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What does Shakespeare have to do with California gas prices?

William Shakespeare once said that there are “occasions and causes why and wherefore in all things” (Henry V). I would edit the Bard of Avon and add, except when trying to readily understand recent oil price increases in California.

Put two analysts in a room and ask about the cost of oil and you likely will get three or more answers. Many parents send their kids to college to study the hard economic sciences only to find out that their hopes and dreams are often dashed by ideology or weak methodology — sometimes both. Conservative economists argue it’s the fault of unnecessary environmental regulations and taxes. Liberals respond that high prices result from oil speculators and price management by oil companies. Non-ideologues merely respond with, “I don’t know,” and then give a lecture on probable causes, most times, without empirical data related to correlation or causation to back up their statements.

We now have lots of conflicting facts and observations without any real strategic comprehension of what both mean. For example, gasoline prices in California have increased relatively fast and by a large amount, while the cost of oil per barrel has stabilized or even decreased. Daily oil prices per barrel fluctuate, but the variations have been relatively small, and oil costs remain quite low.

The per-gallon price of gasoline in the state has surpassed $5 per gallon in a few stations and is well over $4 per gallon at many other stations. Consumers are dazed, depressed and angered by the severity and quickness of price increases. (Manic depression has likely set in, in light of recent exposure to the previously lower prices at the pump. The New York blackout generated more babies, and the gas crisis of 2015 will probably lead to more visits to psychiatrists.)

Guesstimates of the why and wherefore of price increases reflect more the skills of a carnival barker than that of a skilled economist. Step right up and name your selection of one or more factors leading to the significant and comparatively high gas price increase in California, compared with other states. California has earned the right to claim the title of most expensive regular gas in the nation. Maybe, like in the early ’60s, the Golden State can install an electronic sign celebrating its achievement on the Bay Bridge, in the “left my heart” city of San Francisco, as it did when its population surpassed New York’s. Of course, I am just kidding. It’s not a feat the state is proud about.

Forget the ideologues for a minute! What are respected observers saying about the whys and wherefores of the severe spike in prices in California?

Many journalists writing for newspapers (happily, we still have print!), in and out of California, grant causal status to increases in the state and federal gas taxes, now adding nearly 70 cents to the price of a gallon of gas. Approximately, 10 cents of the total in most stations reflects a new carbon tax on wholesalers.

Others suggest that frequent breakdowns and poor conditions of refineries, as well as recent fires at refineries in California, add up to production and inventory limits. These assertions make some sense, given the marginal room in existing refineries to build more capacity and production.

Some political leaders point to the fact that there are only a relatively small number of refineries in the state. Added to this fact, some say, is the almost oligopolistic control of refineries by two major oil companies. Did you know that Chevron and Tesoro together control nearly 60 percent of California’s refinery capacity? Some oil analysts say the percentage is much, much higher than that — up to 80-90 percent.

Clearly, there is a negative impact on prices generated by a lack of real competition. Significantly, many observers from in and out of the state have warned about the possibility of managed prices in light of the structure of the industry (and its secrecy). In a similar vein, investor speculation on oil has been raised as a variable leading to higher costs at the pump by Sen. Diane Feinstein and others. A few years ago, Sen. Feinstein sought hearings on possible skullduggery. Interestingly, despite assumed inventory shortages, refineries exported nearly 3.5 million gallons a day just before recent major gas-price increases. Gasoline is traded on a global market governed by profits and price disparities — not social welfare.

Coming around third and heading home! Both the costs associated with the state’s requirements to shift from one blend of fuel used in the winter to another in summer, combined with the apparent costs of California’s baseline environmental-blend requirements, are seen by some experts as factors generating higher gas costs and negligible imports from other states.

Blend and seasonal shift mandates normally do increase the costs of gasoline. They probably create extra costs, particularly when the inventory is short, as it is now.

California exports ideas, fashion and lots of other things. But generally, when shortages occur — real or not — the state must import gasoline. It is isolated from refineries in the U.S. and foreign refineries. California must rely on ships, trains and trucks to secure imported oil. No pipelines exist that move gas beyond the boundaries of the state or into the state. No swimmers are strong enough to carry oil on their backs. Pre-spike low prices and blend requirements appear to have muted the incentive to send gasoline to California among would-be exporters.

