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| A Chevron refinery burns in Richmond, CA on August 6, 2012. Lance Iverson, AP |
A California oil refinery burst into flames yesterday, and it's telling that the majority of articles on the subject don't even pause to talk about injuries or fatalities (few and none, as far as I can tell) before speculating on the effect this will have on gas prices.
They're right to be concerned, evidently:
"Watching the national average rise since last week, one might have expected war broke out in the Middle East or a major hurricane shutting down production, neither of which happened, yet gasoline prices spiked." -Patrick DeHaan, senior petroleum analyst for the price watch websites run by GasBuddy.com, emphasis mine.
Yes, these spikes in prices are caused by lapses in refining capacity, and not supply of crude oil per se, yet there was a time when there were sufficient stockpiles of fuel in the petroleum production chain that hiccups in refining were smoothed out before disrupting the fuel supply. And yet according to the LA Times, California's stocks of gas and diesel are down 14.7% and 13.7% from this time last year. Any interruption of fuel delivery, whether due to burst pipelines or damaged refineries, is now being immediately felt at the pump. Like a diabetic whose blood sugar just crashed.
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