Gas Prices to Rise Along West Coast after Fire at Chevron's California Refinery

Yesterday at around 6.00pm a leak was discovered by workers at Chevrons large oil refinery in Richmond, California. The leak grew in size as workers were evacuated from the site.

Ryan Lackay, a 45-year-old employee at a chemical plant next door to the refinery, said that he saw “what looked like a lot of steam coming out of Chevron, way more than usual. I thought they must have blown a boiler. And then all of a sudden it just went whoosh, it ignited.”

The fire erupted in the No. 4 crude distillation unit (CDU), sending flames and smoke billowing into the air. CDU’s break oil down into hydrocarbon products that can be used to produce different petroleum products in other parts of the refinery. Unfortunately this plant only has one such CDU, and it could take months to repair, raising the possibility of a major disruption to fuel supply along the West Coast.

Authorities ordered more than 100,000 local residents to remain indoors in order to avoid toxic fumes that were settling over the area. The fire blazed for hours, but has now been contained sufficiently, although not extinguished, for the curfew to be lifted. A total of 200 people have had to seek medical care after complaining of respiratory problems.

It is common practice to shut down an entire refinery after a large fire, in order to perform a complete mechanical inspection of all processes. Back in February, a CDU at BP’s Cherry Point, Washington, refinery also caught fire and was shut down for three months.

How this fire will affect gasoline prices in the region is yet to be seen, but an increase should definitely be expected.

By. James Burgess of Oilprice.com