W. Coast gas prices rise; officials wait to enter refinery
SAN FRANCISCO (AP) - A fire at one of the nation's largest oil refineries helped push West Coast gas prices close to $4 a gallon Thursday, as the same federal team that investigated the Gulf Coast spill waited to inspect the unit that was knocked out by the blaze.
The U.S. Chemical Safety Board team was standing by with state and company inspectors to do structural and environmental tests to see if it was safe to enter the unit and determine when production might resume after the Monday night blaze.
In all, five separate investigations will be done.
"This is an important accident in its own right, it was a large fire and has the potential to affect fuel supplies and prices," said Dr. Daniel Horowitz, a member of the chemical board.
The average price of regular gasoline jumped in California from $3.86 a gallon on Tuesday to $3.94 on Thursday, according to the website GasBuddy.com. In Washington state, the average gas price rose from $3.72 to $3.75 per gallon overnight. A week ago, the average price in Washington state was $3.68.
Some experts expect the disruption in production to last for weeks and push prices beyond $4 a gallon.
"It'll depend on Chevron getting their facility repaired," said Patrick DeHaan of GasBuddy.com. "The increases will be felt in California, Oregon and Washington, with perhaps some residual issues in Arizona and other nearby states."
The Richmond refinery produces 16 percent of the region's daily gasoline supply. The fire knocked out a unit that makes a specialized blend of cleaner burning gasoline that satisfies air quality laws in California, Oregon and Washington.
Sean Comey, a spokesman for Chevron, said myriad factors were pushing gas prices higher, not just the loss of one unit at the refinery.
"There are a variety of economic conditions like rising crude and ethanol costs, which also affect what consumers pay at the pump," he said.
Comey said the refinery continues to produce gasoline, diesel and jet fuel but in reduced amounts.
Experts said inventories of the cleaner burning gas already were low. With the refinery's output in question for what could be weeks, analysts say prices could reach $4 a gallon as soon as Friday.
"California has the cleanest burning gas in the nation, so this is definitely a market disruption," said Rayola Dougher, a senior economic adviser with the American Petroleum Institute.
California can't replace those supplies with imports from Washington state, Asia and the Gulf Coast, so it's more difficult to ease the impact of the lost production, Dougher said.
Some analysts believe other refineries in California could make up for the shortfall, if Chevron's capacity remains limited by the fire.
Tradition Energy analyst Addison Armstrong said California refineries have been producing about 6 million barrels a week, down from 7 million a week last month.
"That should be enough capacity to make up for the loss of output from Richmond," he said.
Comey said Chevron could not estimate when the damaged unit would be back online. The company also said it did not know when investigators would have access to the site.
Still, government investigators expected testing to be completed Friday.
Once the unit is open to inspectors, the process of determining the cause of the vapor leak that led to the towering fire can start. Then, after evidence is collected, Chevron can begin getting the unit back up and running.
Horowitz said investigators will also be evaluating Chevron's emergency response system and other concerns raised by the community.
Hundreds of people contacted attorneys and were expected to file claims against Chevron for breathing problems and other health issues stemming from the thick black smoke that spewed from the facility during the fire.
The company has set up a compensation funds and distributed phone numbers that can be used to file claims. The initial phone lines were overwhelmed by callers, and the company said it was arranging help to meet the demand.
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AP Business Writer Sandy Shore contributed to this report from Denver.
The U.S. Chemical Safety Board team was standing by with state and company inspectors to do structural and environmental tests to see if it was safe to enter the unit and determine when production might resume after the Monday night blaze.
In all, five separate investigations will be done.
"This is an important accident in its own right, it was a large fire and has the potential to affect fuel supplies and prices," said Dr. Daniel Horowitz, a member of the chemical board.
The average price of regular gasoline jumped in California from $3.86 a gallon on Tuesday to $3.94 on Thursday, according to the website GasBuddy.com. In Washington state, the average gas price rose from $3.72 to $3.75 per gallon overnight. A week ago, the average price in Washington state was $3.68.
Some experts expect the disruption in production to last for weeks and push prices beyond $4 a gallon.
"It'll depend on Chevron getting their facility repaired," said Patrick DeHaan of GasBuddy.com. "The increases will be felt in California, Oregon and Washington, with perhaps some residual issues in Arizona and other nearby states."
The Richmond refinery produces 16 percent of the region's daily gasoline supply. The fire knocked out a unit that makes a specialized blend of cleaner burning gasoline that satisfies air quality laws in California, Oregon and Washington.
Sean Comey, a spokesman for Chevron, said myriad factors were pushing gas prices higher, not just the loss of one unit at the refinery.
"There are a variety of economic conditions like rising crude and ethanol costs, which also affect what consumers pay at the pump," he said.
Comey said the refinery continues to produce gasoline, diesel and jet fuel but in reduced amounts.
Experts said inventories of the cleaner burning gas already were low. With the refinery's output in question for what could be weeks, analysts say prices could reach $4 a gallon as soon as Friday.
