CA refinery Fire determines gas supply of gas, high prices

Fortunately, last week explosion and fire in the second largest refinery in CaliforniaThe El Segundo plant of Shevron was not an environmental disaster. But this can have a serious economic and political impact.

It happened when governor Gavin Newm and other democratic figures were in the midst of 180-degree political pirouette: The transition from denunciation of gasoline manufacturers as prices that extract pollutants to ask them to continue production.

California once had dozens of refineries but today Nine still produce gasoline, diesel and jet fuel for airlines and military aircraft. Two have announced plans to close within a few months.

The Valerro and Phillips 66 plant in southern California together represent about 17% of the state refining capacity, according to the California Energy Committee. State lawsters According to communications, they have proposed state subsidies to Valerro In order to keep his Benisia Refinery in operationClosure to the closure would increase the high prices of the Californians gas.

The El Segundo’s damaged plant of Chevron, if closed, will double the loss of refinery capacity to more than one third of the total country, which will lead to a supply crisis, which will surely lead to higher pump prices.

California 30 million plus cars and light trucks average 340 billion miles of trips each year and Burned 13 billion gallons of gasEveryone but which they come from the nine refineries. There are no pipelines to attract fuel from other states, and the import of gasoline from Asia or the Middle East through the tankers is filled with uncertain and high costs.

NEWSOM supported by fellow Democrats in the legislature spent months Exhausting refineries for high prices, although very high taxes on state fuels Create much of the difference between prices in California and those in other states. Newsom convenes a special session of the legislature in order to accept legislation, which said it would sanction the profit, which is considered too high.

Official criticism seems to be glued to the state’s intention to remove gasoline cars in favor of electricity supplied, thus excluding oil production and gasoline refineries. The Newsom administration said by 2035 the sale of new gas cars would be banned.

Evolution Newsom also envisages the state to continue refining while the last of gasoline -powered vehicles is constantly parked, raising questions about how the change will be managed.

Phillips 66 and Valero messages forced the problem. The state’s politicians have realized that the rapid decline in refinery capacity can send gas prices, thus creating a political response. Newsom’s obvious presidential ambitions will be struck by a sharp price jump.

Respectively in the last days of the legislative session, NEWSOM and legislators withdrawnpassing measures to increase oil production. Recently, Newsom has signed legislation for Make gas with 15% ethanol availableSaying that this will reduce prices by up to 20 cents per gallon. Obviously, legislators are also experiencing Valerro for some state subsidies for their plant in Benicia, but so far they have not been successful.

Shevron, whose refineries in El Segundo and Richmond have about one-third of the state refining capacity, moved its plant from California to Texas last year and had no secret to its neglect of anti-petrol policy in California, while missing hints that it could close one of its two.

The degree of fire damage in El Segundo’s refinery of Shevron and the effect on supply and prices of gasoline are still unclear. However, this is a reminder of how tight the supply of gas in California has become and how cataclysmic can close its refineries – economic and political.