What will the future of gas be for California?

Gas prices are higher than ever, and there’s no telling when they will come back down. According to GasBuddy, in the first week of June this year, the national average gas price in the U.S. passed $5 per gallon for the first time ever. Analysts from JPMorgan expect the national average could surpass $6.20/gallon by August of this year.

We all know there are a lot of factors that go into the price of gas. Right now, record-high prices are driven by increased demand after COVID-19 production shutdowns, the war in Ukraine, and decreased production from OPEC producers. Oil and gasoline supply and demand needs are out of flux, and there is no short-term fix for the problem. Troy Vincent, a market analyst from DTN, says that “we’ve had a supply and demand imbalance for a while, and it will remain.” AAA also said, “This supply/demand dynamic, combined with volatile crude prices, will likely continue to keep upward pressure on pump prices.”

What is the state of prices in California?
Here in California, we’re already feeling the effect of record-high prices. The state’s average gasoline price has surged from $5 per gallon to $6.34 a gallon. In fact, in one state in Mendocino, the listed price was $9.60 per gallon. Yet, despite these record-high prices, demand continues to remain normal. Still, it’s only a matter of time before gas prices force motorists to park their cars and consider alternative forms of transportation.

Where does California go from here?
We know that prices will continue to rise, and right now, demand is still average. But that’s not the only change affecting California’s oil and gas industry. In 2020, Gov. Gavin Newsom gave an executive order to end the sale of gas-powered vehicles in California by 2035. This mandate, one of the first in the world, is expected to increase electric and other zero-emission vehicle says up to 35% by 2026. In May, regulators released a roadmap, the draft 2022 Climate Change Scoping Plan, detailing how these targets could be met by reducing reliance on oil, capturing carbon dioxide emissions, and increasing renewable power sources. The goal is to reduce 91% of the oil used in the state by 2045.

How will California’s plans affect the oil and gas industry?
No one yet knows if California’s plan will work or if it will even pass. But, recently, Catherine Reheis-Boyd, President of the Western States Petroleum Association, representing oil and gas industry participants in Arizona, California, Nevada, Oregon, and Washington, participated in a podcast interview with KQED’s Political Breakdown program. It’s a fascinating listen, and she gives great insight into the energy industry, the current energy policies, and how they affect California. Here are a few highlights:

  • She mentions that California has the strictest environmental laws and standards in the world, which require everything we drill here to be refined and used in the state. Yet producers cannot get permits for new oil drilling projects, which leaves us dependent on foreign energy imports to places without the same environmental standards and increases emissions as the energy is transported here for use. California used to be energy independent, but the current government policies take us away from independence.
  • She believes that the oil and gas industry is the best innovator in the world and that it is possible to produce energy supplies without emissions and for the industry to go carbon neutral. She highlights how many refineries and industrial equipment have switched to new energy sources like renewable diesel and biofuels. She believes there is more potential for future innovative projects if companies have support.
  • Most importantly, the Western States Petroleum Association (WPSA) believes California’s draft plan is not feasible. Reheis-Boyd says the current plan relies on “bans, mandates and regulations that pick winners and losers. A new Scoping Plan needs to take into account how Californians live and not rely on theory and infrastructure that does not exist.” She also emphasized that any energy plan needs to consider a life cycle analysis of how the energy will be used from beginning to end.

What challenges will California’s ambitious plan face?
There are many challenges facing California’s ambitious plan. For one, there still isn’t enough infrastructure to support electric vehicles. It’s estimated that 1.2 million chargers would be needed for the 8 million zero-emission vehicles expected by 2030. Right now, there are only 70 000 though an additional 123,000 are in planning. Consumers may also be reluctant to embrace electric vehicles because of the initial high cost. California’s plan relies on prices coming down for consumers of electric vehicles over time because of reduced fuel bills and lower maintenance needs. California’s plan may face other challenges, including public consultation issues, government cooperation, and industry pushback.

How will my business be affected?
As a small business owner, your biggest concern is most likely the sky-high fuel prices here in California. We’ll still have to wait and see how the Scoping plan will affect individual industries and businesses as they make the proposed switches to meet targets in the future. For now, our concern is how we can best help you manage the rising fuel costs for your business. Here are a few things we can do to help:

  • Join our Fleet Fueling program: Using this program, you can more accurately track your fuel usage, get access to lower prices at 24/7 cardlock fueling sites and get more accurate reports on your fuel usage. As a result, our customers who sign up for this program can better manage their fuel costs.
  • Sign up for remote fuel tank monitoring: As prices increase, so will fuel theft. If you keep fuel tanks for your business, we offer remote tank monitoring systems to help you track consumption and watch out for fuel theft. Using these systems, you can also stay on top of your fuel needs and strategically buy bulk fuel when prices are lower.
  • Oil analysis monitoring: Our oil analysis program is a great way to monitor the state of your lubricant supplies and stay on top of your equipment maintenance needs. Using the data compiled from your supplies and equipment samples, you can create a more robust maintenance program that will reduce expensive downtime and repairs. You can then apply our maintenance savings to offset your fuel costs.

We know that times are tough for business owners right now. Our team here at Greg’s Petroleum Service is committed to helping our customers weather these price increases the best we can. If you have questions about our programs that may help reduce fuel costs, call us!