"California has the cleanest burning gas in the nation, so this is definitely a market disruption," said Rayola Dougher, a senior economic adviser with the American Petroleum Institute.
California can't replace those supplies with imports from Washington state, Asia and the Gulf Coast, so it's more difficult to ease the impact of the lost production, Dougher said.
Some analysts believe other refineries in California could make up for the shortfall, if Chevron's capacity remains limited by the fire.
Tradition Energy analyst Addison Armstrong said California refineries have been producing about 6 million barrels a week, down from 7 million a week last month.
"That should be enough capacity to make up for the loss of output from Richmond," he said.
Comey said Chevron could not estimate when the damaged unit would be back online. The company also said it did not know when investigators would have access to the site.
Still, government investigators expected testing to be completed Friday.
Once the unit is open to inspectors, the process of determining the cause of the vapor leak that led to the towering fire can start. Then, after evidence is collected, Chevron can begin getting the unit back up and running.
Horowitz said investigators will also be evaluating Chevron's emergency response system and other concerns raised by the community.
Hundreds of people contacted attorneys and were expected to file claims against Chevron for breathing problems and other health issues stemming from the thick black smoke that spewed from the facility during the fire.
The company has set up a compensation funds and distributed phone numbers that can be used to file claims. The initial phone lines were overwhelmed by callers, and the company said it was arranging help to meet the demand.
___
AP Business Writer Sandy Shore contributed to this report from Denver.
you do know that chevron bought up the battery patient from that guy who made a 200 mile range battery don't you? they are waiting until the oil runs dry then they will be the battery king of the world. if the leaf was cheaper than $38 K i would go buy one but i don't drive far enough to make it cost effective untill they get it down to $20K.
Dirty trick ! Oil companies always try to raise the oil/gas prices.....this is a scheme !
Why is it that there are forest fires and yet the price of wood products don't go up? Â
Big Oil;...... "Bend over and cough please, Thank you."
I can't wait until Oil runs out completely and we have no choice but to find and an alternate source. Were all just Big Oils Bit(h !!! Â
And gas prices for people in Oklahoma will go down because of this but ours will go up, right?Â
 @Citizen#3457899654 Red states: down. Blue states: up. Bet on it!
What President Obama really SHOULD do in this situation (if he could so) is...
(1) Declare that the refinery is critical to national security
(2) Send in the Army Corps of Engineers to fix the refinery and get it back online ASAP
(3) Send Chevron the bill for repairs
(4) Make it very clear that if Chevron fails to pay the repair bill or if they allow this kind of failure again, they will FORFEIT the entire refinery and it will be turned over, leased or sold to someone who will run it efficiently, safely and RELIABLY.
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We do the same to banks when they fail. This refinery is much more critical to the security of the nation than is any but only perhaps the very largest of banks. The same basic set of rules should apply.
 @JLS1950 Da Comrade. Is velly guud idea......
I don't understand why they can't use some of their constant record quarterly profits to handle this. Why is it always on the consumers back?
@Klondiko I'm certain they are also insured. Usually this kind of insurance also includes provisions for lost profits as well as capital infrastructure. We're getting hosed. They aren't losing a red cent
 @Klondiko Would that be like "give 'us' back some of 'our' money"?
Build more dang refineries, create more jobs. Not rocket science.
 @DualLeads The oil companies have been very deliberately CLOSING refineries to shed excess production capacity so that they can sell their product at a higher price. And my guess here is that this failure was planned well in advance.
 @JLS1950 The reason the oil companies are not building new refineries is the stranglehold legislation the government has put on standards for new refineries.
 @Gino 1000% not true at all. We have so much excess refinery capacity in the United States that last year the United States exported 753 million barrels of refined fuel, most to Asia and South America. It not only has become our biggest export, but we are a net exporter (shipping out more than what we ship in).
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It is a complete crock of poop that there is a government caused lack of refinery capacity, and/or that we don't have enough capacity to meet demand.
I heard a cow died... McDonald's to raise burger prices
 @ducati Well, with corn and grain hurting due to the drought, it's costing more to feed the cattle - and more ranchers are clearing the herds because they can't afford the feed.
So don't be surprised to see that kind of increased prices.
funny how Chevron doesn't even know how much it will cost or how long it will be to have the refinery back up to 100% and all ready everyone is raising their gas prices. Of course they will pass the loss on to the user like all the other mega corporations.
Not only is the retail prices of gasoline and diesel up by at least a dime, the price of crude oil is up too. Coincidence?? Most likely not.Â
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Now that Cantwell has an assured place on the ballot (and sadly, a probable shoo-in for re-election) I will bet that she does absolutely nothing to ask why prices can't come down. Â
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It's time to cut exporting refined products out of this country. We need to build more refinery capacity, and we need to start really using the crude oil resources we know are available. And there has to be a full investigation of the big oil companies.
