March 28– Mar. 28–Gas prices in California and the Bay Area have jumped following the temporary shutdown of the Valero refinery in Benicia.
The average price of gas in California was $3.54 per gallon on Wednesday — nearly a dollar higher than the national average of $2.67 per gallon, according to AAA. California gas prices saw a weekly increase of 17 cents a gallon.
The Valero refinery was temporarily shut down Sunday after an issue at the refinery caused the release of particles of petroleum coke, a byproduct of the oil-refining process.
That shutdown, along with problems at a Phillips 66 refinery in Carson (Los Angeles County), have caused gas prices in the state to spike, according to AAA Northern California spokesman Michael Blasky.
“The reason prices jump so quickly when one or two refineries have issues is California has more environmental regulations on fuel,” Blasky said. Gasoline in California has to get extra refining to meet extra environmental and quality regulations, but that means the state cannot easily import fuel when its refineries have problems.
Prices in the city of San Francisco averaged $3.79 per gallon Wednesday, according to AAA.
A fire broke out this month at a crude processing unit of the Phillips 66 Los Angeles Refinery in Carson, according to Phillips 66 spokesman Dennis Nuss. The unit remains shut while the company investigates and makes repairs, but the rest of the Carson and nearby Wilmington facilities are operating.
“We do not want to speculate on how long the crude unit will be down or what impact this would have on the market; however, we are working to ensure that we will meet our contractual supply obligations,” Nuss said.
Valero referred a request for comment to a notification it provided to the city of Benicia on Tuesday. The statement cited, in part, a problem with a flue gas scrubber on Saturday, which led to emissions of small particles and carbon monoxide. As the problem worsened, Valero decided to shut down the refinery’s processing units.
“When you have an unexpected refinery outage, it is cause for concern,” said Dan McTeague, senior petroleum analyst at GasBuddy.com. “It’s not so much that prices have gone up or will go up, it’s a question of how long they’ll be offline, and we have kind of an indefinite time.”
AAA has estimated that the refinery issues would cause a price increase of 15 to 25 cents per gallon in California.
“Because our market is so constrained and so isolated … as soon as you see reports of a production slowdown, that affects wholesale prices almost overnight,” Blasky said.
Gas prices are also rising nationally, as is typical during the lead-up to the summer travel season. But this week’s price spike in California is “definitely” related to the refineries’ production problems, Blasky said. Hawaii usually has higher gas prices than California, he added — but that’s not true this week.
The Valero refinery also had issues with a unit called the Fluid Coker on March 11, which led to dark plumes being emitted from the refinery.
Benicia residents weren’t satisfied with Valero’s response to the problem.
“There’s been a lot of talk on various social media sites and a lot of disappointment in the community about being exposed, and continuing the question of why did it take so long to shut the refinery down?” Mayor Elizabeth Patterson said. “The question seems simple on the face, that you had this emission going on for almost two weeks. … It wasn’t until it got worse during the weekend that it got shut down.”
Andrés Soto, a Benicia resident and the Richmond community organizer for Communities for a Better Environment, said he could see black smoke from the refinery for about a week before it was shut down, adding that Valero did not respond quickly enough.
“I am not aware of any safe levels of breathing in pet (petroleum) coke. I would challenge the refinery plant manager in that trail of steam and pet coke to take a deep breath and say he feels good,” Soto said. “The history of this refinery’s treatment of the people of Benicia is to keep them uninformed for as long as possible and then to tell them they know best, because, after all, they’re a ‘gold star refiner,’ which is what they always try to hide behind. But they definitely waited too long to notify people of the real risks.”
The Bay Area Air Quality Management District has issued 12 violations to Valero in the past week for visible emissions and public nuisance. Eight were issued before Valero shut down the refinery, and four were issued after, according to agency public information officer Ralph Borrmann.
Sophia Kunthara is a San Francisco Chronicle staff writer. Email: email@example.com Twitter: @SophiaKunthara
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