California wildfires threaten oil and gas supplies


Above the devastation The ongoing deadly wildfires in California have already tore through homes, businesses and other infrastructure, uncontained fires could disrupt the flow of power in the region and beyond.

Lipow Oil Associates president Andy Lipow warned in a note this week that crude oilsupplies of gasoline, diesel, and natural gas could be affected.

Oil storage tanks

Storage tanks at Marathon Petroleum’s Los Angeles refinery, which processes domestic and imported crude oil, gasoline, diesel and other petroleum products, in Carson, California, March 11, 2022. (Reuters/Bing Guan/Reuters Photos)

While the five refineries located in los angeles and areas of Long Beach are not under direct threat from the fires so far, there are several pipelines, and this means cutting off the supply not only to California, but to other states.

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It could also lead to a build-up in refineries, which could be forced to reduce their operating rates to contain inventory. Lipow said the five refineries in the Los Angeles area handle 60 percent of refining capacity in California and 40 percent of refining capacity on the West Coast, including Alaska and Hawaii.

California gas

Vehicles pass through the Wilmington plant of the Los Angeles Phillips 66 refinery on November 28, 2022 in Wilmington, California. (Mario Tama/Getty Images/Getty Images)

He pointed to crude oil and natural gas pipelines in the vicinity of the Hurst Fire and Easton Fire and noted that the Kinder Morgan West line has already been shut down. It supplies about 60% of the refined products consumed in Nevada and two-thirds of the refined products consumed in Arizona.

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“I haven’t heard of any shutdowns of crude oil or natural gas pipelines, but they are at risk not only because of the obvious fire hazard, but should they lose power because of the preventive actions taken by local companies,” Lipow wrote.

PACIFIC PALISADES, CALIF JANUARY 7, 2024 A firefighting aircraft makes a drop on the Palisades Fire in Pacific Palisades on Tuesday, January 7. The Palisades fire is being pushed by gusty Santa Ana winds that were expected to continue for two more days. (Brian van der Brug/Los Angeles Times via Getty Images)

A firefighting plane makes a drop on the Palisades fire in Pacific Palisades on Tuesday, January 7. (Brian van der Brug/Los Angeles Times via Getty Images/Getty Images)

There are four of them major forest fires around Los Angeles. The White House said Friday that local, state and federal firefighters were able to partially contain some of the larger fires overnight.

Officials said the fire in Pasadena is 3 percent contained, while the Pacific Palisades fire is 8 percent contained. The Ventura fire is 35% contained and the Sylmar fire is 37% contained.

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The fires have so far destroyed more than 10,000 homes and businesses and left 10 dead.



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