On top of the devastation California’s deadly ongoing wildfires have already caused to homes, businesses and other infrastructure, the 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 oil, gasoline, diesel and natural gas supplies could all be affected.
While the five refineries located in the Los Angeles and Long Beach areas are not under direct threat from the fires so far, several pipelines are, and that means cutting off supplies to not only California, but other states.
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It could also lead to a buildup at refineries, which might be forced to reduce their operating rates to contain inventory. Lipow said the five Los Angeles area refineries handle 60% of the refining capacity in California and 40% of the refining capacity on the West Coast, including Alaska and Hawaii.
He pointed to crude oil and natural gas pipelines in the vicinity of the Hurst Fire and Easton Fire and noted the Kinder Morgan West Line has already been shut down. It supplies some 60% of the refined products consumed in Nevada and two-thirds of the refined products consumed in Arizona.
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“I have not heard of any crude oil or natural gas pipeline shutdowns, but they are at risk not only from the obvious fire hazard, but should lose power from preventative actions taken by the local utilities,” Lipow wrote.
There are four major wildfires surrounding Los Angeles. The White House said Friday that local, state and federal fighters 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.
So far, the fires have destroyed more than 10,000 homes and businesses and left 10 people dead.
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