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 @Veteran Cantwell at least started asking the questions. Do you imagine that a REPUBLICAN would ask those questions??? Do you imagine that a Republican would vote to curtail gasoline exports? Do you imagine that a Republican would vote to reduce offshoring? Republicans understand which is the hand that feeds them, and even if they had smoking-gun evidence of sabotage at this refinery, they would do NOTHING.
I didn't know that was the only refinery to produce gas!?..What a crock of you know what!
 @F4I Study the history of Enron - how they conspired to shutdown generating capacity and transmission capacity in order to increase electricity wholesale prices and reap huge "windfall" profits. Now understand that most former Enron execs moved to other parts of the energy super-industry... like Chevron.
With the logic that many individuals state here about the oil companies and profit, oil companies should be charging as much as they could!! Not just $4 bucks but why not $10 or $20?? Who is going to stop them from asking this price??? I know I am stupid, so to all those who are smarter than me, please explain why "big oil" has not done this???????
 @MrClaybourne Because they know if they push it too much, people WILL stop buying and then they will lose profits.  It's a fine line they walk.
Greed!
Oil companies don't truly need a reason to hike up prices, I mean if a squirrel farts the gas prices go up. They have us by our man beans and they know it.
Sorry, but we have U.S. Senator who has stated in the past that she would work to get to the bottom of this baloney. This same U.S. Senator is up for re-election this year, I believe.
Now would be a good time to tell us how that fight is going, Ms. Cantwell!! This is complete BS.
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@ulquiorra They will, that's why they are going up here. BUT it will cost more to transport so CA gas will go up more than ours. Crude was going up when this happened, crude is 75% of the cost of gas. With a refinery down, and it will be down for quite awhile. (look up the fire up here for reference) SO plan on $4.00 or better between now and election time at least on the west coast.
Exactly what I was thinking.
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 @n9078jk4 Like you don't use ANY petro products to place your comments here!
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@n9078jk4 actually 6' 2".weigh 220 lbs.What do you commute in,a donkey cart?You were probably a defective sperm before my birth.
Good we can send you on the first manned flight to Mars then.
@Commenter87643 Plastic, I guess there is no plastic in your house. Lubercants. Guess that fan in your computer doesn't have any lubrication. You don't understand how much your life would change for the worse if there were not fossil fuels. A nice winter with no electricity, no oil, no LPG. No heat. You are a fool.
@n9078jk4 @Commenter876Â Â sorry,we're not all half monkeys on welfare,some of us have to commute.
The funny thing here, is that supply has not yet been affected but the prices have already increased overnight.
Supply and demand theory; what I learned in highs school economics class. Its not that theory at work that is causing the prices to escalate, its the petroleum consortium, artificially raising the prices because they know they can get away with it. No senator is going to challenge big oil; their pockets are lined with cash.
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Price gouging is already at work, and this has nothing to do with taxes, refining capacity because of liberals and greenies. I'm on Beale's side, I cant wait for you conservatives to jump on this and blame my camp
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@smokepole Drive past any gas station and observe the 1 or 2 satellite dishes on the roof of the station. Know what those are for? The station gets the order or signal to raise prices through that. Know who controls this? The oil companies.
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Its almost like that book I read in the 80s, "A Wrinkle In time"...
Lets see, the complainers, who claim this would be all solved if we had more refinery capacity, even though refined fuel is the number one US EXPORT, and the fact that the US is a net exporter of refined fuel, will be here complaining in 3, 2, 1...
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And along with them will be the ones who still believe it's all state taxes fault, because they are so high (hint, we're not even in the top 20% of states anymore when you compare total state gasoline taxes from all 50 states), and if it wasn't because of high state taxes, gasoline would be cheap - yup they'll be here in 3, 2, 1...
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The oil and gas industry manufactured the reduction of west coast capacity with Shell's attempt to shut down the Bakersfield refinery, even though it was their most profitable refinery in the world, and the state, county, and city of Bakersfield were ready to issue clean air and pollution waivers to allow the plant to operate without updates/upgrades. It is all very well documented. The refinery got sold to Flying J, which increased capacity and changed output to mostly diesel fuel, and when Flying J went bankrupt, the refinery got shutdown anyway.
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We are all paying the price from an international company's (hello, Shell isn't a US based company) greed. But Royal Dutch Petroleum sure does thank the good citizens of Washington, most of Idaho, Oregon and northern California for helping the balance sheet.
Excuses excuses....the gas IN the tanks and IN the distribution system didnt miraculously cost more to produce. but the Prices WILL BE UP and ARE now over $0.10.gal in the last 48 hours. but when the refinery is back on line and gas from it flows into the distribuition network...the price willy just slooooowly subside about half way back to where it started.
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BOHICA...
@Woodswalker yep, its being controlled by the petroleum companies, the actual supply being tightened
And then when the "Problem" is "fixed" the price will only go down by half the increased amount.
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You do the math!
 @SIN39 "the price will only go down by half the increased amount" - I doubt it will go down even that much!  Hey - perfect opportunity for oil co. to add to already obscene profits!