September 2

Indiana refinery fire not expected to hit gas prices much


A major Midwestern oil refinery shut down by a fire should reopen in the next few days, its operators said Monday, and industry experts said the brief shutdown is unlikely to have a major effect on gas prices in the region.

An electrical fire at a BP refinery in northwest Indiana on Wednesday caused the company to temporarily close its facility located about 15 miles (24 kilometers) southeast of Chicago. No one was hurt.

BP expects to reopen the facility “in the coming days,” spokeswoman Christina Audisho said. The company “has deployed all available resources and is working around the clock to bring the Whiting refinery back to normal operations as soon as safely possible,” she said.

Gas prices may still continue to slide for the next few days, according to energy analyst Tom Kloza of the Oil Price Information Service.

“Retail prices are not likely to surge but they could recede at a slower rate than what one might expect without a major refinery limping along,” Kloza said.

BP’s Whiting Refinery produces about 435,000 barrels per day and provides about 20% to 25% of the refined gasoline, jet fuel, and diesel used by Illinois, Indiana, Michigan, and Wisconsin, according to Michigan Gov. Gretchen Whitmer’s office.

Patrick De Haan, head petroleum analyst at GasBuddy, which tracks gas prices nationally, called the Whiting facility closure a “temporary setback.”

“I think it’s going to delay the decline in prices that had been ongoing, but it’s only a matter of time before that decline resumes,” he said.

For now, the fire’s impact on retail prices has been limited and will remain so as long as the refinery reopens by the end of the week, De Haan said.

“The problems — both pricing and supply — will probably really ramp up if that facility can’t get back online or isn’t restarting by say, Thursday or Friday,” he said.

To help prevent supply disruption, the Environmental Protection Agency temporarily lifted a federal rule for summer fuel sales on Saturday for four states in response to the fire.

The waiver lifts a Clear Air Act requirement that lower-volatility gasoline be sold in Indiana, Illinois, Michigan and Wisconsin during summer months to limit ozone pollution. It is in effect until Sept. 15, the EPA said.

Claire Savage is a corps members for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.



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