While the rest of the country enjoys a comfortable $2.43 per gallon price for gas, Orange County residents are still paying a stubbornly high $3.45, according to the price-tracking website Gasbuddy.com.
But relief could be coming to the pump — if we’re all willing to accept a trade-off in the form of dirtier air.
On September 17, the South Coast Air Quality Management District will hold a hearing to decide whether a local oil refinery can resume gas production after six months of sitting idle.
Southern California gas prices have remained far higher than the national average ever since a Feb. 18 explosion at the Exxon Mobil refinery in Torrance, which has yet to be fixed.
The refinery ordinarily provides 20 percent of the area’s gasoline, but the fire destroyed the plant’s pollution controls and took it offline. That, in turn, reduced Southern California gas supplies to a five-year-low, according to the California Energy Commission.
“This is one of the worst situations we’ve had for refinery operations, and I’ve been working in this area for almost 25 years,” said Gordon Schremp, a senior fuels specialist with the California Energy Commission in Sacramento.
“It’s highly unusual that a refinery experiences some significant unplanned outage and is unable to bring those units back into operation within a month or 45 days.”
While Exxon Mobil declines to provide a time frame for when it could resume operations as normal, the AQMD estimates it could be next year before it’s able to operate at full capacity.
“Usually these price spikes are not really long-lived because a refinery gets back in operation and others make more gasoline to compensate for that,” Schremp said.
The Exxon Mobil refinery outage is responsible not only for very high prices at the pump in Southern California, but for record differences between Southern California and the rest of the U.S., including Northern California, where gas prices in the Bay Area this week were on average almost 15 cents cheaper per gallon.
But bringing the Torrance refinery back online is no easy task. Exxon Mobil’s system is so large and complicated it is housed in a building that is five stories tall and 200 feet long. Refineries have in excess of 300 emissions systems and units, each of which is subject to as many as a dozen rules and regulations, according to the AQMD.
Pollution controls also are costly. When Exxon Mobil upgraded its refinery to tackle more stringent particulate emissions requirements in 2009, the paperwork submitted to the AQMD at the time indicated the better equipment would cost approximately $300 million to install. That’s the system that was damaged in the fire.
“We have been working closely with the South Coast Air Quality Management District on a potential plan to restart. … But we are not in a position to speculate on a timeline,” said Exxon Mobil spokeswoman Gesuina Paras.
At the request of Exxon Mobil, AQMD has proposed a solution that would allow the refinery to use dated pollution control equipment to get back up and running as early as late September, but only at 65 percent capacity.
But the dated equipment emits up to six times more fine particulate than the more modern pollution controls that exploded in February.
“There are concerns about having the staff at the refinery. They don’t want to lay people off. There are also concerns about whether or not there is adequate supply of gasoline,” said Mohsen Nazemi, deputy executive officer for engineering and compliance with the South Coast AQMD in Diamond Bar.
“The reason we have now decided to go forward with this petition is Exxon Mobil approached us after this incident and asked if they could, in the interim, while they are repairing the new (equipment), operate another air pollution control system that they used before they built the new unit.”
Exxon left the old unit in place and simply turned it off when it built the new one in 2009.
Under the AQMD proposal, Exxon Mobil would be allowed to restart production, but only by limiting the emissions of a pollutant known as PM2.5 to the same levels emitted when the plant was operating at full bore with modern pollution controls.
“Our primary concern is to protect the public health and the community living around this refinery,” Nazemi said.
The Los Angeles-Long Beach region ranked fifth in the nation for both year-round and short-term particle pollution, according to the 2015 State of the Air report from the American Lung Association.
According to a 2011 study from the California Air Resources Board, exposure to PM2.5 increases the risk of premature death from heart disease in older adults and elevates the likelihood of strokes in post-menopausal women. The U.S. Environmental Protection Agency has also linked PM2.5 with premature death.
When inhaled, PM2.5 stays inside the lungs instead of being exhaled.
The older pollution control equipment Exxon Mobil hopes to use temporarily would require a refurbishment and tweaks to five units within the refinery to offset the increased particulate emissions. The AQMD also will require Exxon Mobil to hire an independent testing company to conduct emissions tests and verify PM2.5 emissions are within the legal limit.
At the earliest, Exxon Mobil’s Torrance refinery would be making gas again later this month. Still, significant price reductions for Orange County gasoline consumers aren’t likely until November, due to numerous planned outages at local refineries. Oil refineries often undergo planned outages that are known far in advance and for which refineries make extra gasoline to compensate. The number of planned outages this year is four times higher than it was last year, according to Schremp.
Right now, about 85,000 barrels of gasoline production capacity are undergoing maintenance or otherwise offline in California, due in large part to Exxon Mobil’s Torrance refinery explosion. Come October, it will be closer to 280,000 barrels.
“We’re not out of the woods yet,” Schremp said. “Gasoline prices are going to be very expensive, and they won’t get significantly better until the refinery issues start to get resolved.”
Southern California is home to eight of the state’s 19 oil refineries, most of which supply gasoline to their local markets. When one refinery goes out, its impact is felt more strongly.
Geographically isolated, Southern California is not connected to any other gasoline market in the rest of the country.
“There’s a ton of refineries on the Gulf Coast, but there’s no pipeline to California,” said Mason Hamilton, petroleum markets analyst for the U.S. Energy Information Administration.
Even Southern and Northern California are not connected by pipelines but by marine vessel, meaning California has been forced to meet demand with overseas suppliers. Since the Torrance refinery explosion, gasoline imports have been arriving from as far away as Singapore, Canada and the United Kingdom.
For several weeks, Northern California refineries have been producing as much gasoline as possible because they are motivated by Southern California’s high prices, Schremp said. But they are hamstrung by a 95-year-old federal law, the Jones Act, that requires gasoline be moved from the Northern part of the state to the South by ships that are built and owned by a U.S. entity. Such ships are in short supply on the West Coast.
The good news for Orange County is that crude oil prices are expected to remain low well into 2016. And the summer blend of gasoline required in California from April through October is almost over. As of Nov. 1, refineries are no longer prohibited from using additives such as butane, so they can eke out another 5 percent to 8 percent more gasoline from every barrel of crude they process, leading to greater supply.
And, eventually, lower prices at the pump.
This article was written by Susan Carpenter from Orange County Register and was legally licensed through the NewsCred publisher network.