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Tosco refinery blaze not expected to affect gas prices

The Associated Press
Wednesday April 25, 2001

LOS ANGELES — A fire that damaged a Tosco refinery in Southern California is not expected to affect gasoline supplies or prices, analysts said Tuesday. 

The inferno, which may be under investigation for months, broke out in a cooker unit at the facility in Carson and burned for hours Monday. The unit burns coke, a type of coal, in the process of refining crude oil. No one was injured. 

The cooker unit remained shut down Tuesday, and other parts of the refinery operated at reduced levels, Tosco officials said in a statement. They had no estimates on the extent of the damage or the amount of time it will take to fix the cooker unit. 

But Tosco’s nearby Wilmington refinery, where processed crude from Carson is sent to be refined into the gasoline and other products, continued to operate at normal levels, the company said. 

Analysts said that if the fire had limited gasoline production, it would have delivered a significant blow to Californians on top of recent spikes in gas prices that have hit the entire country. Jay Wilson of J.P. Morgan Chase said the Tosco complex produces about 6.5 percent of the state’s gasoline. 

“We’re lucky in the sense that the incident, while unfortunate, is not going to have much of an impact on gasoline prices,” said analyst Paul Y. Cheng of Lehman Brothers. 

But Wilson said Tosco’s “margins are going to suffer a little bit,” because the loss of the cooker prevents the company from using lower grades of crude oil. 

Two investigators with the California Division of Occupational Safety and Health were at the scene Tuesday, conducting interviews and waiting for a crew to clean up asbestos left from the fire, Cal-OSHA spokesman Dean Fryer said. He said it’s not uncommon for such investigations to take three or four months to complete. 

On March 30, Tosco agreed in a settlement with state regulators that it had committed five serious or “willful” violations linked to a 1999 flash fire that killed four workers at its Avon refinery near Martinez. 

Tosco agreed to pay Cal-OSHA $462,630 in fines – a record amount for refinery safety violations. The deal requires the approval of the Cal-OSHA appeals board. 

“Honestly, no fine can compensate for the lives that were lost in the tragic fire two years ago,” Tosco spokesman Jeff Callender said. “But we’ve since been able to identify lessons learned to ensure the longtime safety of our plant.”