Oil Refinery Fire Sparks Fears Of A Fuel Shortage In Four States

The federal government declared a regional emergency in the states of Illinois, Michigan, Indiana, and Wisconsin following a fire that broke out at a BP-owned refinery in Whiting, Indiana.

The fire erupted last week and was quickly extinguished but BP said it would need to shut down some units that were affected by the accident. The company is currently assessing the damage to establish when the shut-down units could be restarted.

According to the Department of Transportation and the Federal Motor Carrier Safety Administration, the incident had affected the supply of gasoline, diesel, and jet fuel across the four states, which prompted the emergency declaration. The four states get a quarter of their fuel supply from the Whiting refinery.

The Whiting refinery - the largest refinery in the Midwest and the sixth-largest in the country - is capable of processing 440,000 barrels per day of crude oil.

The refinery is located in PADD 2 - a region that is running at 95.4% of capacity as of August 19, according to the latest weekly EIA data. This is the highest capacity utilization in almost a year, contributing 3.997 million barrels of crude oil per day.

The Whiting refinery can produce 10 million gallons (~277,000 barrels) of gasoline, 4 million gallons of diesel, and 2 million gallons of jet fuel each day; it is capable of producing enough gasoline every day to support the daily travel of 7 million cars, the refinery factsheet claims. 

Under the emergency declaration, the four states will receive the fuel they need from other sources to avoid shortages. The outage has already pushed fuel prices higher in some parts of the affected area. AA data showed that as of this weekend, gasoline prices across the four states ranged between $3.62 per gallon in Wisconsin to $4176 in Illinois.

By Charles Kennedy for Oilprice.com

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