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Fire may push gas up to $4 a gallon on West Coast

Refinery damage seen as forcing pump-price rise

- The Washington Times - Tuesday, August 7, 2012

RICHMOND, Calif. — A major fire at one of the country's biggest oil refineries that put scores of people in the hospital 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 monitoring 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.

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, said Mr. 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, Mr. Kloza predicted.

"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 he declined to comment on what kind of impact the shutdown might have on the gasoline market.

Price Futures Group oil analyst Phil Flynn said photos of the fire suggested it would not be back on line soon.

Mr. Flynn predicted motorists would see higher prices at the pump almost immediately. "I'm hearing 5 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."

Miss Kulp said there was no explosion, 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 no one was seriously ill.

John Marshall, Jonathan Fahey and Sandy Shore contributed to this report.

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