Gasoline study: Pipeline from Utah would cut prices here

By Cy Ryan

Tuesday, Aug. 11, 2009 | 2 a.m.

Although little can be done to reduce the rising price of gasoline this summer, Nevada’s energy director says a petroleum pipeline from Salt Lake City to Las Vegas may offer a long-term solution.

In a report released Monday to the Las Vegas Sun, Hatice Gecol, director of the state Energy Office, said the Utah-Nevada pipeline would provide competition for the lone gas pipeline from California.

“This will lower costs of fuel supply for Nevada and will reduce our dependency on one-source fuel that not only costs Nevadans excessively but also puts Nevada at a security risk with potential disruptions in our fuel supply,” Gecol wrote.

Gecol recommended that Gov. Jim Gibbons encourage Nevada’s congressional delegation to push the Bureau of Land Management to speed up the permit process for a petroleum pipeline from Utah.

On June 26 Gibbons ordered Gecol to see whether there were “possible solutions or actions the governor can take to minimize the burden high gas prices are placing on Nevada residents and reduce the impact higher gas prices are having on tourism.”

The governor was briefed on the preliminary results of the study before he left for Afghanistan on July 16, but the results weren’t made public.

Gasoline prices have risen in the past two weeks, and the average price of gasoline in Nevada is $2.75 a gallon for regular, according to AAA. That’s the seventh-highest price in the nation. The national average is $2.65 a gallon.

Gecol said gasoline prices rise in the summer “travel season” and historically ease in mid-September as demand lessens.

Gecol’s report explains that a number of factors contribute to high gasoline prices in Nevada.

Nevada produces only a small portion of the gasoline it uses. It gets most of its gasoline from California, where production costs are among the highest in the world because of strict environmental regulations.

“California fuels are a unique blend which has been developed to address environmental issues and concerns within that state,” Gecol said in the report. Nevada uses that specialty fuel, which meets higher standards than required by most states.

There is an additional cost of transporting the gasoline by pipeline from Southern California to Las Vegas. The Reno-Sparks area gets most of its fuel from refineries in the San Francisco Bay area. Rural areas of the state receive most of their gasoline on trucks from Reno, Utah or Idaho.

In addition, Nevada’s gasoline tax is the 10th-highest in the nation. The state tax adds 33.1 cents per gallon; combined with the federal levy, the tax is 51.5 cents a gallon.

By comparison, Arizona’s gas tax is 19 cents for 37.4 cents a gallon in total taxes, and California charges 46.1 cents for a total tax of 64.5 cents a gallon.

Because Nevada uses gas tax money for road construction, said Daniel Burns, communications director for Gibbons, a reduction in the tax will not be considered.