With summer driving season upon us, here is gasoline from A to Z

Gasoline - we all complain about high prices but know we have to have it. We use it every day but might not really know much about it. Here are the basics - as well as some facts you might not know - about the expensive and explosive product that we love and hate.

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WHAT MAKES UP THE COST OF A GALLON OF GAS?

The majority of the cost of gasoline is from what you would expect: crude oil. This basic material needed to create fuels must be pumped out of the ground and shipped to refineries so it can become gasoline, and this is a big business.

According to AAA Arizona, 64.5 percent of the price of a gallon of gasoline is attributable to crude oil costs. Taxes make up 16.8 percent of the cost, and while gasoline taxes are high in the U.S., they don't measure up to Europe where taxes are even higher. Taxes there force gas prices near $4 per gallon (although they buy it by the liter).

In the U.S., refining and distribution costs make up 11.2 percent of the cost of gas and the final 7.5 percent is the retail margin for the seller.

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WHY DO PRICES FLUCTUATE?

Most oil producers are pumping and drilling crude at near capacity all of the time, meaning the supply is relatively fixed. However, demand shows no signs of slowing - even as prices soar, Americans jump in the drivers' seat.

Supply and demand are relatively simple metrics, and gas prices would be simple if those were the only two factors involved. But with gasoline, it is never that simple. Refinery fires, geopolitical tensions, labor unrest in other countries, holidays and threats of terrorism can all increase the price. Also, the American Petroleum Institute reports that gasoline imports are down, which has also pushed the prices up.

Linda Gorman, public affairs manager for AAA Arizona, said the current gas price rise started with spring refinery maintenance and shutdown when the change was made from winter to summer blends. "It's been a season of refinery problems that stretched the supply very thin and demand didn't go down," she said.

Simply pumping the oil out of the ground and into a car isn't enough since vehicles don't run on crude oil. The oil must be taken to a refinery where elaborate processes change crude into automotive fuel, jet fuel and all kinds of other products.

In the past 30 years, no new refineries have been built in the United States and half that were operating have been closed. According to AAA, refining capacity in the U.S. has actually decreased about a million barrels of oil per day over the past 15 years. This decrease in capacity has led Arizona Clean Fuels to propose and work on building a new refinery near Tacna. Despite this tight production situation, refinery margins are tight as well.

"There have been no new refineries in the last 30 years, and we've more than doubled our population over the last 20 years. And that in itself is going to mean higher prices," Gorman said.

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HOW DOES IT GET HERE?

Gasoline sold in Yuma is typically trucked in from terminals of the Kinder Morgan Inc. gasoline pipeline in Tucson, Phoenix or Imperial, Calif. The East Line transports approximately 140,000 barrels of oil per day, and the West Line moves about 145,000 barrels per day.

Kinder Morgan spokeswoman Emily Thompson said the gas being purchased in Yuma may have been refined in any number of places, such as California, the Pacific Northwest, Texas or even overseas.

"As a common carrier, Kinder Morgan provides transportation services to a variety of customers which include but are not limited to: major refiners, trading companies, independent marketers, airlines and the U.S. Government," Thompson said.

For retail gas in Yuma, trucks dump their loads into large underground tanks that are connected to the gas pumps. For most stations, the underground tanks hold 12,000 gallons. Most stations have three tanks underneath and the mixing to create the different octane levels, known as blending, is done at the pump.

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A LOCAL LOOK

Robert McNeece, president of McNeece Bros. Petroleum Products, said people think he makes more money when the price goes up, but he said it's just not true - even though people may not believe him.

"We're fighting for pennies," he said.

McNeece Bros. main business is to transport gasoline from a pipeline terminal to customers. Their clientele is largely the agricultural community, both big and small farms. McNeece does deliver to a few retail gas stations in Yuma.

The high prices trim the margins even more than normal, and McNeece said he doesn't like the current high prices because there's no way around paying for it. He said people can try to drive less, but the farmers have no choice but to buy because the machinery that runs on gasoline supports their livelihood.

"They've got to till their fields," he said.

