Benicia Port Fire Could Spur New Round of Inflation
BENICIA (KPIX) -- It took firefighters just over 24 hours to put out a four-alarm fire at the port of Benicia that broke out Saturday afternoon. While investigators look for the cause of the fire, the port and the companies that use it are assessing how big an economic impact the fire will have in the Bay Area.
The Valero refinery uses the Benicia port to offload crude oil from freighters. The fire damaged a conveyor belt that transports a byproduct of the refining process called petroleum coke which must be eliminated. Energy experts say that, if Valero can't get rid of the petroleum coke, it will disrupt their ability to produce gasoline.
"Any kind of a supply constraint like this will tend to push (gas) prices up," said Dave Hackett, chairman of Stillwater Associates, a transportation and energy consulting company based in Irvine.
"We'll know better (on Monday) morning when the market opens what sort of reactions go on. And whether or not that gets to the retail market, gets to the pump, is a little too soon to tell. But, again, it's not helpful," Hackett said.
Valero declined to answer questions about how the disruption will impact their gasoline production.
Benicia deputy city manager Mario Giuliani said the city was waiting for inspectors to do a full damage assessment on the port.
"If the port is out of commission and there's a challenge to bringing in crude to that refinery, that will absolutely have an impact. Valero certainly supplies a lot of California's gasoline and, if they're impacted in being able to process crude, that's going to be a challenge for this region," said Giuliani.
Aside from affecting Valero, Amports uses the port to import new Toyotas from Japan. The U.S. Coast Guard and other agencies will inspect and decide if a portion of the dock is still structurally safe for Amports to offload cars. A local Toyota dealer said that any kind of disruption could further hurt dealerships waiting for new cars. Many dealerships are already seeing empty lots and a shortage of cars due to the pandemic.
Amports general manager declined to comment. Benicia city leaders are waiting to learn how long the port will be out of commission.