Chevron response to refinery fire under criticism

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RICHMOND, Calif. – Investigators were looking at how a small, seemingly insignificant leak at one of the country's biggest oil refineries quickly unraveled into an intense fire that sent acrid black smoke into the sky and hundreds of people to hospitals with health complaints.

This latest disruption at Chevron's refinery in this city about 10 miles northwest of San Francisco – one of the West Coast's big refineries – was expected to affect gasoline prices in the region.

The Richmond refinery produces about 150,000 barrels of gasoline a day – or 16 percent of the region's daily gasoline consumption of 963,000 barrels, said Tom Kloza, chief oil analyst at Oil Price Information Service.

With inventories of gasoline in the region already low compared with the rest of the country, pump prices on the West Coast will soon average more than $4 a gallon, Kloza said.

Chevron spokesman Lloyd Avram said he did not know when the refinery could be restarted and declined to comment on the impact the shutdown might have on the gasoline market.

Analyst Patrick DeHaan of the website GasBuddy.com warned that Oregon and Washington would see a price hike soon.

"Spot prices have already increased by as much as 30 cents per gallon in some West Coast markets and that's before the refinery damage has been fully assessed," DeHaan said.

The leak started as a drip at about 4:15 p.m. Monday, officials said. Chevron — which is required to "immediately" notify the public of any gas leak, fire or oil spill, according to state law — did not consider it an immediate danger to residents nearby.

"At that point in time, there really wasn't anything we could advise the community to do," said Mark Ayers, the refinery's fire chief. "We surely wouldn't advise anybody to shelter in place" (seek refuge in a small interior room).

The company's engineers began stripping away insulation on the leaky pipe to investigate the source, which released a vapor of a flammable substance similar to diesel. About two and a half hours later, a conflagration had officials scrambling to warn residents to stay inside.