Proposal in California could lower fuel prices

| 8/19/2005

A proposed law in California could open the gates for sales of diesel from refineries outside the state, a move proponents say could immediately lead to lower costs at the pump by as much as a quarter per gallon.

The bill, AB 679, is slated for discussion and a possible vote by the State Senate on Monday, Aug. 22.

Since 1993, strict emissions standards put in place by the California Air Resources Board have banned the sale of diesel made at refineries outside the state. Thus, the state has relied solely on so-called CARB diesel.

But supporters of the proposed law – including its author, assemblyman Ron Calderon-D, Montebello – maintain that newer diesel fuels burn as clean or cleaner than the in-state fuels mandated by CARB and thus should be allowed in the state.

A spokesman for Calderon’s office told “Land Line Now” that such a move would circumvent the CARB regulations, creating a situation in which national diesel could be produced and sold in California.

What’s more, Calderon said in a statement that not allowing the sale of diesel produced outside of California is costing the state revenue by forcing truck drivers to go outside the state to by cheaper fuel.

“California’s restriction of national diesel fuel sales, which have proven to be cleaner burning than CARB (fuel), is costing the state about $505 million in potential tax revenue for no good reason,” he said.

Calderon also said that allowing the sale of non-CARB diesel within the state would reduce the price of diesel by 25 cents per gallon almost immediately.

Supporters of the bill also claim that the federally mandated ultra low sulfur diesel that is scheduled to hit the market in 2006 more than meets CARB standards and were at least expecting CARB to lift the ban then.

However, CARB might have other plans in mind. The board recently announced that it would mandate a different formula for diesel in California for 2006. The details of that formula have not been made public.

If AB 679 is approved by the State Assembly, it must still be approved by the State Senate as well as Gov. Schwarzenegger before it becomes law.