When fire forced the shutdown of Chevron Corp.’s El Segundo refinery last month, the impact was quick and blunt: Local diesel supplies fell by 12 percent, sending prices above $3 a gallon.
The resulting howls from truckers and others underscored just how vulnerable the L.A. region and the nation remains to events as mundane and mysterious as the inner workings of a petroleum refinery.
Across the U.S., outages at 14 different crude oil refineries in the past month have caused gas prices to skyrocket. Units at refineries run by Chevron, BP PLC, Valero Energy Corp., ConocoPhillips and Sunoco Inc. have had unplanned shutdowns, taking roughly 4 million barrels of gasoline off the market, said Dave Kolk, president of Complete Energy Services, an energy trading firm in Corona.
Meanwhile, the average gallon of self-serve regular in the Los Angeles area jumped more than 11 cents to $2.736 last week, sending gas prices 68.5 cents higher than they were a year ago. Statewide, prices rose to $2.716 , 66.1 cents higher than a year-ago, giving California the highest gas prices in the nation. By comparison, the average nationwide price for regular gasoline rose to $2.55 per gallon in the government’s latest survey, up 18 cents in a week.
L.A.’s seven refineries closely guard information about their operations, presumably because any hiccup can play havoc with spot fuel prices. Traders traffic in rumors about which plants may suffer unscheduled shutdowns.
All of which leaves no clear answer as to whether refinery issues will continue to exacerbate fuel prices in coming months other than the fact that the refineries themselves are old and subject to breaking down. The last oil refinery in California went up in 1970.
Last year, supplies were strained when Exxon Mobil’s refinery in Torrance, the third largest in the state with the capacity to refine 150,000 barrels of crude per day, saw slightly lower production levels while undergoing a major round of planned maintenance and upgrades.
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The full story
is available in the August 22 edition of the Business Journal.
