Explosion and inferno at Texas refinery could help push gas prices above $4 a gallon, expert warns

A blast at an Exxon Mobil oil refinery in Texas could push the price of gas over $4 per gallon, an expert has warned.

The explosion and fire left four people injured at the Baytown chemical plant in the early hours of Thursday.

Exxon confirmed that the inferno has affected part of the plant’s gasoline production.

It is the fourth largest refinery in America and experts are warning it could increase pressure on an already hampered refining capacity.

‘They’re not going to have all systems go for a couple of quarters,’ said Tom Kloza, chief oil analyst for the Oil Price Information Service.

He told CNN Business he would not be surprised if gas prices soared from the current $3.29 average to $4 across much of the country.

Gas prices are up $1.05 per gallon from a year ago – a 47 percent increase. The soaring price has been a major factor in the US inflation rate hitting a 39 year high.

In this photo from May 7, 2021, gas prices over $3.50 per gallon are seen at a service station in San Francisco, California. The current US average is $3.29

Kloza anticipates higher demand this spring and summer as the economy continues to recover from the pandemic and people travel more.

Gas prices are up $1.05 per gallon from a year ago – a 47 percent increase.

The soaring price has been a major factor in the US inflation rate hitting a 39 year high.

However, for now people don’t need to panic at the pumps as from Christmas to early February demand for gas is at its lowest levels in the year.

‘Fortunately we don’t need the gasoline [from Baytown] for the next six weeks,’ Kloza told CNN.

However, as demand surges in spring it could begin to be felt.

The problem is compounded by refinery closures this year which have reduced US refining capacity by 500,000 barrels per day.

If Baytown is totally offline it would reduce US capacity by more than a million barrels per day.

The plant has an average daily capacity to refine 561,000 barrels of oil, according to the US Energy Information Administration.

This means it is only 8 percent smaller than the largest refinery, the Motiva Enterprises facility in Port Arthur, Texas, owned by Saudi Aramco.

It is unclear to what extent the explosion and fire will have dented output – or for how long.

Officials said the blast was the result of a hydrotreater unit that was under repair.

A hydrotreater is an essential component in making fuel as it removes sulfur and nitrogen compounds from petroleum products like diesel, gasoline, and jet fuel. 

The Harris County Sheriff’s Office described the incident as a ‘major industrial accident’, with Sheriff Ed Gonzalez confirming that four contractors at the plant have been injured but were in a stable condition. 

Four people were injured when a massive fire broke out at an Exxon Mobil oil refinery in Baytown near Houston, Texas shortly after locals reported hearing an ‘explosion’ that ‘shook houses’ in the surrounding area

The Harris County Sheriff’s Office described the incident as a ‘major industrial accident’, with Sheriff Ed Gonzalez confirming that four contractors at the plant have been injured but were in a stable condition

The fire is said to have started in a hydrotreater unit that was being repaired by the contractors ‘due to a bypass line leak’

Huge flames and clouds of smoke could be seen shooting out of the Baytown chemical plant into the night sky over San Jacinto Bay. Shocked residents in Baytown and nearby Houston took to social media to ask what had happened and whether the facility was still safe

There were also no orders to evacuate or shelter-in-place.

Sheriff Gonzalez added that three of the people injured in the fire were flown to hospital by LifeFlight rescue helicopter and a fourth was taken by ambulance.

Shocked residents in Baytown and nearby Houston took to social media to ask what had happened and whether the facility was still safe.

Tonja Tolleson tweeted: ‘Just had big enough boom that house shook & everything inside the house rattled. Sounded like freight train connecting cars outside the house.’

Another commented: ‘Explosion at Exxon! It rumbled my apartment and knocked my pictures off the wall.’

A third wrote: ‘Little more than a fire, my house shook to its foundation miles away from [Exxon].’ 

Early on Thursday Exxon Mobil gave a brief update on twitter, writing: ‘Around 1 a.m. on 12/23/2021, a fire occurred at our facility. At this time, emergency vehicles and smoke may be noticeable to the community.

‘We are coordinating with local officials, and working to resolve the issue as soon as possible.’

In a update around 7am ET, the company said: ‘Our emergency response teams continue to work to extinguish the fire at our Baytown complex.

‘Our first priority is people in the community and in our facilities. And monitoring continues along the fence line. Available information shows no adverse impact at this time.

‘No shelter in place has been called for our community and near neighbours. We did keep regret any disruption or inconvenience that this incident may have caused the community.’

The 3,400-acre Baytown complex was founded 100 years ago in 1919.

This is not the first time the plant has suffered a major incident.

An explosion in 2019 is believed to have caused a massive blaze in an area of the plant that contains polypropylene material.

The incident happened at around 11.07am on July 31, with 37 people having to be treated for non-life threatening injuries, including first-degree burns.

Video footage of the terrifying fire shows bright orange flames rising from a large metal stack measuring several stories high and billowing black smoke.

Locals similarly reported that their houses and windows shook in the loud initial explosion.