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How'd we get so lucky'

"I'm startled, speechless," said one local gas station owner, watching California-bound motorists hungrily tanking up here with some of the nation's cheapest gasoline.

Drivers can thank one major retailer for holding prices down, according to a spokesman for a fuel dealers' association.

Usually, the Rogue Valley's gas is among the priciest in the country, said Greg Bailey, owner of Ashland's Valley View Exxon. But this spring, regular unleaded sells in the Rogue Valley for an average of $1.515 a gallon, compared with California's budget-busting $1.984, only a fraction under normally astronomic prices in Hawaii, according to surveys by the American Automobile Association.

"We're having a run on people filling up their tanks, even when they're only half empty, for the trip over the pass into California. It's a new and very enjoyable experience for us," said Bailey.

Oregon's gas is the 13th cheapest in the U.S., said Portland AAA spokesman Elliott Eki. comparison, Nevada is $1.83, Washington is $1.58, Idaho is $1.595 and the U.S. average is $1.705.

Within Oregon's urban areas, the Medford-Ashland price is the best buy. Portland is averaging $1.597, Eugene is $1.574 and Salem is $1.558. And Rogue Valley gas is about 12 cents cheaper than last spring, AAA reported.

"Rogue Valley prices are mainly being driven down by Costco in the market," said Brent deHart of the Oregon Gasoline Dealers Association in Portland. "That's why Medford is cheaper than Grants Pass. Big and small dealers are being forced to compete when they're already operating on a razor-thin margin."

California's high prices can be attributed to highly refined and expensive CARB (California Air Resources Board) gas requirements, deHart said, as well as a recent refinery fire near Los Angeles, which depleted supplies.

While some predict California gas may pass $2 this summer, Oregon is not affected by California's supply problems or gasoline standards, so few predict big prices here this summer, said deHart.

Northwest gas supplies are "tight" but adequate, he said.

"If there is a shortage, we can get more from Seattle. But we can't give it to California. That's part of the reason their prices are higher. And if they hit $3 a gallon prices this summer, which is entirely possible, that doesn't mean we will."

While oil companies know what supplies are, they can't predict summer demand and its effect of prices, he said. In past gas shortages, prices haven't made consumers use less gas, he added.

Because of demand questions, Exxon has set up "allotment," - putting dealers on rations of 110 percent of their usage for the same month last year, said Mike Hawkings of Medford's Hawk Oil, the distributor for area Exxon stations and some independents.

A reduction in supply and a hike in prices often happens in spring, when oil companies perform "turnaround" - maintenance and retooling for summer blend production, Hawk said. During this time, prices rise as production drops.

Only three factors could make Oregon gas get expensive this summer: problems with refineries or pipelines, a jump in the price of crude oil (not expected) or expensive gas in other areas of the West, deHart said.

"If gas went to $3 a gallon in Boise or Denver, then oil companies would take their supply there and sell it. Gas is a commodity and will flow to the area of highest demand."

Oregon's low gas prices have nothing to do with it being one of only two states allowing self-service gas, deHart said. On the contrary, labor adds 5-10 cents a gallon to dealer costs, he said. In addition, Oregon taxes are among the highest in the U.S., at 24 cents a gallon.

Studies reveal increased gas demand is coming, not so much from more fuel-guzzling SUVs, he said, but from an increase in the number of drivers. In addition, prosperous times have opened the door for families to use more cars and at younger ages, he said.

AAA supports increased energy production to meet demand, Eki said, but also urges members to conserve by combining trips and minimizing discretionary driving.

"Supply is adequate now for summer travel, but it's a good time to start the habit of conserving, because it could be tight down the road."

John Darling is a free-lance writer living in Ashland.