Oil refinery closure may drive up gas prices

Rescue workers clean oil from a kitten rescued from a home Tuesday after flooding combined with an oil spill affected a large part of Coffeyville.

? Midwestern states that depend on fuel supplies from the flooded refinery in Coffeyville will see some of the highest prices in the nation for gasoline and diesel this summer, industry experts said.

“It is really bad timing, it is bad luck. … For all intents and purposes it looks like that refinery is not going to be contributing any gasoline or diesel fuel for the rest of the summer,” said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service.

Normally at this time of year, Kansas wholesale prices trade at a nickel above the Gulf Coast, but on Tuesday they were trading 25 to 30 cents above Gulf Coast prices, Kloza said.

Although the Coffeyville refinery contributes less than 1 percent of the nation’s gasoline production, it represents a healthy chunk of Great Plains production, Kloza said.

That will especially affect gasoline prices in Oklahoma, Kansas, Nebraska, South Dakota, North Dakota and Minnesota – states that had recently seen a drop in gasoline prices.

Up until the flood, those states would have had gasoline prices at or below the prices of a year ago. Now they will instead see prices closer to $3 a gallon for the rest of the summer, Kloza said.

“Kansas and Oklahoma always show up with some of the cheapest prices in the country – that is probably not going to be the case for this July and August,” he said.

Coffeyville Resources produced 108,000 barrels per day of gasoline, diesel and other fuel oils. The facility is one of three refineries in Kansas. The others are in McPherson and El Dorado.

Coffeyville Resources said Tuesday it will not know the extent of damage from the record high floods until workers can get in and do a thorough assessment. The entire refinery and nitrogen fertilizer plant are under 2 to 6 feet of water from the overflowing Verdigris River nearby.

The company cannot estimate when it will resume operations until workers can fully assess what needs to be replaced or repaired to bring the refinery back up safely, he said.

An estimated 42,000 gallons of crude oil spilled from the refinery Sunday, coating everything it touched with a slimy layer of black gunk.