Experts: Refinery fire will boost gas prices on West Coast
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RICHMOND, Calif. - A major fire at one of the country's biggest oil refineries that sent scores of people to hospitals with 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.
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.
Gas prices in Washington were well over $4.00 a gallon in the spring and early summer after a fire damaged BP's Cherry Point refinery in Ferndale.
Chevron's refinery is particularly big and important to the 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 West Coast's daily gasoline consumption of 963,000 barrels, according to Kloza.
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 per gallon, Kloza said.
"It's a very key refinery," he 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.
Price Futures Group oil analyst Phil Flynn said pictures of the fire suggested it would not be back on line soon.
Flynn predicted motorists would see higher prices at the pump almost immediately.
"I'm hearing five to 10 cents, but I think it's probably going to be double that," he 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.
Smoke and flames from the fire could be seen for miles.
Doctors Medical Center in San Pablo, a town near the refinery in Richmond, said about 200 people sought help. Kaiser's Richmond Medical Center also said several dozen people came to the emergency room complaining of shortness of breath, but none was seriously ill.
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 that 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.
Randy Sawyer, chief environmental and hazardous materials officer for the county's health services agency, said any kind of smoke can be toxic but added: "In this smoke, there can also be all kind of byproducts that can be toxic."
The agency had four teams of inspectors testing air quality, Sawyer said.
Trisha Asuncion, a hazardous materials specialist with the county, told the San Francisco Chronicle that no hazardous compounds had been detected in the air.
County health officials used automated calls to warn residents of Richmond, San Pablo and the unincorporated community of North Richmond to stay inside, turn off heaters, air conditioners and fans, and cover cracks around doors with tape or damp towels. The order was lifted later Monday night.
Bay Area Rapid Transit also shut down three train stations near the plant for several hours.
To the south, Oakland police issued a community advisory suggesting residents of the North Oakland Hills area close all windows and doors and turn off air conditioners.
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.
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.
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.
Gas prices in Washington were well over $4.00 a gallon in the spring and early summer after a fire damaged BP's Cherry Point refinery in Ferndale.
Chevron's refinery is particularly big and important to the 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 West Coast's daily gasoline consumption of 963,000 barrels, according to Kloza.
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 per gallon, Kloza said.
"It's a very key refinery," he 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.
Price Futures Group oil analyst Phil Flynn said pictures of the fire suggested it would not be back on line soon.
Flynn predicted motorists would see higher prices at the pump almost immediately.
"I'm hearing five to 10 cents, but I think it's probably going to be double that," he 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.
Smoke and flames from the fire could be seen for miles.
Doctors Medical Center in San Pablo, a town near the refinery in Richmond, said about 200 people sought help. Kaiser's Richmond Medical Center also said several dozen people came to the emergency room complaining of shortness of breath, but none was seriously ill.
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 that 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.
Randy Sawyer, chief environmental and hazardous materials officer for the county's health services agency, said any kind of smoke can be toxic but added: "In this smoke, there can also be all kind of byproducts that can be toxic."
The agency had four teams of inspectors testing air quality, Sawyer said.
Trisha Asuncion, a hazardous materials specialist with the county, told the San Francisco Chronicle that no hazardous compounds had been detected in the air.
County health officials used automated calls to warn residents of Richmond, San Pablo and the unincorporated community of North Richmond to stay inside, turn off heaters, air conditioners and fans, and cover cracks around doors with tape or damp towels. The order was lifted later Monday night.
Bay Area Rapid Transit also shut down three train stations near the plant for several hours.
To the south, Oakland police issued a community advisory suggesting residents of the North Oakland Hills area close all windows and doors and turn off air conditioners.
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.
This is ridiculous....the refineries do not start these fires on purpose. When they shut down, they lose money and their competitors make more money. Some people understand nothing about how this business works... Maybe instead of whining about the price of gas, all you selfish folks should feel glad that nobody was seriously hurt, and all the hard working people that work there got to go home to their families at the end of the day instead of to a funeral home. Refinery workers risk their lives every day to bring you fuel.Â
Of course there was a fire! Prices were dropping, can't have that!Â
Funny how these oil companies are making record profits hand over fist and can't seem to build or update or upgrade refineries. Â Sounds like a monopoly to me,and price fixing and gouging. Â but according to our lovely government officials there is nothing wrong going on. Â Hmmm here we go again I wonder how I am going to afford to drive to work now.