Gorman with AAA Arizona said oil companies and refineries tend to deliver increased profits when prices are high, but gas stations do not. She said gas stations in Arizona were recently losing as much as 5 percent of the cost per gallon, and their only way to make money was to have people buy food or other items at their convenience stores.

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SO HOW DOES IT WORK ONCE IT IS IN YOUR TANK?

In a fuel-injection engine, gasoline in the tank is sprayed into the vehicle's cylinders where it mixes with air. The piston compress the air/gas mixture and the spark plug ignites, creating a powerful explosion. This explosion pushes the piston downward, turning the crankshaft, which transfers the power to the rest of the drivetrain and turns the wheels.

The wheels move the car thanks to friction created by the tires. The tires grab the road and propel the car. Thus, the energy bound up in gasoline is expended, sending people down the road.

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WHERE TO LOOK FOR HELP

With gas prices on the rise, drivers are turning to alternatives to save some money when they fill up. Many are turning to GasBuddy.com, a Web site that provides names and addresses of the cheapest gas retailers.

Within GasBuddy.com there are 180 local Web sites, for large cities like Los Angeles and Phoenix or for whole states, such as arizonagasprices.com. "It's a way for people to share tips on where the cheapest gas prices are," said co-founder Jason Toews. "This way people don't have to waste gas driving around."

GasBuddy.com has a network of price spotters that report what they see. The information is free and the site makes money by selling advertising.

Toews said there tends to be at least some increase in usage when prices are climbing. He said a service like GasBuddy.com is worthwhile because gas prices can deviate wildly - even in nearby areas. For Yuma gas prices, people can go to arizonagasprices.com/Yuma/index.aspx.

According to AAA Arizona, there are many ways to ensure your car gets its optimum gas mileage. These include driving smoothly, following the speed limit, combining trips, closing windows when driving on the highway, buying regular unleaded gasoline and buying gasoline during the coolest part of the day. During a cooler period, gasoline is densest, meaning you'll get the most volume for your money.

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REGULATION

There is no federal agency that regulates gas prices, which are generally subject to the economic laws of supply and demand. However, some have suggested that since there are only a certain number of oil producers, the supply can be controlled to affect prices.

The Government Accountability Office found: "During the 1990s, mergers decreased the number of oil companies and refiners and our findings suggest that these changes in the state of competition in the industry caused wholesale prices to rise. The impact of more recent mergers is unknown."

In 2005, following Hurricane Katrina, the Arizona Attorney General's Office investigated whether gasoline price gouging was occurring here. Since Arizona's gas comes from California and has little to do with the Gulf Coast states, the investigation was to see why Arizona prices were just as high as those hard-hit areas.

"We did not find any evidence of collusion," said spokeswoman Andrea Esquer.

Esquer said there was not an ongoing investigation this summer and there did not appear to be a reason for one, despite the high prices.

The U.S. Congress has been considering bills targeting high gas prices, such as anti-gouging legislation that would penalize collusion by oil companies to artificially raise the price. Other regulatory factors that affect the price of gasoline are environmental rules that require more expensive blends, "boutique" fuels and increased taxation on fuel.

One state agency that regulates the disbursal of gasoline is the Arizona Department of Weights and Measures, which monitors gas pumps to ensure they deliver the amount of gasoline reported by the pump.

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ODDS AND ENDS

In 2006, the United States consumed an average of 387 million gallons of gasoline per day. This consumption is 59 percent more than the 1970 average per day consumption of 243 million gallons - an average increase of about 1.6 percent per year for the last 36 years, according to the U.S. Government Accountability Office.

An estimated 38 million people - a record - will be traveling for Memorial Day and 80 percent will be driving. Despite the prices, people want to travel. "They might vacation closer to home or go for one less day to save money, but for most people, a summer vacation is still a necessity," Gorman said.

Yuma Community Church will be selling gasoline for $1 below the price - likely around $2 per gallon - from 9 a.m. to 11 a.m. June 2 at Sellers Petroleum on Pacific Avenue. The church will pay for the one-dollar drop for up to 10 gallons per vehicle until 2,000 gallons are sold.

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Jeffrey Gautreaux can be reached at jgautreaux@yumasun.com or 539-6858.