How many you in Northern California noticed gas prices creep up beginning about 10 days ago, long before the Chevron refinery fire?
That’s because Valero’s 170,000 bbl/day refinery in Benicia was shutdown for maintenance after a compressor failed in the Fluid Catalytic Cracker Unit. Valero was just completing repairs when fire shut out production in California’s second largest refinery, Chevron’s Richmond refinery. Chevron Richmond processes 245,000 barrels of petroleum per day and provides 25% of the gasoline for Northern California and half of the jet fuel used at Bay Area airports.
The fire seriously damaged the “Crude Distillation Unit” (CDU). The CDU, which provides one of the essential first steps in the refinery process, can be offline for a month or longer during the fire investigation and subsequent repair work.
California Spot prices for gasoline shot up 30 cents in the immediate aftermath of the Chevron refinery fire. Higher contract prices will make it worthwhile for refineries in Malaysia and Indonesia to ship refined product to California (yes, that really happens, to the detriment of fishermen and farmers in those countries). This will balance the supply / demand equation some, but in the meantime, you can expect to pay slightly higher prices at the pump.
The two other Bay Area refineries, Tesoro and Shell, are located in Martinez, CA. They each process about 165,000 barrels of oil per day.
Photo: “View from my deck.” CC-BY NC 2.0 from Stephen Schiller.