COMMERCE CITY, Colo. (KDVR) — The Suncor refinery in Commerce City will be closed for months, and experts say drivers will see the effects in fuel prices.
Suncor announced the shutdown on Wednesday after two employees were hurt in a fire at the refinery on Saturday. While Suncor did not mention the incident in its announcement, it said the refinery began to shut down the same day after extreme weather led to damaged equipment.
“It was determined that the entire facility would be shut down and put into safe mode to allow for the inspection of all units and repair of the damaged equipment,” Suncor’s statement said in part.
According to the Colorado Department of Public Health and Environment, there are no ongoing threats to the public at this time, but the potential risks to the community will be evaluated during the investigation.
Suncor reported last week that its refinery alarm was activated on Dec. 22, during an arctic cold front, again when the fire happened on Dec. 24 and once more on Dec. 27. The company projected that the refinery will not return to full operations until late in the first quarter of 2023. That means it could be sometime in March.
“The inspection and repair of the damaged equipment is ongoing,” according to Suncor’s statement.
What Suncor’s shutdown means for gas prices
The refinery employs about 500 people. Suncor says it buys crude oil from the Denver-Julesburg Basin to process in Commerce City, selling 95% of the products within Colorado. That includes gasoline, diesel, paving asphalt and jet fuel, including about a third of the jet fuel used at Denver International Airport.
Suncor makes up 35-40% of the gasoline and diesel market, “depending on time of year,” according to Grier Bailey, spokesperson for the Colorado Wyoming Petroleum Marketers Association.
Bailey said wholesale and diesel prices will increase, with the effects to reach retail consumers “within days.”
How long could those changes last?
“In the short term, you’ll see some price increases relative to diminished supply,” said Skyler McKinley with AAA. “In the longer term, as other suppliers step in, that will stabilize — although also at higher cost than the market would otherwise bear as a function of the increased cost of getting refined product to Colorado.”
McKinley also pointed to the coming switch to reformulated gasoline, as required by the EPA, “which also carries increased costs to refine and distribute.”
Suncor shutdown another hurdle for refinery
An arctic cold front blasted into the U.S. last week, bringing subzero temperatures to Colorado’s Front Range and wind chill temperatures lower than minus 40 in the Denver metro. The deep freeze affected infrastructure around the country, including airlines, which are only now starting to inch toward regular operations.
Suncor, a Canadian oil company, operates Colorado’s only petroleum refinery and is a major emitter of greenhouse gas emissions in the state. Its Colorado operations have faced heightened scrutiny in recent years.
The refinery in North Denver has a history of noncompliance when it comes to pollution regulations, leading to a record $9 million settlement with Colorado over air quality violations, including an incident when white ash rained from the facility on nearby neighborhoods.
In March, the EPA objected to a key air permit for the facility that state regulators were still reviewing 10 years after its original expiration date, the Associated Press reported. The agency raised “significant environmental justice concerns” and said that the public wasn’t given enough opportunity to weigh in.
The EPA didn’t object when the state issued a revised permit, but it is now investigating whether Colorado is discriminatory in its air pollution regulation, including of Suncor.
As of Thursday, CDPHE reported that Suncor was reporting excess sulfur dioxide emissions. The total sulfur dioxide emissions from the refinery were reported as 947 pounds over a 24-hour period which is above the reporting threshold of 500 pounds.