Oil companys are more than willing to build new refinerys but why would they when it costs way more than it should with all of the government regulations and citys denying them building more with the whole "not in my town" attitued. Its more the governments fault than anything on top of oil speculation. We have only 1/2 of the refinerys we had 50 years ago. Why do you think that is?
If the experts say this will cause the prices to go up on the West coast it must be true. OR it is the latest excuse to raise prices yet again. Remember how fast prices went up in February and then immediately went down when Maria Cantwell threatened to call them to capitol hill.
Exxon makes 2 cents profit on a gallon of gas. The goverment makes 48 cents.
And y'all wanna bash the oil companies? That's embarassing.
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Government controlled education at its finest.
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 @bobalouie Really? Where did you find that data? Washington consumers pay, as of January 2012, 55.9 cents for State and Federal taxes. Subtract that from what you pay at the pump and what do you get? Between the stations (who's profit margins are extremely low) and the gas companies (who have reaped billions), I would say your argument isn't going to sway too many people?
@bobalouie And yet it is the feds who are always in the red.
Those fires should be put out immediately with AFFF and or a large spray pattern. Also a burst above to cool it down. Going side to side til its out. Moving in and put that dang fire out. Every single person working there knows how to put that fire out and use the shutoff valves. There should be tons of fire bottles and carts around and including AFFF. Ridiculous considering the amount of people living nearby that this fire and others get out of hand.Â
I've actually worked on one of these fuel farms and I can tell you there are numerous shutoff valves all along the way. Its pure baloney these things get out of hand I think. They can do a controlled burn but take forever to put out a fire? The amount of smoke and the light color to it as opposed to the normal pitch black tells me it was a small fire at least during the photo take. It would be quite easy to go around any stinking spill or broken valve or line by using temporary hose lines that can easilt transfer the fuel with shutoff valves every 50 to 100 feet. The valves are numerous and very easy to install by pulling the levers back and lock in place and then you zip tie or wire the locks back. I may be an old woman now but I had many tough job believe you me.
I just love it. A business has a problem on their hands with a fire and gets to make sure they don't take any financial hit whatsoever, just pass it on to the consumer.
So you're telling me they don't have fire insurance that pays off huge if this were to happen?
 @ducati Of course they have insurance. they also have a very large deductible to hold the premiums down.
Any and all reasons they can to increase prices, but even when they fix the problems the prices don't decrease back to where they were before the "crisis".
4 dollar increase... Why is it not limited to Chevron and Texaco? They are the same company for those that dont know. Anyone else notice this seems to be par for the coarse.  Fire, fire and fire. It's one fire after another, from refinery to refinery. I almost suspect some high up conspiracy in the oil companies to have someone sabotaging them for deliberate price increases. Every dime gets taken from consumers to rebuild there blunders and neglect of equipment within the refineries.Â
It seems odd that they would not prepare for these outages. To serve their customers fairly and efficiently they would have considered this and had some sort of a backup plan so that they would not have to raise prices. I guess when you have all of the cards you don't need a back up plan.
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 @Elvis I agree. My initial reaction is that this is not an accident - but that could be an emotional reaction to the high gas prices, and at the moment, is not backed by any reliable data.
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Still, there seems to be a lot of refinery issues over the course of the last few years that you'd think would've been addressed by now, for safety reasons alone.
I think that the fire here at Ferndale was "testing" the waters,  just to see what the oil companies could get away with as far as gouging the prices.... Oh,,,, and by the way.,,,,, Cantwell..... hows that investigation on price gouging going????????
So, thats like going to a store, having the employee drop something, than saying opps, now will have to pay twice as much for the next one. Even though it's their fault, we pay the price.
 @SkaBob Yep, "I break it, you buy it"..doesn't seem right on so many levels.
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 @Dannyboy Government subsidies. That's how.Â
Time to have another beer, methinks. All apart of my "drive less, drink more" mantra......
