Gas Prices Spike as Suncor Refinery Shutdowns Cause Shortages

USA : Gov. Polis acts to Ward Off Gas Supply Crisis: Temporary regulations lift to enable faster transfers and longer hauls for drivers. In response to Suncor Energy’s temporary shut-down of its Colorado refinery due to malfunctions related to cold weather, Governor Jared Polis has issued an emergency declaration over the weekend as a precautionary measure against potential gas shortages and price increases in the state.

The executive order grants truck drivers carrying gasoline in Colorado the ability to work longer hours and deliver heavier loads of fuel on highways; allowing Colorado Department of Public Health and Environment on a case-by-case basis to waive emissions control, expediting fuel transfers. Greg Fulton, president of the Colorado Motorcarriers Association, noted that while truckers won’t be compromising safety by working extended hours, they will be aided while waiting in long lines at distribution points such as Magellan Midstream Partners pipeline in Aurora.

Additionally, allowing heavier loads makes it easier for them to bring back more gasoline - reducing the impact on Coloradans and their pocketbooks. The governor’s efforts are anticipated to lessen the strain on Colorado's fuel chain until full refining capacity is achieved.

On Wednesday, Suncor Energy, a Canada-based company, announced a long-term shutdown of their Commerce City refinery in Colorado. This was in response to an arctic cold front that sent temperatures below zero and caused a cascading effect of malfunctions throughout the plant.

As a result of the shutdown, excess pollutants were released and two fires occurred at the facility - injuring two workers on Dec. 24. Suncor has since decided to inspect and repair damaged equipment before returning to full operations in March 2021. Though motorists will be paying higher prices at the pump due to the lack of supply from Colorado's only oil refinery, shortages are not expected as there is ample pipeline capacity to ship fuel from other states such as Texas, Kansas, and Wyoming.

Additionally, jet fuel prices may also rise due to the Suncor refinery closure which could lead to an increase in air travel ticket costs. According to Jesse Mercer from Enverus, “The Denver metro area is likely to feel [the] brunt of that unfortunately."

The shutdown of Colorado's Suncor Energy refinery has caused an increase in jet fuel prices and a rise in costs for motorists. This is due to the local supply of jet fuel becoming tight, as Suncor supplies one out of every three gallons to Denver International Airport. Fortunately, there is a storage terminal near the airport that is connected by pipeline to suppliers from outside the state, although airlines can help to reduce pressure on the local market by fueling up from other states. Skyler McKinley from AAA Colorado put this event into perspective by comparing it to Wisconsin - another state with similar population size - which lost its only oil refinery in 2018 after an explosion and fire damaged it.

Despite these circumstances, gas prices in Wisconsin remain roughly on par with the national average. The same cannot be said for Colorado where the statewide average price has risen from $ 2.81 a week ago to $ 2.93 a gallon Tuesday, meaning Ken Wilson's family-owned Wilson Conoco had to raise their prices 77 cents per gallon since mid-December - something that hits customers hard given how low prices had been until this happened.