California drivers — or the millions of them whose cars still run on refined petroleum — can expect to pay more to fill up their gas tanks in the coming days thanks to the partial shutdown of Valero’s Benicia refinery.
The retail cost of a gallon of gasoline in the state is expected to rise immediately, according to David Hackett, president of Stillwater Associates, a transportation energy consulting company based in Irvine.
That’s after a 12-cent spike in wholesale gas prices on Monday, Hackett said.
“That price increase is likely to get passed through to motorists over the next week or so,” he said. “You’ll start seeing prices go up starting probably today.”
The average cost of a gallon of regular unleaded gasoline in California is $3.51, 16 cents higher than a week ago, according to AAA.
Several agencies are investigating a series of petroleum coke dust releases at the Benicia refinery that began more than two weeks ago. Those releases intensified on Sunday, prompting city officials to issue a health advisory.
The Valero refinery’s flue gas scrubber malfunctioned, a problem that led to a sooty plume of petroleum coke to billow out of the facility’s smokestacks. To deal with the problem, the refinery is slowly shutting down a significant part of its operations.
Last week, problems at two other California refineries contributed to the recent jump in gas prices.
AAA says a fire at a crude processing unit at the Phillips 66 refinery in Los Angeles County and a series of flaring incidents at Chevron’s Richmond refinery drove prices higher.
AAA spokesman Michael Blasky said price spikes are the norm when refineries suffer problems that lead to curtailed production.
“When a refinery goes offline and supply drops, retailers incorporate price increases almost immediately in California,” Blasky said.
Wholesale suppliers that sell fuel to gas stations and hear about the Benicia refinery’s shutdown will probably go into the so-called spot market to buy gas, sending the price up, Hackett said.
The refinery problems come amid a jump in the price of crude oil over the last year, which has sent gas prices up nationally.
State workplace regulators, the region’s local air quality district and Solano County health officials are trying to find out why a problem at Valero’s Benicia refinery suddenly worsened over the weekend, leading to a release of petroleum coke dust that prompted fire officials to urge those with respiratory problems to stay indoors.
The incident led to a partial shutdown at the facility and represents the worst malfunction at the plant since a power outage caused a major pollution incident in 2017.
The releases of elevated levels of particulate matter led several residents to complain of breathing problems and prompted Benicia’s mayor to call on Valero to pay the city back for its work dealing with the emergency. The partial refinery shutdown is also expected to lead to a spike in higher gasoline prices throughout the state.
Mayor Elizabeth Patterson said she’s gotten a flood of phone calls and emails from residents wanting to know why it took so long for Valero to suspend refinery operations.
“There’s a lack of understanding about how coke particulates could be continuously emitted throughout a couple of weeks,” Patterson said. “There’s not a lot of information that’s readily available to the public.”
California’s Division of Occupational Safety and Health began a probe into Valero on Monday, the day after the company began the gradual shutdown of a significant portion of the refinery, according to agency spokesman Frank Polizzi.
Cal/OSHA becomes the latest government agency to look into the breakdown of a key piece of equipment inside the refinery that went down two weeks ago. The Bay Area Air Quality Management District and Solano County officials have launched probes as well.
Refinery Problems Started Two Weeks Ago
On March 11, the facility’s flue gas scrubber began malfunctioning. That meant the facility’s smokestacks began belching a sooty plume of petroleum coke dust — minute carbon particles that are a byproduct of the oil refining process.
The initial problem prompted the Bay Area Air Quality Management District to issue eight notices of violation against Valero.
The air district and Solano County health officials said during the following days that the flue gas scrubber had been fixed and the coke dust releases were intermittent and gradually coming to an end.
But the black smoke returned on Saturday. On Sunday, fire officials detected high levels of fine particulate matter, known as PM10, around the refinery and issued a health advisory urging people with respiratory issues to stay indoors.
“What we were seeing was dark gray, almost black smoke coming from the flue gas scrubber unit,” Benicia Fire Chief Josh Chadwick said Monday.
PM10 is particulate matter 10 micrometers or less in diameter — larger than PM2.5 many became familiar with during last November’s Camp Fire, when smoke from the huge Butte County blaze prompted health advisories throughout much of Northern California.
Like PM2.5, the larger particulate matter is regulated by the Environmental Protection Agency.
EPA spokeswoman Soledad Calvino said the agency would not comment on ongoing or potential investigations.
The agency has said that once inhaled, petroleum coke dust can affect the heart and lungs and cause serious health effects.
“The additional concern is that this is more toxic than the standard stuff you’d find in the atmosphere,” said Anthony Wexler, director of the Air Quality Research Center at UC Davis. “It’s probably similar in toxicity to diesel exhaust, which is a known carcinogen because it’s sooty in nature.”
On Sunday morning the wind in the Benicia area was blowing east to west at about 6 to 12 mph, according to meteorologist Jan Null.
That meant the coke dust was being blown toward residential neighborhoods, said Chadwick.
“That was one of the big concerns I had,” Chadwick said. “We had a wind shift … that really turned it back toward the city.”
Several Residents Complain of Breathing Problems
Chadwick said the Benicia Fire Department received two 911 calls for respiratory complaints. One of the calls was for one person who was transported to John Muir Medical Center in Concord. The other was for two people who told paramedics who showed up they didn’t need to be hospitalized.
