Explaining Southern California's economy

Why is BP selling its refinery in Carson, California?

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Matt DeBord/KPCC

These stations belong to Texas-based Tesoro now. BP is selling the Arco brand, along with a big refinery in California

As the L.A. Times rightly points out, the fire at Chevron's Richmond refinery in Northern California — and the ensuing spike in gas prices — has overshadowed a deal between BP and Tesoro of take over a big BP refinery in Carson:

During any other week this year, the biggest energy news in California would have probably been the long-awaited announcement of a buyer for BP's 266,000-barrel-a-day refinery in Carson, which is the state's largest such facility.

First, the deal will make San Antonio-based Tesoro Corp. California's biggest and most important refiner of motor fuels. Tesoro already owns the state's fourth-largest refinery, the 166,000-barrel-a-day Golden Eagle (Avon/Rodeo) facility and a 97,000-barrel-a-day refinery in Wilmington.

The BP deal will push it ahead of Chevron, which has two refineries that produce about 503,000 barrels a day. Tesoro will have 528,000 barrels a day of capacity.

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Q&A: Chevron Richmond refinery fire and higher gas prices in SoCal

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Corey Bridwell/KPCC

Gas prices at a Chevron station in Pasadena. In Southern California, in the aftermath of Chevron's Richmond fire, prices could climb this high or higher in coming weeks.

The fire that broke out at Chevron's Richmond refinery last night is now under control, but the impact on gas prices in the California is just beginning. Even though the damage was done in the Bay Area, Southern California is likely to feel the impact. Here's a Q&A to explain the situation.

Q: How expensive is gas going to get in SoCal?

A: Analysts who follow the oil-and-gas markets have been reported predicting a spike of 25-40 cents this week, in a California market that's already paying a lot more for its gasoline than the rest of the country: $3.86 per gallon versus $3.63 for the rest of the U.S., according to AAA (via CNBC). Los Angeles drivers are paying even more than that: $3.93 per gallon. That's a ways off from the $5 per gallon peaks that we hit during the summer of 2008. But it still isn't pretty.

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