Refinery fire will boost gas prices

Tuesday , March 18, 2014 - 2:35 PM

Jason Dearen, Terry Collins

RICHMOND, Calif.— A major fire at one of the country’s biggest oil refineries that sent scores of people to hospitals with complaints of breathing problems will push gas prices above $4 a gallon on the West Coast, analysts said Tuesday.

The fire, which sent plumes of black smoke over the San Francisco Bay area, erupted Monday evening in the massive Chevron refinery about 10 miles northeast of San Francisco. It was out early Tuesday, although officials were still conducting a controlled burn.

California’s average price Tuesday for a gallon of regular gasoline was at $3.86.

The West Coast is particularly vulnerable to spikes in gasoline prices because it’s not well-connected to the refineries along the Gulf Coast, where most of the country’s refining capacity is located, analysts say.

The Chevron refinery is particularly big and important to the West Coast market, said Tom Kloza, chief oil analyst at Oil Price Information Service.

It produces about 150,000 barrels of gasoline a day — 16 percent of the region’s daily gasoline consumption of 963,000 barrels, he said.

With inventories of gasoline in the region already low compared with the rest of the country, pump prices in California and elsewhere on the West Coast will soon average more than $4 a gallon, Kloza said.

Chevron spokesman Lloyd Avram said he did not have an update on when the refinery could be restarted and declined to comment on what kind of impact the shutdown might have on the gasoline market.

Analyst Patrick DeHaan of the website warned that Oregon and Washington would also see a price hike in the coming weeks.

“Spot prices have already increased by as much as 30 cents per gallon in some West Coast markets and that’s before the refinery damage has been fully assessed,” DeHaan said.

The fire began around 6:15 p.m. Monday, about two hours after a vapor leak of hydrocarbons similar to diesel, said Heather Kulp, a Chevron spokeswoman.

“At approximately 6:30 p.m., the volume increased and personnel evacuated the area,” she said at a news conference Tuesday. “The hydrocarbon vapor then ignited and a fire occurred.”

Kulp said there were no explosions, and staff at the refinery initiated an emergency response immediately after the fire started. The cause is under investigation.

The black smoke and flames from the fire could be seen for miles from the refinery that has long been the target of complaints and lawsuits by citizens who live near it in Richmond, a mostly low-income community that is host to five major oil refineries.

State workplace safety investigators cordoned off the entire crude unit, and no one was being allowed to enter without approval from the state, said Erika Monterroza, a spokeswoman for California’s Division of Occupational Safety and Health, or Cal/OSHA.

“Investigators have notified us that Chevron’s emergency response was excellent,” Monterroza said. “Everyone was evacuated and Chevron set up an exclusion zone to keep people out of the area.”

Still, Richmond Mayor Gayle McLaughlin said the fire was unacceptable.

“We live with the day-to-day risk of this type of manufacturing and refining that has an impact on our community with pollutants being released, but with the accident that happened yesterday, that doesn’t mean it’s acceptable, because it’s not,” McLaughlin said in a KCBS radio interview.

Doctors Medical Center in San Pablo, a town near the refinery, said 181 people sought help complaining of eye irritation and breathing problems. The hospital said most of the patients were released after being seen.

Kaiser’s Richmond Medical Center said it had assessed and treated more than 200 people with respiratory concerns in its emergency department. No patients were admitted to the facility, said Jessie Mangaliman, a spokesman for Kaiser Permanente.

Air quality officials said the region’s 27 monitoring stations detected some increases in pollution.

“Those impacts have now decreased significantly over time since the fire was put out yesterday,” said Eric Stevenson, director of technical services for the Bay Area Air Quality Management District, which is responsible for monitoring the site’s compliance with air pollution laws.

Stevenson said the impacts were still well under state and federal air quality limits, but air samples were undergoing lab testing for toxins to which people may have been exposed.

U.S. Environmental Protection Agency officials last inspected the site and Chevron’s legally mandated risk management plan in 2010 and found no violations.

Residents said they heard loud blasts around the time the fire broke out, although Chevron officials could not confirm those reports.

Daniela Rodriguez, 23, told the Contra Costa Times she heard a “big boom” and about an hour passed before she received an automated call from Contra Costa County to remain indoors.

“I was feeling kind of nauseous and light-headed” from the smell, she told the newspaper.

The blaze in the refinery’s No. 4 Crude Unit was contained in about five hours, Chevron said in a statement on its website. Three employees suffered minor injuries and were treated at the scene, according to Kulp.

County health officials used automated calls to warn residents of Richmond, San Pablo and the unincorporated community of North Richmond to stay inside and cover cracks around doors with tape or damp towels. The order was lifted later Monday night.

A fire at the refinery in January 2007 injured two workers and spewed low levels of sulfur dioxide and other toxins into the air. County officials said then that it was not enough to harm the health of nearby residents.

The 2007 fire shut down the refinery for most of that year’s first earnings quarter.


AP writers John Marshall and Garance Burke contributed from San Francisco. Energy reporters Jonathan Fahey in New York and Sandy Shore in Denver also contributed to this report.

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