Editorial: Too little, too late?

Monday, July 12, 2004 | 8:53 a.m.

Southern Nevada is virtually tethered to California when it comes to the supply and price of gasoline. We get all of our refined gasoline from California, the state with the highest pump prices in the nation. One reason Californians pay more for gas is because of state laws requiring a special blend to hold down pollution. Another reason, though, is that refinery capacity is at a near standstill in the state, while demand for gas is growing by 2.6 percent a year. This is why Nevadans have a stake in the planned closure of a refinery near Bakersfield, Calif., owned by the Royal Dutch/Shell Group.

We were glad to learn that the Federal Trade Commission has begun an investigation into the planned closure. Even though this refinery produces only 2.2 percent of the state's gasoline supply, Southern Nevadans are certain to be hit with a spike in gas prices if it closes. Is this another case where supply is intentionally decreased to drive up prices? The FTC aims to find out.

While we appreciate the FTC's investigation, we're reminded of the old saying about closing the barn door after the horse has fled. From 1985 to 1995, 10 California refineries closed, causing production to fall by 20 percent. Where was the FTC then, when the main source of our current troubles was happening?

The California Energy Commission says it is unlikely that any refineries will ever be built again in the state. While FTC investigators probe the planned closure of the relatively small Shell refinery, we ask them to open their eyes to this larger problem.

archive