Posted in: Infrastructure,
by Gregg Laskoski on Jun 25, 2013 06:00 AM
When gas prices spike so severely that your state's average price at the pump rivals that of Hawaii, you know you've got problems.
With the refinery woes plaguing the Great Lakes region's fuel supply for much of May and June, consumers understandably grew angrier and more frustrated as prices in many markets soared well above $4.25 per gallon. At least one elected official was paying attention too.
Sen. Rick Jones from Grand Ledge, represents Michigan's 24th District. Earlier this month he called for new refinery construction to supply Michigan with gasoline. "I’m in the process of drafting a bill to give a company a ten year property tax credit to encourage this construction. I also will work hard to make sure they get permits in a timely fashion.”
Significant problems (and/or scheduled shutdowns) at approximately five refineries contributed to the record prices set in many metro markets in Michigan as well as Indiana, Illinois and Wisconsin. Among these four states there are 8 refineries, but Michigan and Wisconsin have just one apiece. Ohio and Kentucky add another 6 refineries. Nonetheless, supply from even 14 refineries in the six states we mention apparently was insufficient to prevent the May/June price escalation.
In an exclusive interview with GasBuddy, Sen. Jones said he's drafting legislation and although the idea is in its early stages it's already gaining interest and support from both sides of the state legislature.
"I'm looking at using the Strategic Michigan Fund and giving a refinery a 10-year tax abatement on property tax and business tax also... Just to give them incentive to build a new refinery here in Michigan."
It's uncertain, at this point, exactly how much money that might represent. Jones said he wants the refinery to focus primarily on gasoline production but also on aviation fuel too. He noted that perhaps the majority of that fuel is produced in the south and he believes it's also a nation defense issue that justifies producing more of it in the north than is currently produced.
Jones clarified a question about a statement he made earlier implying that the gasoline produced by the potential new refinery would be sold only to people in Michigan... he said he told a reporter 'Look, we want a refinery to make gasoline for Michigan, not for China'.
He said he would like to see some stipulation addressing the gasoline production be added but he noted that he certainly understands that it wouldn't all go to Michigan exclusively.
"This is just developing; the bill is being drafted and obviously bills go through multiple stages, and the final product might depend a lot on what companies come forward, what suggestions we make."
Jones said Michigan's state legislature is not scheduling any sessions in July and August, for now, so he expects to introduce his bill in September.
Jones also introduced Senate Concurrent Resolution 72, which urges congress to investigate high fuel costs in Michigan.
“Over the past few weeks, Michigan motorists have faced some of the highest gas prices in the country,” said Jones, R-Grand Ledge. "If refineries are down in Illinois and Indiana, this is an interstate commerce issue, and I believe this warrants a federal investigation.” Jones said.
However, Jones believes an investigation is necessary to ensure that Michigan motorists are not being price gouged.
“I hope that gas prices return to normal soon,” Jones said. “However, I think the reason for this unexpected price increase needs to be discovered so warning signs can be identified and long-term solutions can be found."