Refiners Threaten Less Output

California oil refiners are threatening to produce less gasoline if they are not exempted from rolling blackouts caused by the state's electricity crisis -- a move that could further boost the nation's highest pump prices.
Chevron Corp. and San Antonio-based Valero Energy Corp. said they would be forced to reduce production at their refineries because the threat of blackouts would require them to rely on less-powerful back-up generators, according to Reuters.

"We don't have the back-up generation to maintain full production," said Valero spokeswoman Mary Rose Brown of the company's 130,000 barrel per day (bpd) Benecia refinery. Neither company would say by how much they would have to reduce output.

The threat of less gasoline in the state, which currently has the highest pump prices in the nation of more than $2 a gallon, could add to an already tight energy situation freely called a "crisis" by the Bush Administration.

California oil refiners that applied for exemption from the state's planned blackouts -- the result of a shortage of power ahead of summer air conditioning season -- are still waiting for a decision from the California Public Utilities Commission (CPUC). The CPUC has said it will likely make decisions on the first batch of applications at its Aug. 2 meeting.

Valero has only one refinery in California while Chevron has two -- a 175,000 bpd plant in El Segundo near Los Angeles, and a 240,000 bpd plant in Richmond across the Bay from San Francisco.
This ad will auto-close in 10 seconds