By Amanda Drane STAFF WRITER
Flaring at Valero’s refinery in Houston’s Manchester neighborhood sent black smoke billowing above the East End on Monday morning.
Valero said in an emergency alert posted on the East Harris County Manufacturers Association’s website that flaring became necessary after a power outage along the Houston Ship Channel. The company said it was using flaring to “manage excess material and minimize potential emissions” and that it didn’t expect it to affect the surrounding community.
Also Monday, Shell Deer Park Chemicals warned neighbors of possible flaring. “We are taking steps to minimize any noise, light, or smoke associated with this flaring activity,” it said in an alert. “We apologize for any inconvenience our flaring activity might cause our neighbors.”
Meanwhile, Bloomberg reported that Valero’s Texas City refinery also was offline, joining outages at refineries owned by Marathon Petroleum and Chevron. Valero’s 225,000 barrel-a-day plant in Texas City began restarting some production units Saturday, but full restoration of operations could take several days.
Marathon said a power outage bumped its Galveston Bay refinery offline, leading to flaring at the Texas City plant. The 593,000 barrel-a-day facility was knocked out of commission Friday as subfreezing temperatures took out power along the Gulf Coast.
Flaring after such outages rains chemicals on surrounding neighborhoods, polluting the air and affecting the health of sensitive groups, said Bryan Parras, an East End resident and an organizer with environmental advocacy group the Sierra Club.
“One of these events can exceed the permitted levels they are allowed to emit for the entire year, depending on how long the flaring lasts,” he said.
A spokesman for Marathon declined to say whether the outage was still affecting its local refinery. Chevron’s Pasadena refinery on the Houston Ship Channel is trying to restart operations after boilers went down. Valero could not be immediately reached for further comment.
The outages could have an outsize impact on a market already squeezed for supplies. They represent about 1.2 million barrels a day of Gulf Coast refining capacity.
Refiners this year are poised to enjoy fatter profit margins as stronger U.S. demand meets a market where more than 1 million barrels of capacity has been lost during the past two years. With a tightly supplied market and demand set to challenge 2019 levels, the last thing crude oil refiners need are unplanned outages slowing them down.
Refinery utilization on the Gulf Coast, the largest concentration of U.S. refining might, was only 86 percent for the week ended Jan. 28, as the plants perform maintenance that was pushed back in 2020 and 2021 to conserve cash during the height of the pandemic.
Energy Aspects has already forecast that planned maintenance alone will take out more than 1.4 million barrels a day of U.S. crude capacity from January through April. That’s about 200,000 barrels a day more taken offline for work than during the same period in the years 2015 to 2019.
The market for their products is robust if refiners can keep increasing run rates. The four-week average for products supplied in the U.S., such as gasoline and jet fuel, jumped 2.1 percent to 21.6 million barrels a day in the week ended Jan. 28, the highest since August 2019.
Gulf Coast gasoline supplies have fallen for two consecutive weeks. Distillate inventories in the region fell 4.8 percent to the lowest since Dec. 24. On the East Coast, the stockpiles have dropped for eight straight weeks to the lowest since April 2020.
This report contains material from
Bloomberg News. amanda.drane@chron.com