Editing 79-08-A1 (section)

= California Gas Shortage =

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=== Transcript ===
All the world I guess is aware of the California gasoline shortage. Some think
we are careless gas guzzlers and it serves us right. Others laugh it off as proof
that Californians are pixilated. But Californians sitting in those long lines are
angry and to make it worse, they aren't certain as to who they should be mad at.
Is it the fellow running the gas station? How about the big oil companies? Is there
really a shortage and if so, who caused it?

One thing we can prove; California drivers aren't to blame as a Washington
POST editorial suggested they were. The average use of gasoline per car in
California is 59.7 gallons a month. In Virginia, where a lot of Washington POST
subscribers live, it is 73 gallons. In Maryland it's 66.7.

California has 65,000 oil wells. About 23,000 of them are closed down. Crude
oils aren't all the same. California crude is a heavy oil and requires more
expensive equipment to refine it. Once upon a time this was reflected in the
price for California oil. Since 1973, however, the Department of Energy has set
the price on oil. So when a well in California sands up or a pump breaks down,
there is no profit incentive in putting it back in operation. At least 15,000
of those closed down wells could be reopened if the Department of Energy would get
out of the way and trust the free market to determine the price.

Then there is Alaskan oil -- but its high sulfur oil and California refineries
aren't built to handle that. Japanese refineries are. Well then -- let's sell
the Alaskan oil to Japan and buy the right kind of oil elsewhere for the California
refineries. The government won't allow it.

How about changing the California refineries so they can handle the high
sulfur oil? For the last six years the Department's regulations about how to
recover the costs have made that impossible. That's why in the midst of this
shortage California refineries have only been operating at 80 percent of capacity.

Just of late the Department has made a move to change these reputations--a
tacit admission that it has been a road block for six years. But even this isn't
a total answer to the California shortage. There are still price controls on
gasoline plus the allocations dictated by the Department of Energy. The Department
has done a little squirming of late and even indicated its allocation formula might
be the reason the roof fell in on California. It seems our allocation out here was
based on 1972 population figures. We happen to be a fast growing state with more
people and four million more automobiles than we had in 1972.

The Department is updating the formula to 1978 but a tentative effort to let
the market determine price has been overruled by the Administration.
Have you figured out yet who we should be mad at?

This is Ronald Reagan.

Thanks for listening.
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=== Details ===
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<TR><TD WIDTH="150">Batch Number</TD><TD WIDTH="150">{{PAGENAME}}</TD></TR>
<TD>Production Date</TD><TD>05/29/[[Radio1979|1979]]</TD></TR>
<TD>Book/Page</TD><TD>[[Radio_Commentary_Books#Reagan:_In_His_Own_Hand|RihoH-322]]</TD></TR>
<TD>Audio</TD><TD></TD></TR>
<TD>Youtube?</TD><TD>No</TD></TR>
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===Added Notes===

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