Surprisingly, there is no consensus-based factor analysis determining the various causes and their relative impact on the upward spike of gas prices. If I had to place a bet on the major causes, I would bet on the likelihood of managed prices and investor speculation, current limited statewide refining and pipeline capacity, and absence of storage capacity.

Are there antidotes to California’s problems? Maybe, but not one that can or will be available tomorrow! But they could be available relatively soon, with political courage and changes in consumer behavior and perceptions. Increased competition at the pump from alternative fuels, including ethanol, electric vehicles, natural gas and, perhaps in the near future, fuel-cell technology and a range of biofuels, would generate more stability and lower prices in the gas market. Public support for applied research into alternative fuels, particularly options that currently aren’t ready for prime market time, is also necessary. Congressional willingness to pass open-fuels legislation, converting gas stations to, in effect, fuel stations, would help.

The EPA’s willingness to lessen the expenses and speed up the process associated with certification of kits able to convert internal combustion engines to run on E85, and to test and increase the number and classes of potentially convertible flex-fuel vehicles, would create demand and supply. Detroit’s willingness to increase production of new flex-fuel vehicles would provide a real “fuel additive.”

William Shakespeare’s whys and wherefores could become a happening? If so, California Dreaming (The Mamas & the Papas) about lower fuel costs and environmentally friendly fuel could become a reality. Oh, and I just paid $4.33 for regular gas at my friendly gas station!

Some drivers are blending their own ‘premium fuel’

This week I wrote about the sudden, inexplicable rise in gasoline prices in Southern California, and how much lower prices for E85 ethanol blend is.

E85 is meant to be used in flex-fuel vehicles (FFVs), or vehicles that have been converted from gasoline-only to run on higher ethanol blends. But we’ve been hearing from drivers around the country who use E85 even if they don’t have an FFV. Although E85 isn’t approved for these vehicles, some consumers, enticed by the many benefits of E85 — the price point, the fact that it’s cleaner and made in America — are happily using it anyway.

Older cars might not be able to use higher ethanol blends (what we call regular gas is E10, meaning it has up to 10 percent ethanol) and run efficiently. There’s a potential for damage to engine parts of some older cars. But some pro-ethanol drivers, especially those who own newer vehicles with sophisticated on-board diagnostics (OBD) computers, have reported no problems.

“Both of my gasoline vehicles use E85 and perform flawlessly,” Jeffrey Matthews of Murfreesboro, Tennessee, wrote in a comment to a lively FFF Facebook post this week. “And both pass the annual emissions test with flying colors.”

Cheryl Near, who with her husband Phil co-owns two fueling stations in Wichita, Kansas, that sell both E10 and E85, says some customers fill up with E85, regardless of their make and model.

“We had a lady that had an older model car, before 2001,” Near, who also appears with Phil in our documentary film PUMP, wrote on Facebook. “I went out to ask her if she knew that she was filling with E85. She told me that she did and that she loves it. Her son logged her mileage for her and they found that her car got BETTER gas mileage on E85. Our pumps are clearly marked so if I see somebody filling with E85 in a non FFV, I will go talk to them. They all know and choose to fill with E85.”

Of course, not everyone has easy access to a station that sells E85. (There are 2,639 such stations in the U.S., according to the Alternative Fuels Data Center’s locator, which you can access through our Fuels 101 section.) There needs to be more stations, that’s one of our goals as a foundation.

Even among those who can find the fuel, what if you wanted to use more ethanol than just puny E10, but weren’t prepared to go full bore with E85?

Some drivers “splash blend” E10 with E85; the sensors in the OBD can determine the properties of the fuel in the tank and adjust the oxygen intake accordingly.

“I use 30-50% E85 no problem,” Jason Fritsche wrote on Facebook.

John Brackett, an automotive engineer who also appears in PUMP, wrote in an e-mail: “Since most E85 actually tests as E70-75, and all other gasoline is E10, the blend is usually about E35-E40. This is a great way to make your own ‘premium fuel.’ ”

E85 is technically any concentration between 51 percent and 83 percent ethanol, depending on the season and the part of the country where it’s sold. Because ethanol has less energy content than pure gasoline, drivers might see anywhere from a 15 to 35 percent dropoff in mpg using E85 compared with E10. Which means you’d have to fill up an extra time every couple weeks.

To achieve a certain target level of ethanol blend, you can use one of several smartphone apps to perform the calculations: E85 Mix Calculator is available on both iTunes and the Google Play store for Android. Another is E85 Calculator on Google.