A large fire at Chevron Corp.'s (CVX) Richmond, Calif. refinery has been extinguished, even as California drivers brace for the impact that a prolonged outage could bring to gasoline and diesel prices in the state.
The Richmond Police Department dispatcher said the fire was "completely out" shortly before 10 a.m. EDT. Chevron spokesman Lloyd Avram said that the main fire has been extinguished, and that safety officials are allowing "a small controlled burn," a safety measure intended to reduce the escape of pollutants into the atmosphere. The company didn't provide an update on production at the 245,000-barrel-a-day facility, which is the largest in the San Francisco Bay Area and accounts for nearly 10% of the refining capacity in the U.S. West Coast.
Paul Sankey, an analyst with Deutsche Bank, wrote Tuesday that the refinery is likely to be out for several months, and could translate into a 20 cent per gallon bump in California gasoline prices, some of the highest in the country. On Tuesday, regular unleaded gasoline in the state averaged $3.859 per gallon, above the national average of $3.634 per gallon, according to the AAA. The premium traders paid for Los Angeles Carbob gasoline delivered in September versus October Nymex gasoline jumped 10 cents per gallon.
The fire broke out around 6:15 p.m. local time Monday at a crude distillation unit, which was also leaking petroleum, Chevron said in a filing with the California Emergency Management Agency, adding that there were no fatalities. Authorities had residents shelter in place to avoid noxious fumes, but the order was lifted by Contra Costa County Health Services at 11:31 p.m. Monday. Chevron said all its employees and contractors are safely accounted for; three employees suffered minor injuries and were treated at the refinery, the company said.
The Doctors Medical Center in San Pablo, Calif. said in a statement that as of 11:30 p.m. Monday, about 200 people sought attention for respiratory problems, and more arrived throughout the night.
Chevron has shut No. 4 CDU, where the fire broke out, but a spokesman declined to discuss operations at the other parts of the plant. The fire caused the refinery to emit large clouds of sulfuric acid and nitrogen dioxide, the company said in a filing. "We will not speculate on the cause of this incident," Chevron said in a prepared statement. "Our priority right now is containing the fire and protecting the health and safety of our employees and community."
The Richmond refinery runs crude from Alaska and the Middle East, a company spokesman said. Its effect on global oil markets "will depend on the length of the closure. If long, then of course it backs out more crude," spilling unexpected supplies into the prompt market and driving down spot premiums, weakening the market structure, a Singapore-based crude oil trader said.
On Aug. 1 Chevron had reported an incident at the same refinery, when it reported a flaring event to California state environmental regulators after a compressor failure caused a release of sulfur dioxide and hydrogen sulfide. Chevron said at the time that the refinery would continue to supply products to its customers.
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