High diesel prices have led to a call from truck operators for a freeing up of rules governing the supply of the fuel in California.
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Diesel recently hit $US3.15 a gallon in San Francisco compared with a national average of only $2.55 per gallon, according to the California Trucking Association (CTA) which says its members are being forced off the highways, unable to compete with trucks driving in from other states with less expensive diesel.
“Big rigs can travel nearly 1800 miles on a single fuelling, making California the no-fuel zone for out of state trucking companies and negatively impacting the state’s highway revenue,” said Michael. Campbell, CEO of the CTA.
The CTA claims that, in 1993, “enthusiastic” California refiners convinced the California Air Resources Board (CARB) to adopt a California-only diesel fuel standard which prohibits the import of diesel fuel by any entity other than a California refinery.
Assembly Bill 679 would allow environmentally-friendly diesel fuel to be sold in the state regardless of where the refinery is located.
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By GlobalData“If the fuel is as clean as or cleaner than the fuel sold by California refiners, it could be imported and sold to California businesses. AB 679 will bring a screeching halt to both the tight supply of diesel fuel and the escalating diesel prices that are economically damaging California’s agricultural and trucking companies,” said state assemblyman Ron Calderon, the author of the bill.
“The prohibition on the import of compliant fuel was and is an unholy alliance between the government and a handful of California refineries, and penalises the truckers based within the state with upwards of 60 cents per gallon price difference,” added Stephanie Williams, senior vice president of CTA.
“Higher CARB diesel costs have caused a slowdown in California truckers’ replacement of their older vehicles,” said Jim Ganduglia, President of Ganduglia Trucking located in Fresno. “We are priced out of the market and can’t afford less polluting trucks because California fleet owners must absorb the higher CARB diesel costs to compete with interstate trucking operations.”
In 2006, the federal fuel specifications for diesel will make the fuel lower in sulphur content than petrol. California truckers supported the ultra low sulphur diesel fuel federally and were expecting to end the state-only standard but CARB has recently made a policy decision that it will mandate a different formulation of diesel fuel for California in 2006.
The fuel formulation is yet to be announced.
“This is a bad trade when the state accepts the current 5% reduction in pollution estimated for diesel fuel and foregoes the 90% reduction from purchasing modern equipment,” said Williams. “Shouldn’t they have to prove that they can make a cleaner fuel before they adopt a new standard? Transportation funding is dwindling and the price of diesel keeps California truckers in older trucks, but why?”
