, said Bronwyn Hogan, an association spokeswoman in San Francisco. Eureka hit $2.13 in April, while Wailuku, Hawaii, was running about a dime more.

With oil chronically short in the U.S., Hogan said, gas prices may only go up this summer. Already, energy analysts expect the national average to hit a new high today, topping the mark of $1.67 a gallon set last summer. The driving force: a rash of tainted gas delivered late last week from a Midwest refinery serving Chicago and Milwaukee.

In Eureka, many residents worry that $3 a gallon will be common this summer.

“I’ve heard $3, I’ve heard $4. If it gets up there, I’ll be working one day just for gas,” said Richard Stone, who manages a mini-storage facility. “I won’t be able to afford my truck. I won’t be able to pull my boat.”

Sticker shock at the pump is already causing psychological fallout.

Many folks report they’ve put off plans for motoring vacations, or cut back on car camping trips. The price of groceries and many other everyday items is up a bit, reflecting the gasoline costs. Delivery firms are hitting their customers with fuel surcharges.

Local boosters worry about a falloff in tourism; they’re haunted by visions of out-of-town visitors gasping over gas prices and not coming back. The airport’s Avis Rent-A-Car franchise has seen business decline in the last year or so, and the cost of gas is blamed. Car dealers report a jump in sales of economy cars and a falloff in gas-guzzling SUVs.

“It’s hurting the economy some,” said Opie Hendricks, owner of a used-car dealership in nearby McKinleyville as well as the car rental firm. “Timber and fishing have had problems. Now our power bills have practically doubled. And this adds insult to injury.”

Neal Anderson, a courier for Rapid Package Delivery, says the gas pump price assaults his bottom line. He pays for his own gas, getting reimbursed 29 cents for every mile he drives. Every time the price jumps, Anderson laments, “it eats into your profit.”

Anderson hunts for the best price, but invariably doesn’t find too big a difference between stations around town. So he favors those that give freebies with a fill-up--a cup of coffee at one, a free lottery ticket Tuesdays and Saturdays at another.

Steve Hackett, associate professor of economics at Humboldt State University, said the problem seems to be near-monopolies along two key stages of the distribution chain. A single barge line brings gas up to the local port’s only storage facility. And the region’s gas stations are operated by only a few players, who can set virtually uniform prices.

“There’s a lot of frustration,” Hackett said. “People feel they’re powerless.”

The local district attorney and the state attorney general have looked into charges of collusion in the local gas market, but have never made a case. Energy experts say the locals probably aren’t gouging. Instead, it’s the big oil companies realizing profits at Eureka’s expense.

Adding further to this puzzle are prices charged at communities to the north and south of Eureka.

One county north in Crescent City, gas is typically far cheaper. The reason: Stations have to keep the price down lest they lose all their business to nearby Oregon, where gas prices are far lower.

A half-hour from Eureka down winding U.S. 101, the town of Fortuna typically enjoys gas for 10 cents cheaper. Blame it on the trucking industry. Tanker trucks from Bay Area refineries can make a round-trip to Fortuna in a day, but Eureka is just far enough north that it’s considered a two-day haul, adding considerably to the costs. Hence, the fuel is shipped to Eureka’s port by barge.

Local truckers, meanwhile, say they’re getting hammered. Though the cost of diesel is considerably less, it’s still a good 30 cents higher than last year.

“It’s making it real difficult,” said Ed Gomes, general manager at Joe Costa Trucking, which hauls lumber as far south as Los Angeles. An official at another trucking company said they’re paying $30,000 a month more for fuel than last year.

Lots of folks, of course, find themselves simply buckling down, getting philosophical, fatalistic.

“It’s absurd, but what are you going to do?” Sequoia Dixon, 20, wondered aloud as he pumped $29.72 worth of gas into his Toyota Tacoma. “There’s nothing you can do about it.”

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Gas Prices in California

Eureka, where gas prices are regularly highest in the continental United States, topped the latest American Automobile Assn. list of prices in 76 California cities. These average prices are for a gallon of regular unleaded self-serve gas as of April 17.

HIGHEST

Eureka: $2.130

Yreka: $2.090

Bishop: $2.089

San Francisco: $2.020

El Centro: $2.004

San Mateo: $2.000

Ukiah: $1.980

Lake Tahoe: $1.960

Blythe: $1.956

Santa Barbara: $1.952

LOWEST