California gas prices down, despite Santa Barbara spill

72746 full
72746 full

Gas prices have been falling in California, despite a rupture last month in Santa Barbara that shut down a key oil pipeline and spilled up to 105,000 gallons of crude oil into the ground, some of which spilled into the ocean.

"If you look at the California prices now, it looks like we have peaked in mid-May, averaging $3.82/gallon," said Allison Mac, Petroleum Analyst at Gasbuddy.com, in an e-mail.  "Since then, prices have continued to drop. [They're] currently at $3.57/gallon."

As a result of the pipeline burst, Exxon has cut back its daily oil production by nearly two-thirds at its facility near El Capitan State Beach. The company wanted to transport the oil by truck instead – as many as eight trucks an hour, 24 hours a day – but regulators denied the emergency request. 

Even with the facility operating at partial capacity, analysts expect little impact on prices going forward.

"It is a drop in the bucket," said Tom Kloza, Global Head of Energy Analysis at Oil Price Information Service. "The U.S. is producing more crude than we have since May of 1972."

Kloza said even much bigger spills, like the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, which have devastating environmental effects, do not cause gas prices to go up much, if at all.

"Even that spill, as significant as it was ecologically, didn't have that much resonance in the pricing structure," said Kloza.

Kloza says refinery shutdowns are much more impactful on prices because there are not many refineries that produce California-grade gasoline. Earlier this year, an explosion ripped through a refinery in Torrance, which produces 10 percent of the state's gasoline. Soon after, gas prices spiked 6-10 percent in California.

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