« Business Continuity

Chevron fire affects California gas prices

The temporary shutdown of a Chevron oil refinery in California, following a fire, could cause the state's gas prices to increase by 70 cents, up to $4.40 a gallon.
The temporary shutdown of a Chevron oil refinery in California, following a fire, could cause the state's gas prices to increase by 70 cents, up to $4.40 a gallon.

The prices of California gasoline could rise up to 35 cents more a gallon, while the aftermath of a Chevron refinery fire is fully assessed, according to the Associated Press.

On Monday afternoon, a small fire started at the Chevron location 10 miles northwest of San Francisco, but it quickly grew to a blaze filled with acrid black smoke that sent over 900 residents to emergency rooms with complaints of respiratory and other problems.

Officials said that a leak began around 4:15 p.m. and engineers began to strip away insulation on the faulty pipe to find the source of the damage. In effect, a vapor – similar in substance to diesel – was released and within two hours, residents were being warned to stay inside.

State law dictates that Chevron is required to "immediately" notify the public of any gas leak, fire or oil spill. According to Mark Ayers, the refinery's fire chief, at that initial point in time, there was nothing they could advise the community to do.

Chevron spokesman Lloyd Avram said he did not know when the refinery could reopen and had no comment on what the effect could possibly be on the price of gasoline in the state.

According to the Los Angeles Times, the refinery processes 243,000 barrels of oil a day into gasoline, diesel and jet fuel, which accounts for about 15 percent of the state's fuel-making capacity.

A long-term shutdown, though, could wind up being very expensive for California drivers, experts said. Patrick DeHaan, senior petroleum analyst for the price-watch websites run by GasBuddy.com recalled a BP refinery blaze in Februrary that closed the plant until May. Pacific Northwest gasoline prices increased by 70 cents, up to $4.40 a gallon.

With transportation costs sometimes at the mercy of sources beyond an individual's control, businesses and organizations should ensure that a business continuity plan is in place that dictates how and when employees could possibly work from home, as they might want to save money.