SAN RAMON -- In a disclosure that could keep gasoline prices at high levels for months to come, Chevron said Tuesday that the crude unit damaged in the Aug. 6 fire at the energy giant's Richmond refinery will remain closed through the end of this year.
The unsettling disclosure was made as part of Chevron's regular interim update on its earnings results. "The Richmond crude unit is expected to remain offline through the fourth quarter of 2012," Chevron said.
San Ramon-based Chevron has operated the Richmond refinery at about 60 percent capacity since the fire. The crude unit is considered to be the heart of the refinery because it distills crude oil into fuels such as gasoline.
"U.S. refinery crude-input volumes decreased by 92,000 barrels per day compared to the second quarter, largely reflecting the shutdown of the Richmond refinery crude unit," Chevron said.
Montana-based economist and energy market consultant Bob van der Valk said he thinks Chevron will decide to permanently halt crude oil processing at the hobbled refinery.
"I'm officially calling the Richmond plant as being dead on arrival as a crude oil refinery," van der Valk said in an interview. "Chevron will just blend gasoline and bring in components for that. It could be more efficient for Chevron to do that."
Although gasoline prices fell Tuesday in the Bay Area and statewide, van der Valk and other analysts believe the relief will be short-lived, especially if the Richmond refinery remains at reduced production levels and other refineries suffer hiccups on the West Coast.
"This is just a taste of the higher prices we can expect in California," van der Valk said.
Contact George Avalos at 925-977-8477. Follow him at Twitter.com/george_avalos.