Oil refinery blast reignites higher crude oil prices

| 3/25/2005

After a one-day break from near-record prices, the price of crude oil went up again after an explosion at British Petroleum’s refinery in Texas City, TX.

After dropping below $54 for a single day, oil on the New York Mercantile Exchange was up to $54.84 at the end of trading Thursday, March 24. The closing price was roughly a dollar above the previous day’s.

The explosion Wednesday, March 23, killed 15 people at the Texas facility, which media outlets identified as the third-largest refinery in the United States. The facility supplies 30 percent of BP’s total U.S. output of all petroleum products, and 3 percent of the overall national supply.

“The fire at the company’s isomerization unit occurred at about 1:20 this afternoon and was extinguished at 3:22 p.m.,” Don Parus, BP’s Texas City refinery manager, said in a statement March 23. “The cause of the explosion and fire is not known.”

Ross Pillari, president of BP America, said the company would cooperate with local, state and federal authorities as they attempt to determine what caused the explosion. Meanwhile, Reuters news service reported that company officials had ruled out terrorism as a cause.

The isomerization unit involved in the explosion helps process gasoline; other operations at the plant were not affected, according to published reports.

The explosion came at a bad time. The price of crude oil on the New York exchange had been flying at record levels near $57 a barrel. It dropped slightly for one day March 23 after the government issued a report indicating higher-than-expected stocks of fuel in the United States.

The crude oil crisis has continued to cause damage as the price at the pump eats away at the income of owner-operators and others in the trucking industry who purchase fuel.

As the price of crude oil – and the fuel produced from it – continues to increase, the Owner-Operator Independent Drivers Association is urging truckers across the country to write, fax and call their U.S. senators and ask them to include fuel surcharge language from the U.S. House in the Senate’s version of the highway bill.

The U.S. House approved as part of its version of the highway bill – with a fuel surcharge provision – earlier this month. The surcharge language in the House bill at Section 4139 requires all motor carriers, brokers and freight forwarders running truckload freight to implement fuel surcharges and pass on 100 percent of those surcharges on to the person who actually pays for the fuel.

Congress is in recess until April 4, but the Senate Commerce Committee is scheduled to take up its portion of the highway bill as soon as it reconvenes the first week of April.

If truckers are not sure who their senators are or how to contact them, they may phone the OOIDA Membership Department and ask for the information. The toll-free OOIDA number is 1-800-444-5791. Truckers can also call the U.S. Capitol switchboard at (202) 224-3121, give the operator their ZIP code and then be connected directly to their senators’ offices.