 @Speedofacobra I like your way of thinking!
poor oil companies ,  could you be  more sophisticated  ripping  off consumers !Â
I suppose the gas companies would refuse to use their record profits to offset costs for consumers. My god, we are like food to them.
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This is why its insane to let them buy up the alternate energy patents.
http://www.whokilledtheelectriccar.com/
 @NorthwestEconomist That documentary has been sliced and diced to show that it's nothing more than a propaganda piece. The mileage claims have been proven wrong as have the economics. GM ended the EV1 program because it lost of a billion dollars with no end in sight, not because of oil company involvement.
 @Middle Ground How about the toyota ev rav4 and their 30 million settlement with Chevron?
 @NorthwestEconomist Who killed the electric car is a great film, people should also watch Gashole, it is very eye opening .
Shouldn't the headline read, "...refinery fire artificially inflates gas prices..." ??!??!?!
Why is it that the gas companies are making more and more profit every year and claiming still they need to raise prices every chance they get?
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@kittykat1912 isn't oil sold on the open market?
"BOHICA" (bend over, here it comes again)
 @cawlnaduckaduck Yup, another 'necessary' run up of the prices. Just what they needed, an excuse.
Just another staged refinery fire so that the oil companies and commodity trader keep their grossly high profits while those who already struggling to make ends meet will have to skip a meal in order to pay for gas to get to work.Â
Ever notice the past few years when gas prices dramatically drop there is a refinery fire. Coincidence? I think not.
 @Luciferian When have gas prices dramatically dropped in the last few years?
My wife borrowed my car today and promised to fill it up. Â When she sees the prices at the pump maybe it will teach her a lesson. Â
great reporting komo (the National Enquirer of the West).
This just in:Â Phelps failes to get another gold. Gas prices rise in Seattle.
Pardon me whilst I fish my surprised face out of my other pants.
Damn it! I drove past Safeway in Everett this morning and gas was at 3.49 a gallon. As I was driving past an hour later it went up to 3.56. Seriously? It was just coming down enough where I didn't have to sacrifice bills to get gas in my car to go to work. Grrrrr.Â
 @HippoLady29 This is exactly what tanked the economy to begin with. No one seems to want to admit it though. People could make a house payment or buy gas and groceries but couldn't do both. Food and getting to work are "right now" issues. The house payment was a "next couple of weeks" issue so guess which won?
Anytime there is an "incident" at any refinery, it's an automatic increase in gas prices in WA. This is just an open invitation to more deeply pad their endless pockets by gouging consumers. And once word hits the airwaves, look out because the hikes are gonna come fast and furious. Summer, winter, spring, fall, low demand, high demand, fingernail broken, they have their finger on the rising price trigger and the consumer is the victim.
SHOCKING! They'll use anything as an excuse to raise prices. Sometimes I wonder if the purposely set the fires.
Because we don't have refinery's in Washington or anything.... Speculation raising the prices again.
Gas prices go up because of a refinery fire in California. Still plenty of gas for everyone though. No out of gas signs.
If this comment doesn't get 100 likes, gas prices will raise 45 cents by tomorrow.
@Anim8ed I haven't down the road yet today...propably already increased by at least .10, glad I filled up night before last.
lol
How does this puny fire and it is puny raise prices of fuel already in the tanks in the ground at the gas stations 1000 miles away? We have a refinery in Anacortes Washington among others. I know we can't use it due to ridiculous laws that say we must ship our fuel out of the area though.
Hey look, its a volcano erupting in New Zealand. Gas prices are epected to rise due to shifting of tectonic plates possibly interupting the flow of oil to the wellheads in several places in the West Indies and due to civil unrest in Switzerland a further increase. It seems that may be temporary as all parties there choose to remain neutral in the unrest.   Â
 @Granny_MAC There are actually two refineries in Anacortes. Shell and Tesoro.
 @Granny_MAC There are 4 major refineries in this state (and 2 little ones.) There is no law requiring the gasoline to be shipped out of state. In fact, almost all of our fuel comes from those refineries.
 @Granny_MAC Didn't you know the gas magically appears in the tanks from the source at that very instance so they have to charge accordingly <sarcasm>