The wind on Sunday also sent the coke dust toward parts of Contra Costa County, according to air district spokesman Ralph Borrmann. The agency received several complaints from people in Benicia and a few in Rodeo, Borrmann said.
Fire crews have been conducting air readings since Sunday morning and the levels of particulate are back to normal, Chadwick said.
Air district officials are expected to release the results of their testing later this week.
It’s unclear why the flue gas scrubber began malfunctioning again.
Terry Schmidtbauer, Solano County’s assistant director of resource management, said his department’s investigation is focused on the scrubber unit, other refinery components that interact with the device and if refinery workers made a mistake in operating the unit.
It’s also uncertain how long it will take to shut down the affected parts of the refinery and how long that closure will last.
“I am not sure how long Valero intends to have the affected portion shut down,” Schmidtbauer said in an email.
Lillian Riojas, a Valero spokeswoman, did not answer questions about how long the shutdown should last.
On Sunday the company issued a statement about the refinery problem.
“There may be a visible plume and flaring as part of the shutdown,” Valero’s statement said.
Mayor Renews Call for More Refinery Regulations
Mayor Patterson has been calling for more regulation of Valero’s facility ever since the May 5, 2017, refinery incident — a push that so far has failed to result in action.
The City Council rejected her proposal to develop an industrial safety ordinance, similar to one in Contra Costa County, that provides more information to town officials about refinery problems.
The latest incident has prompted her to renew her call for action.
“We definitely need an industrial safety ordinance with the fees to cover the costs that it’s costing the city,” Patterson said. “When we are responding to these things, that means we’re not doing something else.”
Patterson said she planned to bring up the issue of compensation at a City Council session this Saturday.
A Bay Area environmental group critical of the oil industry and the agencies regulating it said the episode should raise concern about operations at other facilities.
“This is the latest sign that Bay Area refineries and our air quality officials can’t safely cope with current workloads, let alone the increased volume of oil processing planned by the industry,” said Hollin Kretzmann, an Oakland-based lawyer for the Center for Biological Diversity.
“(The) City of Benicia has issued (an) advisory notice for all residents with respiratory issues due to particulate matter from an ongoing incident at the Valero Benicia Refinery,” the city’s statement reads.
City officials are telling local residents with weakened respiratory systems to close all doors, windows and fireplace dampers, urging them to put tape or damp towels around doors and windows to seal them.
The advisory also recommends that healthy people limit their outdoor activity.
“The concentration of particulate matter has become significantly higher over the past day. The emissions contain coke, a by-product of the refining process that is made up primarily of carbon particles,” the city’s statement says.
Benicia officials said testing of the coke dust released so far did not show heavy metals at harmful levels but warned that breathing in air from the releases could worsen underlying respiratory conditions like asthma.
In a statement, the Bay Area Air Quality Management District said inspectors are at the refinery investigating the cause of this heavy smoke. The Air District also deployed a monitoring van to drive throughout Benicia to “gather ground level emissions data.”
California attorney general subpoenas refiners on gas prices
Associated Press, Updated 2:57 pm, Friday, July 1, 2016
The California attorney general has issued subpoenas to several oil refiners to learn how they set gasoline prices, which are consistently higher in California than in most other states.
Chevron Corp., Exxon Mobil Corp., Valero Energy Corp. and Tesoro Corp. confirmed on Thursday that they have received subpoenas in recent weeks.
The attorney general is making a sweeping request for information about gasoline supplies, pricing, and maintenance shutdowns that can temporarily create shortages and increase prices, according to people familiar with the investigation. The people spoke on condition of anonymity because they were not authorized to discuss details of the subpoenas.
The requests came from Attorney General Kamala Harris, a Democrat who is running for the U.S. Senate. Kristin Ford, a spokeswoman for Harris, declined to comment on whether her office was investigating.
Chevron spokesman Braden Reddall said the company received a subpoena from the attorney general’s office and would cooperate with the investigation.
Valero received a subpoena “and we will respond accordingly,” said spokeswoman Lillian Riojas.
Spokesmen for Exxon and Tesoro also confirmed the requests for information. None of the companies would discuss the matter further.
California perennially has among the nation’s highest prices for gasoline. This week, the average for a gallon of regular was $2.90 in the state compared with the national average of $2.29, according to the AAA auto club.
Some consumer advocates have charged that refiners drive prices higher by tactics such as frequent or overly long plant shutdowns.
Refineries are routinely taken offline for maintenance, and there have been longer-lasting outages after disasters such as the explosion in February 2015 at an Exxon refinery in Torrance, near Los Angeles.
Gordon Schremp, senior fuels specialist with the California Energy Commission, said 2015 saw an “extraordinary price spike in magnitude and duration in California,” which a commission advisory committee has been investigating.
“We are aware that they were doing this,” Schremp said of the attorney general’s investigation, “because off and on they’ve talked to us about what was going on with the 2015 market, important factors that can cause spikes in the markets.”
Industry officials blame high prices on California’s stricter clean-air requirements, which they say add costs and make it more difficult to import gasoline from other states when there is a price spike.
Rebecca Adler, a spokeswoman for the American Fuel & Petrochemical Manufacturers, called the allegations in the subpoenas baseless.
“We are confident that nothing will come of this,” she said.
The group Consumer Watchdog has repeatedly called on Harris to investigate oil companies over California gas prices and welcomed news of the investigation.
“It’s great that we have a law enforcement official asking questions about both supplying the market and equitable pricing within the market,” said the group’s president, Jamie Court.