|Chevron Blasts Spurs
New Gas Hike Fears
July 15, 1999
OF THE EXAMINER STAFF
Zachary Coile of The Examiner staff contributed to this report.
July 15, 1999
Undisclosed weekend explosion cuts
Richmond production by 70%
Chevron officials said Wednesday that
Saturday's accident has reduced gas production at the West Coast's
largest refinery by 70 percent.
If the price-hike pattern following two
recent East Bay refinery accidents holds true, the decreased supply will
drive gas prices up.
The incident, which was not made public
until late Wednesday, also has raised the hackles of environmentalists
who say they want to know why the public wasn't notified when the
A leak developed in the main gasoline
producing unit Friday. The explosion occurred Saturday, leaving the unit
- known as a fluid catalytic cracker - inoperable, said Chevron
spokesman Mike Libbey. There were no injuries and the plant was not
evacuated, he said.
"This is a significant reduction" in production, Libbey said. "We are still analyzing the problem and we don't know when things will get back on track."
On Tuesday, hoping to avert the
predicted state gasoline shortage and higher prices, the oil company
asked California regulators for permission to sell out-of-state gasoline
that doesn't comply with California's stricter environmental laws. No
hearing date on the request has been set.
As the supply of gasoline shrinks, oil
companies and traders who buy up stocks of gas are likely to jack up
their prices. Gas station owners who have to pay more for each gallon,
in turn, pass the price hikes on to drivers, said Paul Moreno, spokesman
for the California State Automobile Association.
"This refinery problem comes when
we're in the thick of the summer driving season and oil prices have
already been going higher, so it's not good news for consumers,"
Moreno said it was unclear how much gas
prices will rise. But Gordon Schremp, an analyst with the state Energy
Commission, told the Sacramento Bee Wednesday that if the state doesn't
allow Chevron to sell out-of-state gas "you could easily see price
increases of 20 to 30 cents a gallon."
Saturday's accident comes on the heels
of two major East Bay refinery accidents that have seriously depleted
gas reserves in the state and were blamed in large part for the recent
surge in gas prices throughout California.
Bay Area gas prices skyrocketed as much
as 50 percent in March, following a fatal explosion at Tosco's Martinez
refinery and an explosion at Chevron's Richmond plant. By April 12, San
Francisco had the nation's most expensive gallon of gas - $1.71 - and
prices kept going up.
Calls for gasoline boycotts
Since then prices have begun to creep
back down. The California State Automobile Association's most recent
survey, taken June 22, found the average price for self-serve unleaded
to be $1.51 per gallon in the Bay Area, with the average price in San
Francisco higher, at $1.60 per gallon. The state average was $1.38 per
Chevron is asking regulators at the
state Air Resources Board for permission to buy 3.5 million barrels of
gasoline from outside the state for the maximum allowed 45 days.
If production at the refinery is not
back on track by then, Chevron will arrange for the purchase of cleaner
burning gasoline from other sources, Libbey said.
$22 million for consumers to pay
"These penalties always hit the
consumer's pocket book, especially when you're talking about the West
Coast's major refinery," said Donald Brown, a refinery safety
consultant and former refinery operator. "It's going to have an
effect on prices statewide."
If the Air Resources Board agrees to
Chevron's request, it would mark the first time that the state allowed
non-CARB gas since a cleaner-burning alternative, CARB gas, was
introduced in 1996. CARB gas lowers hydrocarbon emissions by about 17
percent, while non-CARB gas trims emissions by only about 8 percent.
Staff members for the air board are
recommending that the agency grant a temporary waiver to allow Chevron
to sell non-CARB gas because of the state's current shortage. The board
may decide as soon as this week.
Saturday's accident was the third at
Chevron's Richmond refinery since March. Both sent gas production down
and raised health and safety concerns among nearby residents.
On March 23, a fire shot an 18,000-pound
plume of sulfur dioxide into the air and sent more than 350 area
residents to hospitals with ailments including eye and throat
irritation, breathing trouble, dizziness and nausea.
Damage to the refinery cut gas
production by 15 percent, which the plant had not recovered from when
Saturday's accident occurred.
On June 2, a chemical release that gave
some nearby residents headaches and made them nauseous led to a
temporary shutdown of the plant. The county issued a Level 2 warning,
meaning people with asthma or other respiratory problems should stay
That incident angered many residents
because the company delayed notifying authorities for several hours.
Ultimately, the county Department of Health Services determined no
hazardous materials were released.
Environmentalists, who didn't learn of
Saturday's incident until contacted by the media Wednesday evening,
expressed surprise and anger that the company had not released any
information to the public.
"That's outrageous. That's really
dangerous. Boy, they sure kept this quiet," said Denny Larson,
Northern California director for Communities for a Better Environment.
"This is another example of Chevron being more concerned about spin
control than about threats to the neighborhood."
Chevron described the impact on the
surrounding community as imperceptible.
"It was a very, very minor
explosion," Libbey said. "It happened quite some distance from
the gates (to the refinery). If there was some kind of air emission, you
could see it or smell it, and we didn't see or smell anything outside
Report required by law
District spokesman Terry Lee said there
were no toxic emissions from the explosion outside the plant and there
had been no complaints from residents. Lee could not confirm late
Wednesday whether an independent environmental appraisal had been
conducted after the incident.
Environmentalists countered that more
sophisticated tests must be conducted to determine whether the incident
had an environmental impact.
"It is possible to release
something you can't see or smell," Larson said.
The incident also surprised Richmond
City Councilman Tom Butt, who said the council had not been informed.
Butt has been pushing for a city safety regulation similar to Contra Costa County's Industrial Safety Ordinance that regulates the county's three other refineries, all of which are in unincorporated areas.
The county passed the ordinance in the
aftermath of the Tosco explosion.
Chevron - which is in Richmond, not an
unincorporated area - is the only refinery in the county not covered by
the ordinance, which gives local authorities investigative authority to
step in after refinery accidents.
"If this accident really happened - and I haven't heard one word about it from anyone else - then it builds a bigger case for the city to not trust Chevron," Butt said.