Democrats seek to curb high gasoline prices

Democratic lawmakers on Thursday moved to curb high gas prices as Republicans accused them of exploiting public antipathy toward oil companies.

The state Assembly passed three bills that would force oil companies to give regulators more information about refinery shutdowns, prices and inventories, and would trigger a study of whether consumers are being overcharged in hot weather when gasoline expands. Legislators said such information could alert authorities that the market was being manipulated.

Assembly Speaker Fabian Nunez (D-Los Angeles) said legislators could “take a side and stand with the people, the consumers, or take a side and stand with the oil companies.”

Republican votes were not needed for the legislation to pass, and no Republicans voted for any of the measures. They said Democrats were engaging in political demagoguery.

“Don’t you for a second come into this house, the people’s house, and suggest that my choice is between big corporate oil or the consumer,” said Assemblyman Anthony Adams (R-Hesperia), “because I suggest to you that I side with the hardworking California families and not with my big-government friends.”

It was “big-government” Democrats in an Assembly committee who rejected a bill he carried that would have saved consumers $300 to $600 a year by changing how the state calculates gas taxes, he said.

The three other bills passed easily Thursday in a house where Democrats outnumber Republicans 48 to 32. If the measures pass the Senate, they could pose a difficult problem for Gov. Arnold Schwarzenegger, who must decide whether to sign them.

Since 2005, the governor’s main political committee has accepted at least $500,000 from oil refiners and producers.

One of the bills addresses an issue that has caught the eye of legislators across the country: whether consumers are getting their money’s worth when they buy a gallon of gasoline that is hotter than 60 degrees.

Oil companies and distributors account for the way gasoline expands at higher temperatures and use devices that adjust volumes to bring the amount of gasoline sold in line with the federal 60-degree standard.

But gas stations in California don’t use such devices. When consumers buy hot fuel in this state, they get slightly less per gallon than they pay for. Similarly, in cold weather, gasoline is denser and customers get more for their money.

A recent report by a congressional subcommittee investigating the matter found that fuel expansion could cost California consumers an additional $228 million during the summer.

AB 868, by Assemblyman Mike Davis (D-Los Angeles), is one of the bills that passed Thursday. It would require several state agencies to survey the effects of temperatures on fuel delivery and analyze the costs of correcting for such an effect, perhaps by requiring gas stations to install volume-adjusting devices.

Jay McKeeman, vice president of government affairs for the California Independent Oil Marketers Assn., said a rough rule of thumb is that for each five-degree increase in temperature, 12 gallons of gasoline lose about a tablespoon. A recent study in Australia, he said, found that the cost of correcting for temperature wasn’t worth the expense to consumers.

“California needs to go through the same exercise Australia did,” said McKeeman, whose members sell fuel to bulk purchasers such as cities, farms and trucking companies. The association supports Davis’ bill.

Another bill, AB 1610, by Nunez, would create a seven-member board, which would include the attorney general, to scrutinize the maintenance schedules of California oil refineries and watch for evidence of intentional shutdowns designed to limit supply and drive up prices.

“This bill simply makes those refineries accountable by requiring them to open up their records and answer one simple question: Why are you scheduling a maintenance shutdown that was not previously scheduled before?” Assemblyman Mike Eng (D-Monterey Park) said.

Tupper Hull, spokesman for the Western States Petroleum Assn., said the large oil companies in his group are strongly opposed to Nunez’s bill.

“No refiner likes to reduce their production,” Hull said, “but when safety and necessary maintenance dictate, it’s an unavoidable event.... We have a very, very tight supply and demand balance in California, and it does not take very much to impact the retail marketplace.”

Hull said he was confident that additional investigations would result in the same conclusion as two dozen other studies: “It’s the market and nothing else that dictates the price of gasoline in California.”

In an August report prompted by gas prices hitting a record $3.33 a gallon for regular self-serve in May 2006, the California Energy Commission found “no smoking gun,” spokeswoman Susanne Garfield-Jones said.

State investigators found that refiners ran into problems as they tried to resume operations from long-planned interruptions for maintenance, she said.

“There was nothing that showed that these incidences were done intentionally,” said Garfield-Jones, adding that the commission had limited information to analyze.

Another bill that cleared the Assembly on Thursday, AB 1552, by Assemblyman Mike Feuer (D-Los Angeles), would expand information the Energy Commission can demand from oil companies to include, for example, production and transportation costs, inventories and sales volumes.

“These type of things will allow us better analysis,” Garfield-Jones said, “and that will help the industry and consumers.”

nancy.vogel@latimes.com