Refineries

A financially troubled Bakersfield refinery appeared headed for a prolonged shutdown after management on Wednesday informed workers that it hadn't been able to cut a deal with crude oil suppliers to keep the facility operating. The plant, owned by Big West of California, has been crippled by the Dec. 22 bankruptcy filing of its parent, Flying J Inc. of Ogden, Utah.

Petroleos Mexicanos, the state-owned Mexican oil company, may begin construction of a $7-billion refinery by the end of 2010 to reduce imports of gasoline and diesel fuel. A study has been commissioned to determine the site of the new plant, according to a filing with the U.S. Securities and Exchange Commission. Mexico City-based Pemex will also begin construction on post-treatment plants for ultra-low-sulfur gasoline in 2009 and diesel by 2010.

The air smells clean and sweet off the sprawling corn and spearmint fields, but for this unincorporated town of 156, it is the smell of failure: the failure to reap the rewards of the ethanol boom. Construction crews were scheduled to start digging up the sandy soil next spring to make way for an ethanol distillery plant in San Pierre.

The pain at the pump intensified for the 11th week in a row, the Energy Department said Monday, with California's average price for self-serve regular gasoline rising 5.3 cents to $3.305 a gallon and the U.S. average jumping 7.4 cents to $2.876 a gallon during the last week. Refinery problems continued to get most of the blame from analysts for the fuel-cost increase. Valero Energy Corp., for example, said it was restarting its 170,000-barrel-per-day McKee refinery in Sunray, Texas.

Southern California air-quality regulators are fining Valero Energy Corp. $5,000 a day because the San Antonio-based company delayed upgrades to its Wilmington refinery -- at the request of California energy officials. The fine is a minor monetary annoyance for Valero, amounting each day to about half a minute's worth of profit during the first quarter.

A Southern California start-up company will receive $8 million in low-cost funding for a biodiesel plant at the Port of Stockton, the state treasurer's office said Tuesday. The plant, under construction since April, is being built by American Biodiesel Inc., an Encinitas-based company that does business as Community Fuels. Biodiesel from the plant would be sold to several wholesale distributors, including some that have retail fueling outlets in Northern California.

Oil prices reached record highs for the seventh straight session Wednesday after refineries in California and Texas said they had new outages and the government reported surprisingly large declines in oil inventories. Although oil futures jumped to a new trading high of $82.51 a barrel in the moments after the inventory report was released in the morning, they spent much of the day alternating between gains and losses before reports of refinery outages led to late-session buying.

A refinery explosion shook nearby houses and sent a fireball into the sky, but an Exxon Mobil Corp. spokeswoman said no injuries were reported. The 6:18 a.m. explosion at the company's refinery in Lockwood, northeast of Billings, occurred after piping in a high-pressure unit leaked gases that ignited, although an exact cause had not been determined. The fire was under control but not yet extinguished by Wednesday evening.

Retail gasoline prices rose nationwide and jumped substantially in California over the last week, the federal government said Monday, a partial reflection of crude oil prices that have stayed above $60 a barrel for the last three weeks. Crude oil prices, meanwhile, continued to gyrate. After strong price increases last week, the cost of light, sweet crude for January delivery fell $1.22 in light trading Monday to $62.

Regarding "Gasoline prices continue to surge" (March 6): I am confused regarding the dynamics of gasoline pricing. According to Automobile Club of Southern California spokesman Jeff Spring, our high gasoline prices are due to the fact that California does not have the refining capacity to meet demand and therefore must import. In the next paragraph Diane T. Miller of Oil Price Information Service states that one of the main reasons for California's tight gasoline supplies is that Los Angeles refineries had to increase their exports to Arizona because of a Texas refinery shutdown.