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Refinery Fire Could Boost Gas Prices in WA

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credit: Joe Raedle/Getty Images

credit: Joe Raedle/Getty Images

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SEATTLE (AP) — The longer the BP Cherry Point refinery at Blaine is out of service because of fire damage, the higher gasoline prices will go for drivers in Washington, said Tim Hamilton, executive director of the Automotive United Trades Organization, an association of independent dealers.

Wholesale prices to dealers went up about 20 cents a gallon Tuesday, Hamilton said. That will push prices in Washington close to $4 a gallon, Hamilton said Wednesday.

“This tells us the oil companies are not all that confident they’ll be able to get Cherry Point up that fast,” Hamilton said. “We don’t know for certain.”

The average price for a gallon of gas Wednesday in the state was $3.68 a gallon, according to the AAA auto club. That’s already up 14 cents in a week and 21 cents in a month.

“Shutdowns can push prices up,” said AAA spokeswoman Jennifer Cook in Bellevue. “That was already going on. This fire is going to add to it.”

Four other refineries in Washington could increase production to offset the BP outage, but Hamilton says crude oil stocks would likely run out in eight or nine days. If the outage from Friday’s refinery fire lasts a month, Hamilton predicts prices would continue rising higher — to the point motorists are forced to cut their driving and demand meets supply.

“They will raise it to whatever it takes to force people to stop driving and slow consumption down,” Hamilton said.

There’s no estimate when operations will resume at Cherry Point and the investigation into the cause of Friday’s fire continues, said BP spokesman Scott Dean in Chicago.

He cautions against directly relating gas prices to the operations of a single refinery.

“You really can’t pin a gas price on any single factor,” he said Wednesday. “You have to look at all the factors in totality. There are a lot of thing going on globally affecting crude oil prices and that translates into prices at the pump.”

It’s a good sign the BP refinery has remained on standby, said Hamilton an oil industry analyst and consultant for 30 years.

“They’ve kept it hot,” he said.

A shutdown would require a longer startup period and once the refinery is shut down BP might also use that time for the switch from winter to summer-formulated fuels or additional maintenance.

“If we’re down for any amount of time we’re going to quickly run out of reserves in storage,” he said. And it would take more than a month to direct a special oil tanker to Puget Sound, Hamilton said.

The BP refinery is the largest of five in Washington with the capacity to turn 230,000 barrels of crude oil a day into gasoline, diesel and jet fuel. It’s the third-largest refinery on the West Coast. It produces 20 percent of Washington’s gasoline needs and it supplies the majority of jet fuel for Sea-Tac, Portland and Vancouver, British Columbia, airports.

The other refineries in the state are the U.S. Oil facility at Tacoma, ConocoPhillips at Ferndale, and Tesoro and Shell at Anacortes.

– Copyright 2012 The Associated Press

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