Las Vegas Sun

March 28, 2024

Rural counties face loss of options for gasoline

Representatives from the petroleum and automobile industries met with state officials Thursday with a plan to overturn recent changes in state regulations that allow some rural counties to purchase gasoline from neighboring states.

If the petroleum and automobile industry representatives succeed, several rural counties in Nevada would be required to rely almost exclusively on gasoline from Clark County and California.

"'We just want a bigger market basket to choose from," said Peter Krueger, state executive of the Nevada Petroleum Marketers. The Nevada Petroleum Marketers is siding with the Nevada Department of Agriculture and wants to keep the current rules as they are now.

"Why should we be required to ship in gas from Clark County when we could bring it in from Salt Lake City for cheaper?" he asked.

The issue came to light during the quarterly meeting of the Nevada Board of Agriculture on Thursday, which was attended by officials from the state Department of Agriculture and representatives from the Western States Petroleum Association, Alliance of Automobile Manufacturers and other lobbying groups for the petroleum and automobile industry.

At issue is a regulation that was changed by the Department of Agriculture and approved by the Nevada secretary of state in October. The change is favored by the Department of Agriculture and the Nevada Petroleum Marketers but is opposed by the gasoline and automobile industry.

The change allows counties south of the 38th parallel to use gas with a higher evaporation level, falling under the same regulations as Northern Nevada counties.

It loosens previous restrictions regarding gas use in Nevada. The gasoline with a higher evaporation rate has the potential to cause minor toxic emissions as vapors from the fuel are released into the atmosphere. Prior to the changes, this fuel was used only in northern Nevada counties above the 38th parallel. The counties affected by the change are Lincoln, Nye and Esmeralda.

Clark County uses tighter standards set by the Environmental Protection Agency and is therefore not affected by the changes.

The 38th parallel was used as a marker because gasoline evaporation is affected by altitudes and temperatures, said Tom Smigel, Regional Supervisor for the Las Vegas office of the Department of Agriculture.

There were several reasons why the Nevada Petroleum Marketers and the Department of Agriculture wanted to allow gas with a higher evaporation level in those southern counties, Smigel said. One was to have a uniform petroleum regulation throughout the state.

Before the long-standing regulation was changed, there were several different rules governing what kind of petroleum could be used throughout the state, causing confusion and frustration for gas distributors, state officials and customers, Smigel said.

Also, the current regulations allow those three counties to purchase petroleum from Reno or Utah. Prior to these changes, the counties relied almost exclusively on petroleum from Clark County, which in turn receives almost all its gas from California at a relatively higher price.

However, the national automobile and petroleum industries are strongly opposed to the new changes, claiming that gas that evaporates at a higher level could damage cars.

"There is a higher probability that vehicles could experience performance problems such as stalling" if automobiles in those counties use petroleum with a higher evaporation rate, said Gina Grey, the Western States Petroleum Association manager of fuels for the Southwest.

The Western States Petroleum Association is a lobby organization for the petroleum industry and represents petroleum distributors as well as companies such as Chevron.

"We believe this is a precedent-setting move," Grey said. One of the industry's main arguments against allowing petroleum with lower standards from reaching the rural counties in Nevada is that other regions across the United States may follow Nevada's lead.

When asked if the Western States Petroleum Association wanted to keep the rural counties from accessing petroleum from Utah in order to force them to purchase gas from California at a higher price, she replied, "we have refineries in Utah too."

Currently, Nevada purchases most of its gasoline from California, so the pricing concerns do not apply, Grey said.

Under the old regulations, which had been in place since the early 1960s, the counties of Nye, Esmeralda and Lincoln could not buy gasoline from Northern Nevada and Utah. In turn, those counties were hurt during a severe gas shortage or when prices hit all-time highs, such as this year, said Krueger.

Even though Utah or Reno is farther away and shipping costs are high, it is still cheaper to buy gas from those areas, he said.

"We can still get the petroleum, including freight costs, cheaper from the north," he said.

Krueger expressed confusion over why the petroleum industry was so vehemently opposed to the recent changes, saying that the only reason he could think of "they are afraid of change."

He said that the population in those rural counties was so small that gas revenues for California petroleum distributors would not be affected if the counties chose not to purchase gas from them.

Smigel from the Department of Agriculture also questioned why the automotive and petroleum industries were so dead set against these new regulations, asking, "If it doesn't affect the drivability of the car or impact the environment, then why have (the old) rules?"

While the Nevada Department of Agriculture is concerned about any toxic vapors used by vehicles, the population density in Nye, Lincoln and Esmeralda counties is low enough that no environmental problems will arise from the use of higher-evaporation petroleum, said Steve Grabski, an administrator for the Division of Measurement Standards.

The population of Nye county was 35,717 in 2003, according to the U.S. Census Bureau. Lincoln County had a population of 3,976 and Esmeralda County's population is about 850.

The Board of Agriculture will not rule on the matter until March at the earliest, Grabski said.

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