Airline opposes tax on pipeline

Thursday, April 26, 2001 | 11:25 a.m.

CARSON CITY -- A proposed tax on fuel flowing through the pipeline from California could hurt some industries, an airlines lobbyist said Wednesday.

Senate Bill 309, sponsored by Sen. Bob Coffin, D-Las Vegas, would commit the state to building emergency generators to keep fuel flowing from California refineries in the event of power outages.

The bill would impose a one-penny tax on each gallon of gasoline in the pipeline to finance the generators.

Coffin said Southern Nevada could be in "deep jeopardy" if the electricity went out in Southern California and there was no emergency backup to continue pumping.

But Keith Lee, a lobbyist for Southwest Airlines, said the company already pays three-quarters of one cent on every gallon it uses to finance the transportation and storage of the fuel.

"I'm not convinced this is the proper proposal," Lee said and suggested the governor could set up a committee to study the issue.

But Coffin retorted, "Our entire Nevada economy is dependent on three hollow threads of steel linking us to the California refineries."

In January, he said, Nevada's fuel supplies were "seriously depleted" because there wasn't enough power in California to pump the gasoline into Nevada. He said the fuel supply at McCarran International Airport was down to a three-day supply. The tank farm near Nellis Air Force Base was almost empty of diesel fuel. In Northern Nevada, the gasoline was being used faster than it was being replenished.

Had that continued, Coffin said, it would have crippled the Nevada economy.

Gov. Kenny Guinn worked with California Gov. Gray Davis over a period of several weeks to replenish fuel supplies "and got us past that crisis," Coffin said. Pipeline owner Kinder Morgan Energy Partners failed to show to testify during hearings on the bill before the Senate Finance Committee Wednesday.