By Ilsa Matthes
ESCANABA - With gas prices soaring above $4 a gallon in some places, many drivers are wondering why?
"The crude oil prices are going up, but more importantly there are three refineries that have had issues," said Nancy Cain, AAA Michigan spokesperson.
According to Cain, the BP refinery in Whiting, Ind., the Citgo refinery in Lemont, Ill., and the Philips 66 refinery in Wood River, Ill., have all had issues. "If one had had an issue, it would have impacted prices, but to have all three have issues really impacted prices," she said.
The refineries experience problems due to their age and often need downtime for regular maintenance.
"We don't have any new refineries. They are all older," said Cain. "The questions is 'why don't we build new refineries?' But building a new refinery is expensive and it's hard to find communities that will accept them.
"To build a new refinery would cost millions," added Cain.
BP is in the process of modernizing the Whiting refinery, which will allow it to process 65 percent more heavy crude oil than it is currently capable of processing. The several billion dollar project is the biggest private sector investment ever in Indiana, according to BP.
"The Whiting refinery continues to operate and produce products for customers. Our other Midwestern refinery in Toledo is also operating normally. It is not down," wrote Scott Dean, a spokesperson for London-based BP in an email to the Daily Press.
When asked if the upgrades at the Whiting refinery were affecting production, Dean replied, "Not at the moment."
According to the U.S. Department of Energy Office of Electricity Delivery and Energy Reliability, BP has reported that part of the Whiting refinery is scheduled to go offline during its fourth quarter.
The DOE has also reported Citgo shut down a fluid catalytic crackling unit at the Lemont refinery on July 28 after an equipment issue caused flaring. A compressor shutdown triggered flaring at the Phillips 66 refinery on July 29.
Gas prices are expected to lower again as the refineries make repairs and go back into full production. "Hopefully the prices will moderate in a few weeks," said Cain. "Historically, prices go up quickly but don't come down quickly."
Gas stations are not always aware of the issues causing the gas prices.
"There is no correspondence between us and the oil company," said Will Carne, owner of Carne's BP on Ludington Street in Escanaba. "I can't tell people anything except what comes out of the news."
"I think the supply was cut down because of the pipeline," Carne added, referencing the closure of the Enbridge pipeline. The pipeline was shut down last month after an estimated 1,200 barrels of crude oil spilled near Grand Marsh, Wis. It had predominantly delivered light crude oil to Chicago-area refineries.
According to the DOE, the pipeline has been repaired but it is unclear when the line will restart. The pipeline cannot restart until tests and inspections prove it meets safety standards.
The higher prices are not just limited to the Upper Peninsula. "In fact, today on average across the state is $3.95, but in many places it's over $4 a gallon," said Cain.
While drivers across the Midwest are feeling the impact of the refinery issues, Michigan has been hit particularly hard. "Today Friday) Michigan's gas prices are the highest in the U.S. This is the first time that's happened since 2009," said Cain. "It's not the kind of record we want to set."