Fire at Refinery Raises Safety, Gas Price Issues

An explosion and fire at a Chevron Corp. refinery Thursday--the second such serious accident in California in a month--raised safety concerns and the potential for still-higher gasoline prices.

State and local officials said that the recent spate of refinery incidents points to weaknesses in the state’s regulatory apparatus and in the plants’ own safety policies.

And the loss of refinery capacity in such mishaps has curtailed the supply of gas and already increased prices statewide.

No one was known to have been seriously injured in the blast and fire in a processing unit at the refinery in Richmond, said Fred Gorell, a spokesman for San Francisco-based Chevron. However, some employees reported suffering respiratory problems and people living near the refinery were advised to remain indoors.

Witnesses said the explosion felt like an earthquake. A thick plume of smoke from the fire was visible from Chevron’s headquarters building across the bay in San Francisco, about 10 miles to the southwest.

The Chevron accident comes just a month after an explosion and fire killed four workers at a Tosco Corp. refinery in nearby Martinez. A fifth worker was badly burned in the Feb. 23 accident.

The outcry afterward led Tosco to shut down the oil refinery, which has a capacity to process 156,000 barrels of crude oil a day into gasoline and other petroleum products. Since then, the average price of unleaded self-service gasoline in California has jumped nearly 12 cents to $1.229 a gallon, according to Energy Information Administration statistics.

Assemblyman Tom Torlakson (D-Antioch) has been trying to schedule a hearing of the Assembly Labor and Employment Committee to examine the refineries and Cal/OSHA’s oversight.

Cal/OSHA dispatched investigators to the Richmond refinery, one of the largest in the state, Thursday afternoon.

“I dare say a significant percentage of the oil refineries and processing infrastructure has exceeded its [expected] life,” said a state safety official who spoke on condition of anonymity. “It’s a statistical certainty that the older things get, the more they break.”

Chevron’s Gorell disputed that contention, noting that even though the original refinery at Richmond was built in 1902, significant investment was made in the mid-1990s to upgrade the refinery to produce the cleaner-burning gasoline required in the state beginning in 1996.

“It is a very modern refinery,” Gorell said. “We take safety very seriously and our people are constantly training on emergency response procedures.”

John Gioia, the Contra Costa County supervisor whose district includes Richmond, said none of the four refineries in that county has written policies requiring workers to report “near misses,” or near accidents, and noted that the state’s ability to regulate them is limited.

“No one has the authority to order refineries to make certain safety modifications,” Gioia said. “We would rather have a stronger state agency.”

According to local press reports, the Tosco facility suffered eight major accidents--defined as explosions, large fires or massive releases of toxins--from 1989 through 1997, the most in the county. The Chevron refinery in Richmond, which can refine 240,000 barrels of crude oil a day, had six serious accidents, the second-highest.

Refining consultant John Vautrain said that major oil companies spend significant time and money keeping their refineries safe because the expense of an accident and the downtime when products can’t be made exceeds any savings from cutting corners.

“Refineries do have explosions,” said Vautrain, manager of the Long Beach office of Purvin & Gertz, a Houston-based consulting firm. “The company has an interest in preventing these sorts of things because it’s cheaper to prevent an accident than to fix it.”

It has been estimated that Tosco is losing $1 million for each day its Martinez refinery remains closed.

The Chevron fire occurred in a hydrocracking unit that produces gasoline components and jet fuel. No cause has been determined yet, Gorell said, adding that the rest of the refinery is operating normally.

Gasoline market tracker Trilby Lundberg, editor of the Lundberg Letter newsletter, which follows market trends, said it is too early to determine how the accident will affect prices, which have been on the rise because of higher oil prices and refinery problems in California.

California gas prices are volatile because very few refineries outside the state make the special gasoline required to meet the state’s stringent air quality standards, she said.

In addition to the closed Tosco refinery, a gasoline unit has been out for more than a week at Arco’s refinery in Carson. It should be back in operation by today, a refinery spokesman said.

The gasoline refining unit at the Exxon refinery in Benecia also is broken and may be out for weeks, that company said.

Gasoline to fill the gap already is traveling to California in ships from the U.S. Gulf Coast and elsewhere, Lundberg said.

West Coast oil traders told Reuters news service that gasoline prices were “going through the roof” on word of the blast. And the California Independent Oil Marketers Assn. warned that supplies of unbranded gasoline, the kind sold by independent gasoline stations, are running extremely low.

Gorell said that Chevron does not know how long the processing unit will be out of action, adding that the incident “may well have an impact but we don’t think it will have a significant effect on our ability to supply our customers.”