Why is Avgas so expensive in California?

DieselDriver · Nov 3, 2012

The answer, in part, is so the FBO's can hire lawyers to defend themselves against a lawsuit brought by an environmental group.

http://www.ainonline.com/aviation-n...012-11-01/avgas-issues-will-take-time-resolve

Debate Continues in California

Meanwhile, in California, the battle between the Center for Environmental Health (CEH) and fuel sellers and distributors continues. Last year, CEH, a San Francisco-based environmental group, filed notices of violation (NOVs) against California-based avgas sellers, distributors and manufacturers. California’s Safe Drinking Water and Toxic Enforcement Act requires companies that use substances known to cause cancer, birth defects or other reproductive harm to warn people who might be exposed to these substances. The act, also known as Proposition 65, allows anyone to file a citizen’s enforcement action on behalf of Californians 60 days after serving the notices, unless the state attorney general brings suit first. CEH is seeking to block the sale of leaded avgas in California and wants to impose financial penalties on the companies named in the NOVs because the companies didn’t warn people about the potential exposure to leaded avgas. And if CEH is successful, it will earn revenues because the law allows such organizations to receive a portion of any financial penalties imposed on the violators.

Fuel companies and FBOs have formed the CA Avgas Coalition to fight the prospect of financial penalties because of CEH’s actions. Little progress has been made, and CEH and the coalition are still negotiating. “Typically, the goal with our litigation is not to have a trial but to negotiate a consent judgment (I am guessing this would mean MegaBucks for them - DD), with both sides coming to an agreement that accomplishes the goals, and everybody can live with it,” said Caroline Cox, research director at CEH. “That process can be time-consuming.” She anticipates that any judgment will include reducing the exposure to lead and warning people about the exposure. If the exposure amount can be reduced below the state’s safe harbor level, then no warning about the substance is necessary, she explained.

Some California FBOs have raised the price of avgas to cover the cost of defending against the CEH’s actions. David Mills, general manager of Business Jet Center at Oakland International Airport, said, “We are part of the Avgas Coalition. It was a strategic and financial decision to join: there’s strength in numbers and it’s better to share defense costs than go it alone. We have increased the price of avgas by $0.25 per gallon to cover a small percentage of the cost of litigation defense.”
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This may seem an unusual place to post about a non-jet issue, but the fact remains that many Jet airplane Owners will start with a piston-powered aircraft before they move up to either a turboprop or jet airplane. Having to pay an extra 25 cents per gallon so the business selling you your fuel can defend themselves against a lawsuit is an extraordinary expense if you have a piston-powered twin that will burn 40-50 gallons per hour in cruise. Also, all pilots begin flight training in piston powered aircraft and build experience in smaller aircraft before they can move up to turbine powered airplanes. This places yet another financial burden upon the up-and-coming professional pilots.

What makes it worse is the fact that this is not the proper venue for such a lawsuit. Aviation gasoline is necessary for the purpose of interstate commerce, which means that Federal Law should supersede California's State Law. However, the attorneys have already stated they do not want to go to trial; They simply want to line their pockets to the detriment of everyone in aviation.

Thoughts anyone?

DD

aviator4512 · Nov 3, 2012

This is interesting... They do sell pollution liability insurance for the sole purpose of keeping businesses like FBOs who perform fueling services protected. Typically this coverage provides reimbursement for defense costs in the event of any legal action brought on by negligence. With that said, this can be fairly expensive coverage to purchase so I'm assuming that some operators have joined forces to fund this legal defense group instead of purchasing the insurance coverage.

We see this "pooling" of resources elsewhere in the aviation insurance business, but I can tell you that they rarely last in the long-term because they become insolvent.

travler · Nov 3, 2012

i can speak from experience that pollution insurance is very costly

travler

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Why is Avgas so expensive in California?

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