Dan's Papers -January 9, 2009

If there was ever an issue that would demonstrate the value of having a free press on the East End, it is the issue now developing into a battle between the State of New York and the oil companies about gas prices here on the East End. Without the press, you can continue to count on paying more at the pump out here than you do anywhere else on Long Island. With the press, the New York State Legislature's attempts to stop this practice stand a chance.

As you probably know, as soon as you get past Riverhead into the tony communities of the North Fork and the Hamptons, the prices posted in gas stations rise. The farther east you go, the higher they go. You can pay $1 a gallon more in Montauk than you would pay for the same gas from the same oil company in Riverhead.

Thus it has been for as long as I have lived out here, which is half a century. I am told that even the Indians, before the white man came, had this trouble. With the money spent by the oil lobbies in Albany, attempts at various times over the years to change this have consistently failed. Elections are always coming up for those in Albany, and there is only so much they can do to fight the influence peddling of these behemoths.

To make matters worse, this inequity is always right there, right in your face, on the state mandated big letters on the signs in all the gas stations. It's $1.85 in Riverhead, $2.25 in Hampton Bays, $2.50 in Montauk. It is not only right in your face, it is explained quite clearly by the oil companies, when asked, that it is at their whim. They charge more in one place than in another because those in the first place can afford more than the other. And it is collusion among the oil companies. Zone pricing, as they call it, is "healthy for the economy," in the words of Cathy Kenny of the New York State Petroleum Council.

Into this scene, on his white horse, there has come Fred Thiele, our local assemblyman, who two years ago threw down the gauntlet. You don't charge more for the same thing in one place than in another. It's against the law.

On November 24, Thiele, a Republican, urged Assemblyman Adam Bradley, a Democrat from Westchester, to create a bill prohibiting zone pricing, which, strangely, the oil lobbyists did not fight. It passed. And it was signed into law.

Everyone soon found out why Big Oil's resistance to this law was so tepid. They had no intention of complying with it. And they are not.

The reason, they say, is that it does not apply to them because of how the law is worded. The law DOES apply to those small mom and pop gas stations who use off-brand gasoline, because they use "wholesalers" to cart the oil to them.

The law prevents "wholesalers" from engaging in this practice. (That's where zone pricing is added.) And they, Big Oil, do not use wholesalers. They truck the gas from the refineries to the retailers themselves. They have their own trucks. They are one big happy family. So they don't have to obey this law.

At the present time, you will see that at each of the 10 or so mom and pop stations in the Hamptons, (where, among other things, you can get an auto mechanic, friendly service and sometimes bait and tackle), the price of gas is substantially LOWER than at the Gulf, Exxon, Hess and other big oil stations. It is exactly the same as it is up-island.

Do yourself a favor. Get your gas at the mom and pop stations. You know where they are. You will save yourself about $1,000 a year if this battle drags on for that length of time in the courts, and you just may force Big Oil to lower their price too because of how you are now voting at the pump.

Assemblyman Thiele, at this point, is going to draft an amendment to "fix" this loophole in the law at the beginning of this new session in Albany. And for that, I suspect, he will come up against stiff big oil resistance. So he needs your help.

Thiele issued a press release last week about this, in which, incredibly, he seems to be blaming his partner on this bill across the aisle, Bradley, with changing the wording of the bill to allow for this loophole while drafting it (and to put it under his own name and take credit for it: The Bradley Bill.) One would think if he did that, which he did, it was at the behest of Big Oil. Or maybe it was just an honest mistake. Let's hope.

Thiele stated in his press release: "My original bill on zone pricing, A.2641, clearly outlawed zone pricing of gasoline without exception. The bill that was adopted by the Assembly majority, A.9136, provided that only zone pricing by wholesalers was illegal.

"Most of the major oil companies are refiners, wholesalers and retailers. These companies are now claiming that since they are also refiners and retailers, that the law does not apply to them. While such a construction defies logic, it is important that there be no question about its enforcement."

With the press release, Bradley crumbled. He will sponsor an amendment that will reflect Thiele's original thinking. Zone pricing will be illegal regardless of whom in the distribution process engages in it. If it passes. No doubt Big Oil will be weighing in big time against it.

Charging the well-to-do more is a practice that our government should have the right to do in an open and aboveboard manner. And they surely do.

But it is illegal for private companies, in collusion with one another, to engage in zone pricing that will force one group to pay more and another less for the same thing.

The light of day will have to shine on this one. If the press does that, we will all win. If the press does not do that, the state legislature will decide that no, we don't think it is a good idea to make this amendment. We weren't influenced by Big Oil, of course. We just think not. And of course, as everyone can plainly see, nobody is noticing.