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State Senator Wants Gas Price Probe As Chevron Refinery Closure Lingers

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Smoke rises from the Richmond Chevron refinery fire (CBS)

Smoke rises from the Richmond Chevron refinery fire (CBS)

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SACRAMENTO (CBS SF) — A state senator called for a legislative hearing regarding California’s oil refineries after Chevron announced that a unit at its Richmond refinery will remain closed until next year.

Sen. Mark Leno said Wednesday that recent price spikes and shortages “indicate serious problems” with the state’s 15 refineries. The San Francisco Democrat is chairman of the Senate Select Committee on Bay Area Transportation.

The committee will meet next month to consider the safety and reliability of California’s gasoline production system and how it affects prices and the economy.

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Leno says refineries have no incentive to keep their operations going because oil companies’ profits increase whenever there is a disruption in supply.

Some analysts have speculated that California gas pumps will remain high as long as Chevron has to operate the facility at reduced capacity.

“I want to see if the state should put in place some incentive for the industry and keep their infrastructure in operating order might there be some penalties they have to pay,” said Leno.

A fire at Chevron’s Richmond refinery in August contributed to a spike that pushed gas prices near $5 a gallon.

KCBS’ Melissa Culross Reports: 

“We’re continuing to make transportation fuels like gasoline and lubricants, but at a reduced capacity,” said Chevron spokesman Sean Comey.

Comey said the crude unit that was damaged in the August 6th fire is projected to remain offline through the rest of the year.

Chevron said it is currently trying to obtain the permits necessary to repair equipment at the unit.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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