California wildfires threaten oil and gas supplies

On top of the devastation The deadly fires in California are ongoing have already caused to houses, businesses and other infrastructures, uncontained fires could hurt the flow of energy in the region and beyond.

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

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

While the five refineries located in the Los Angeles and the areas of Long Beach are not directly threatened by the fires so far, many pipelines are, and this means cutting the supply not only in California, but in 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 Los Angeles-area refineries handle 60% of refining capacity in California and 40% of refining capacity on the West Coast, including Alaska and Hawaii.

Vehicles pass the Phillips 66 Los Angeles Refinery Wilmington Plant 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 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 crude oil or natural gas pipeline shutdowns, but they are at risk not only because of the obvious fire hazard, but they will lose power due to preventive actions taken by local utilities” , Lipow wrote.

A fire 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 large fires surrounding Los Angeles. The White House said Friday that local, state and federal firefighters were able to partially contain some of the largest fires overnight.

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

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So far, the fires have destroyed more than 10,000 homes and businesses and left 10 dead.