Published:Saturday, May 15, 2004 9:22 AM PDT
Serving the South Coast of Oregon

The Bayshore Chevron station in Coos Bay is advertising regular unleaded for $2.319 a gallon, above the state average of $2.228 a gallon. World Photo by Lou Sennick
Drivers fume over spike in gas prices
Saturday, May 15, 2004 9:22 AM PDT

TROUTDALE - Truck driver Alan Raduechel straightened his cap, visibly disgusted with the price of diesel fuel, at just over $1.90 per gallon.

The 53-year-old big rig driver from Greenville, Texas, was filling his truck's gas tanks before returning home Friday. He said the run he made from Texas to Portland will probably be the last he makes in the West until prices drop.

"You have your fixed costs, like truck payments and insurance, but when this fuel comes up, it takes a bite out of profits," he said.

Gas prices are straining wallets all over the country but the Western states of California, Oregon, and Nevada had the highest gas prices in the contiguous United States this week: a gallon of a regular unleaded costs about $2.27 in California, $2.28 in Oregon and $2.35 in Nevada.

The national average is $1.95.

Historically, gas prices in Western states have always been a few cents higher than the rest of the country, but several factors are causing prices to vault along the Pacific Coast, industry experts said.

The West, like everywhere, has been hit by the price of crude oil, which has risen to $41 per barrel. But the region must also contend with more widespread and stringent restrictions on gas additives.

California, for example, banned the gas additive methyl tertiary butyl ether (MBTE) in an attempt to block toxic runoff. That has disrupted the supply chain at refineries, said Fadel Gheit, senior energy analyst with Oppenheimer & Co. in New York.

"Because you cannot mix gas that has MTBE with gas that doesn't, you have to wait until the tanks are completely empty, and then fill (them) with new gas," he said.

Oregon, Nevada and California also are hurting because all three states have many rural communities where it is expensive to deliver fuel and residents must do a lot of driving to get from place to place.

Eastern Oregon cattle rancher Sharon Livingston, 65, said her slim profits are quickly being eroded by a 34-cent jump in the price of regular gas over the last month.

She warned the high gas prices would cause some ranches to go bust.

"It is devastating. Anything that I have to buy to use on my ranch - steel posts, any grain for my horses, salt for my cattle - it all has to be hauled, and the minimum distance is 80 miles round trip," Livingston said.

The region also supports a limited number of refineries and pipelines, further destabilizing prices, said Elliott Eki, spokesman for the AAA of Oregon and Idaho.

There are so many pipelines in other parts of the country that they "look like a plate of spaghetti," Eki said.

But while the East Coast and the Midwest quickly built pipelines, the West has been slower to act, said John Phimister, spokesman for WSCO Petroleum, a mid-sized gas wholesaler and retailer in Oregon and Washington. He blamed environmental concerns.

"It takes 10 years of environmental impact studies before anything can happen," he said.

Eki also noted that the West is car country, more so than regions like the Northeast, where public transportation is more widely used. And with summer vacation looming, there will be an increasing number of cars on the road, Eki said.

"The big question is what is the price threshold here?" Eki asked. "And when will people modify their driving behavior?"

A Union 76 station in Fullerton, Calif., is charging full-service customers $4.07 for a gallon of premium 91 octane fuel. For that price, an attendant will check your car's tire pressure, check and top off any engine fluids, clean the front and back windows and give you a pastry or Krispy Kreme donut with a coffee in the morning or a soft drink in the afternoon, said manager Camille Awad.

There are plenty of takers for the offer. Awad, a manager at the store for 30 years, said it sells up to 1,000 full-service gallons per day. "The public, when they want something, they will buy it regardless of the price," she said.

At the Troutdale truckstop, Ron Tjaden, 58, from Montana, tanked up his car, and grimaced at the final total. He said he could afford costlier gas but he still felt a little burned by the price spike.

"As a typical consumer you just know they don't need much of a reason to jack up prices, and once they start they don't stop," Tjaden said.


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