Could the Texas Refinery Fire Bring Us (Even) Higher Gas Prices?
One of the places we’ve seen inflation hit us the hardest is at the gas pump (Let’s go, Brandon). Even though gas prices have dipped a bit over the past couple of weeks, they’re still up $1.09 per gallon over this time last year.
But could prices go up even more? A refinery explosion in Texas and the ensuing fire could add insult to gas price injury.
The explosion at ExxonMobil’s plant in Baytown, Texas, near Houston, injured four people, but Rohan Davis, manager of the refinery, said that all employees were accounted for. Three of the injured were helicoptered to the hospital, while one went by ambulance.
Harris County Sheriff Ed Gonzalez called the blast a “major industrial accident” and added that “initial reports indicated some type of explosion occurred inside the plant.”
The 3,400-acre facility houses a chemical plant as well as the refinery, which can process up to 584,000 barrels of crude oil per day, according to ExxonMobil. The explosion occurred in the refinery portion of the plant, which will obviously affect the plant’s ability to process oil.
ExxonMobil issued a statement via Twitter, in which the company said it’s monitoring the environmental impact of the blast.
“ExxonMobil emergency response teams have safely extinguished the fire at the Baytown Refinery,” the statement reads in part. “Our first priority is people in the community and in our facilities. Air monitoring continues along the fence line. Available information shows no adverse air quality monitoring impact to the community or personnel on site at this time.”
This explosion and fire could have an impact on gas prices, but consumers wouldn’t necessarily see the effects for a few months. That’s partially because the shorter hours of daylight in early winter equal lower demand for gasoline because people aren’t driving as much.
But when springtime draws near, demand for gasoline goes up, and that’s when we could see prices spike.
Related: CNN Responds to White House Pressure With Glowing Coverage of 5-Cent Drop in Gas Prices
According to the U.S. Energy Information Administration, the Baytown refinery is the fourth-largest in the country, which makes diminished capacity an even greater concern.
Tom Kloza, chief oil analyst for the Oil Price Information Service, told CNN Business that the explosion and fire could take the Baytown refinery out of commission for several months.
“They’re not going to have all systems go for a couple of quarters,” he said.
Patrick de Haan of Gas Buddy also believes that consumers won’t see an immediate effect from the refinery fire.
“It’s too early for anyone to know exactly how this could impact gasoline production,” he tweeted.
Of course, we know that refinery fires aren’t the only reason for higher gas prices. We can blame issues at other refineries, Hurricane Ida, and greater demand as drivers began to travel after the worst of the pandemic for some of the spike in prices, but the bulk of the problem stems from the policies of the Biden administration. After all, thanks to Biden and his team, we’ve gone from a net exporter of oil to a nation that’s once again dependent on the Middle East for oil.
I never want to diminish this terrible accident, and of course, we should pray for those who were injured as well as those whose jobs have been affected by the explosion and resulting fire. But in light of our already high gas prices, an accident like the one in Baytown is the last thing we needed at the pump.
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