Particle Counting – here’s why you need it!

Lubricant and engine oil supplies are scarce, and prices are high right now. To save money and product, you might be trying to stretch your supplies for as long as possible. However, this method can work if you are careful and consistently check your machinery for lubricant effectiveness and particle contamination. Particle continuation is the bane of every operator. Microscopic particles of dirt, broken down product, water, and other materials that infiltrate your engines and lubricant supplies can wear down the effectiveness of your lubricant and slowly destroy your engine. Getting your lubricant supplies tested is the best way to monitor for contamination.

Is Particle Count the best way to measure contamination?
Particle counting has evolved over the years. The smallest particle size containments are usually less than 2 microns and are typically silt, resin, or oxidation deposits. These types of particles are likely to do the most damage to a moving surface over time. Therefore, measuring the concentration level of particles in oil or lubricants gives us a good idea of potential contamination problems.

A particle count test measures the quantity and particle size of the particles in the lubricant sample. This count is then measured against the target ISO Cleanliness Code for the system. If the cleanliness target can’t be reached, it’s a sign of potentially deadly contamination. Particle counts are reported in various micron size ranges. Particle count testing assumes that the number of particles doubles or more for every increase in the ISO Cleanliness Code.

How does the ISO Cleanliness Code work?
The ISO Cleanliness code is determined by the International Organization for Standardization (ISO). Basically, they wanted a way for everyone to have the same measurements for their particle count analysis, so they created a system of measurement and standards. Manufacturers, mechanics, and testing labs use the ISO Cleanliness Code to set specific cleanliness targets for their supplies and machinery. It acts as a sort of warning system. For example, if you find that your hydraulic system particle count passes the ISO code target you set, you know that it’s time for a system cleaning or to switch to a newer, cleaner lubricant to avoid engine damage.

When you send your samples to a lab for oil analysis, they will do a particle count using an automatic particle counter (APC). This technology counts the particles using laser or pore blockage methods. The results are then measured against the targeted ISO Cleanliness codes. For example, the reported standard for fluid cleanliness is ISO 4406:99. This excellent article from Machinery Lubrication can help you learn more about how ISO Codes apply to particle count analysis.

When is particle counting most beneficial?
Particle counting is one of the most common oil and lubricant analysis tests, but it’s not always the best test for figuring out what’s going on with your supplies because you don’t learn what the particles are. For example, suppose your lubricants are contaminated by silt, dust, or environmental containments. In that case, it may indicate a storage issue or a handling problem affecting your supplies’ cleanliness. The simple way to fix that issue would be to improve your storage and handling practices so your lubricants stay clean before putting them in the engine. But you can’t figure that out simply from a particle count analysis. So you might switch out your lubricant supplies, switch to new ones, or perform unnecessary machinery cleaning because you aren’t sure what particles are contaminating your lubricants.

What machinery benefits most from particle testing?
Particle counting is one only of the many valuable tests you can get from oil analysis. Of course, it would be best to have the full roster of testing to determine the best maintenance actions. But even though there are limits to what you can learn from particle testing, it’s still an essential measurement for lubricant cleanliness, especially for these types of machinery or engines:

  • Hydraulic systems
  • Compressors
  • Refrigeration Compressors
  • Turbines
  • Automatic Transmissions
  • Natural Gas Engines
  • Robotics
  • Injection Molding Machines
  • Filtered Bearing
  • Gear Systems

One of the reasons particle counting is so effective for these types of machinery or components is that it accurately measures what is flowing through the system. Particles flowing into a component or engine will cause problems down the line by scraping against moving parts, leading to machinery or engine problems like erosion, burnout, jamming, or slower responses. Particle counting is also a very effective measurement of filtration effectiveness. Simply by taking samples before the lubricant goes through a component filter and after, you can see how effective the filter is at catching particles and stopping them from flowing freely throughout the system. These measurements can help you determine when to switch out filters or switch to more effective ones.

What lubricant and fluids benefit most from particle testing?
Keeping your lubricant and machinery fluids clean is a hard job. Particle counting is a very effective for measuring lubricant cleanliness, especially for:

  • Diesel fuel
  • Solvents
  • Water-based fluids
  • Lubricants with viscosity levels less than ISO 220 or SAE 50

These fluids are particularly susceptible to particle continuation, but almost all lubricant supplies may benefit from particle testing. Even testing your new oil supplies before you use them may be helpful! A particle count test will tell you if your supplies are clean when they arrive and ready to use or if you need to perform additional filtering before use.

Join our Oil Analysis Program
We know that times are tough, and you’re trying to stretch your lubricant supplies as far as they will go. The safest way to do that is by regularly testing your supplies to ensure their cleanliness and effectiveness. We offer the Chevron LubeWatch Oil Analysis preventative maintenance program. Sign up today, and you can get testing on particle counts, viscosity, breakdown contamination, wear metals, coolants, and more. Using the results from your analysis, you will be able to set more specific cleanliness targets and adjust your maintenance schedule to the exact needs of your equipment. It’s a great way to prevent costly maintenance and equipment downtime and utilize your lubricant supplies. Call your Greg’s Petroleum Service representative today to get started.