MIAMI (CBSMiami) – Just as South Florida was starting to see a gradual decline in gasoline prices, we could see a hurricane kick them higher again, even though Irene passed us by. Blame the potential hike on eastern refineries at risk from Irene.
While most people think of Texas and the Gulf coast when they think of oil refineries, the East Coast is host to a number major refining operations, many of which are in the potential path of Hurricane Irene.
Unable to risk the possibility that the storm could hit an unprotected refinery, many operations have already started to shut down operations in advance of the storm, and the longer they are out of service, the less capacity the US has to turn oil into gasoline.
That leads to scarcity, and scarcity usually means higher prices.
“Even if the storm eventually misses them, they can’t take chances,” says Ben Brockwell at the Oil Price Information Service, which monitors fuel shipments around the country.
East Coast refineries are located in Virginia, Delaware, Pennsylvania and New Jersey. They account for 7 percent of the nation’s refining capability, producing more than 19 million gallons of gasoline and diesel a day, according to the Energy Information Administration. There are eight east coast refineries: PBF Energy Partners’ plant in Delaware City, Del. and Paulsboro, N.J.; ConocoPhillips’ plants in Linden, N.J. and Trainer,PA.; Hess Corp.’s Port Reading plant; United Refining in Warren, PA.; and Sunoco’s refineries in Marcus Hook and Philadelphia.
Experts say price increases could be sharp. In 2008, prices jumped 21 cents a gallon in just over a week when Hurricane Ike hit the Gulf Coast, affecting refineries there. It took weeks for prices to return to pre-storm levels.