UPDATE: Yep, gas prices have absolutely skyrocketed — a whopping 77 cents since this time last month.
The explosion this morning at an ExxonMobil refinery in Torrance came at a bad time for fuel prices.
After a benevolent winter of relatively low rates, wholesale gas prices have nearly doubled since mid-January, says Tom Kloza, chief oil analyst at the Oil Price Information Service.
If ExxonMobil shutters the Torrance facility, its only California refinery, it could add .15 cents a gallon to the current price spike, he said.
The increase will be joined by price bumps caused by a switch to more expensive summer-blend gas and a rise in wholesale gas that's seen prices go from $1.09 a gallon to $2.01 since Jan. 13, Kloza said. "This suggests a retail price closer to $3," he said.
Liza Tucker, an energy specialist with the Santa Monica-based nonprofit group Consumer Watchdog, agrees that an ExxonMobil refinery shutdown will cost us at the pump.
"I think there's no doubt you'll see gas go up at least another .10 cents a gallon," she said.
Tucker said the possible suspension of refining is compounded by the temporary closure of another refinery, the Tesoro plant in Martinez, California, Feb. 6 as a result of a labor dispute. Both refineries produce 16 percent of California's pump gas, she said.
Consumer Watchdog believes that ExxonMobil was taking the Torrance plant offline for two weeks starting Monday. An ExxonMobil spokesman didn't answer our questions about the refinery's production status.
Consumer Watchdog wants a state investigation to ensure that the Tesoro shutdown in particular, and the rumored ExxonMobil two-week suspension of refining, were not the results of attempts at market manipulation.
Torrance Refinery explosion. Two veh next to tank that looks to have exploded. pic.twitter.com/QRqExENH1Y— Kevin Takumi (@KevinTakumi) February 18, 2015
California depends on 14 refineries for its gas. It has to be made here because the state requires special smog-reducing blends. Normally, Tucker said, 14 refineries is one too many, but this accident could put us behind demand.
"We're an island in California," she said. "We make all our own gas here. We don't import much."
Kloza agreed: "You're vulnerable," he said.
But he was more optimistic, predicting a continued global oil glut. "If you endure, it's not as scary a chapter as others you've endured," he said.
The refinery explosion was reported at 8:50 a.m. It was "followed by a ground fire that was quickly extinguished," Torrance police said in a statement.
Four workers were taken to Long Beach Memorial Medical Center with minor injuries, ExxonMobil said in a statement.
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The South Coast Air Quality Management District issued an alert for the L.A. area that says possibly harmful smoke and ash was produced by the explosion. "Vigorous outdoor or indoor exertion" should be avoided, air quality officials said.
Police suggested that residents near the refinery "shelter in place" as smoke and ash fills their neighborhoods.
"We will conduct a thorough investigation of the cause of this event," ExxonMobil stated.