Blackouts might wreak havoc on refineries -- and gas prices : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Crises could compound

Blackouts might wreak havoc on refineries -- and gas prices

Bernadette Tansey, Stacy Finz, Chronicle Staff Writers Tuesday, April 24, 2001 2001 San Francisco Chronicle


Angry about $2-a-gallon gas prices?

That price will look like the good old days if refineries are hit by the repeated power blackouts that are expected to roll across California this summer, the industry warned yesterday.

The interruptions that deprogram your VCR or knock the alarm clock for a loop cause much bigger problems at oil refineries that supply Northern California's gasoline, company officials said. Refineries forced into a sudden shutdown for even an hour could be out of commission for days, shrinking gas supplies and leading to higher prices.

"If we crash, we could go down for a week, two weeks or more, depending on whether equipment was damaged," said Scott Folwarkow, spokesman for the Valero refinery in Benicia, which has no backup generators to keep the plant running in a rolling blackout.

The Valero refinery produces 10 percent of the cleaner-burning gas required under California's air-quality laws. Most of that 110,000 barrels per day is sold in Northern California, Folwarkow said, so the effect on prices of the plant's closure would be felt strongly in the Bay Area.

"If we're not careful, we're going to turn the gas and electricity crisis into a total energy crisis, which would include transportation fuels: jet, gasoline and diesel," Folwarkow said.

The area's gasoline prices are already the highest in the nation, and the American Automobile Association said yesterday that they have gone up 13 cents in the past month. The average price per gallon of regular gas in the San Francisco area is now $2.03, AAA said.

The price bump that usually comes with the peak summer driving season arrived a little early this year, but most analysts say that doesn't necessarily signal bigger increases to come.

Unless something goes wrong -- like the major Tosco refinery accident near Martinez and the unexpected maintenance problems at other California refineries that preceded big price run-ups in 1999, or rolling blackouts.

Bay Area refineries were not affected by the blackouts that Northern California suffered in January and March. But the state Public Utilities Commission put refineries on notice April 6 that they could be subject to interruptions during a Stage 3 emergency, Folwarkow said.

BILL TO KEEP REFINERIES HUMMING Oil companies are pressing state legislators to pass a bill, AB57X, that would put refineries among the last in line for shut-offs in power emergencies.

"There's a concern that if you continue to subject these facilities to rolling blackouts, it could lead to low fuel supplies and high prices," said Lisa Gardiner, legislative aide to Assemblyman John Dutra, D-Fremont, who is sponsoring the bill. "We could have a fuel crisis on our hands."

Even refineries with backup power could lower production if threatened with sudden power blackouts, said Chevron spokesman Fred Gorell. Chevron's Richmond refinery has a cogeneration plant that supplies electricity but also imports power from the grid.

"If we knew we had no relief from these rolling blackouts, it's possible we would have to operate at a level to match our cogeneration output," Gorell said.

Rob Schlichting, a spokesman for the California Energy Commission, agreed that plant cutbacks caused by blackouts could drive up gas prices.

Only 60 to 70 percent of the state's refineries have backup generating plants, he said. And "the rolling blackouts can affect parts of the manufacturing chain outside the refinery itself, like pipelines that bring in crude oil or take products away."

AIRPORT INCIDENT A PREVIEW The Bay Area saw a dress rehearsal for that kind of disruption in January, when Pacific Gas and Electric Co. interrupted power for Kinder Morgan Energy Partners, a pipeline company serving local refineries. The curtailments, for four days in a row for as long as 18 hours a day, threatened to cause a fuel shortage at San Francisco International Airport, before Mayor Willie Brown and state Senate President Pro Tem John Burton intervened.

Motorists are already feeling the pinch of rising gas costs, even without any help from rolling blackouts.

Mike Burck, an advertising writer, recently bought a Toyota Camry. But he hasn't driven the car in two weeks because of the high price of gas.

"It's $20 to fill the car's tank," he said while pumping fuel into a shiny Harley-Davidson motorcycle in San Francisco's South of Market area. "I can ride the bike for days on only $5."


E-mail the writers at and

Price per gallon of regular gasoline(x) Current One month ago San Francisco 2.037 1.904 Chicago 1.860 1.446 Los Angeles 1.768 1.618 Fresno 1.754 1.683 New York 1.695 1.576 Denver 1.631 1.421 Dallas 1.618 1.371 Boston 1.594 1.484 Portland 1.568 1.565 Billings, Mont. 1.566 1.504 (x) as of yesterday: Source: AAA Daily Fuel Gauge Report;

-- Martin Thompson (, April 24, 2001

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