Flood­ing chokes off 25% of oil re­fin­ing

Ma­jor rigs forced to shut down, push­ing gas prices higher

USA TODAY US Edition - - FRONT PAGE - Nathan Bomey

Flood­wa­ters closed oil re­finer­ies Wed­nes­day along the Texas Gulf Coast, in­clud­ing the na­tion’s largest, as Hur­ri­cane Har­vey showed its power to rav­age the en­ergy in­fra­struc­ture and drive up gaso­line prices.

Fif­teen re­finer­ies were go­ing off line from Cor­pus Cristi to Port Arthur, Texas, the En­ergy Depart­ment re­ported. The list in­cluded the largest re­fin­ery in the USA, the Saudi-owned Mo­tiva plant in Port Arthur, which be­gan what it called “a con­trolled shut­down.”

Taken to­gether, the clo­sures rep­re­sent about 25% of U.S. re­fin­ing ca­pac­ity, GasBuddy.com petroleum an­a­lyst Pa­trick DeHaan said. “It’s a chill­ing ef­fect on the re­fin­ing in­dus­try, which is in a dire state right now,” DeHaan said.

Just be­fore the La­bor Day hol­i­day week­end, one of the top travel week­ends of the year, DeHaan es­ti­mated Wed­nes­day that gas prices would in­crease 15 to 25 cents per gal­lon na­tion­wide as a re­sult of Har­vey. Ear-

lier, he had pre­dicted a boost of 5 to 15 cents.

The na­tion­wide av­er­age as of Wed­nes­day morn­ing was $2.40 a gal­lon, up from $2.34 a week ago, ac­cord­ing to AAA.

Re­fin­ery out­ages in­clude fa­cil­i­ties run by Exxon Mo­bil, Citgo, Petro­bras, Flint Hills, Mag­el­lan, Buck­eye, Shell, Phillips 66 and Valero En­ergy, ac­cord­ing to the U.S. Cham­ber of Com­merce’s Global En­ergy In­sti­tute.

Con­se­quently, Amer­i­cans are us­ing about 9.7 mil­lion bar­rels per day of gaso­line, while re­finer­ies are pump­ing out fewer than 8 mil­lion, DeHaan said.

“Gaso­line in­ven­to­ries are go­ing to be chis­eled away quickly if that con­tin­ues,” DeHaan said.

Sen. Ed Markey, D-Mass., urged Pres­i­dent Trump to re­lease sup­plies from the na­tion’s Strate­gic Petroleum Re­serve to ease the im­pact on con­sumers.

But the na­tion had nearly 230 mil­lion bar­rels of gaso­line in­ven­tory on hand as of Fri­day, ac­cord­ing to the U.S. En­ergy In­for­ma­tion Ad­min­is­tra­tion, so “we’re not run­ning out of gas any­time soon by any means,” AAA’s Jeanette Cas­se­lano said.

Still, the re­fin­ery out­ages and the clo­sure of sev­eral ports have dis­rupted the sup­ply of fresh fuel to sta­tions in the Texas Gulf Coast and other re­gions.

The Mo­tiva op­er­a­tion alone gen­er­ates about 635,000 bar­rels per day in nor­mal times, ac­cord­ing to the Oil Price In­for­ma­tion Ser­vice.

“Re­turn to ser­vice is con­tin­gent upon re­ces­sion of flood­wa­ters in the area,” Mo­tiva spokesper­son An­gela Good­win said in a state­ment. “Our pri­or­ity re­mains the safety of our em­ploy­ees and the com­mu­nity.”

The plant was run­ning at 60% ca­pac­ity as of Tuesday af­ter­noon and 40% on Tuesday evening.

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