The widespread use of ethanol could place as much as one-quarter of this funding in direct jeopardy. Clearly, any loss in federal highway funding will exacerbate this problem. This is a significant gap in your analysis that I would suggest you consider before presenting a final report to the governor and the legislature. Turning to the potential for price shocks and shortages, your consultant's analysis treats individual oil companies as if they were one big refinery, capable of reacting and correcting any problems as they arise. In reality, oil companies are separate.
Supplies grow tight.
You point out that a fire at a refinery in northern California caused a temporary shortfall in gasoline that led to a 30 cents per gallon price hike at the pump. Overall, we think the analysis of intermediate and long term adjustments is overly optimistic. Past experience with both diesel and gasoline has taught us that anything can happen. We recommend that the Commission take a more cautious approach and consider further study. Let me provide one brief example.