Suncor restarting one fuel plant at Commerce City refinery

Suncor Energy is restarting fuel production at one of the three plants at its Commerce City oil refinery following a six-week shutdown, but it’s too soon to determine how that will impact the region’s gas prices.

It will take several days for Plant 2, which refines oil into gasoline, diesel and jet fuel, to return to normal operations, said Loa Esquilin Garcia, a Suncor Energy spokeswoman. The company plans to have all three plants operational by the end of March.

“We call it a progressive restart because it takes several days to go from cold to hot,” Garcia said.

Suncor issued a public notification about the restart on Thursday afternoon, saying people near the plant will notice increased flaring from smokestacks. During flaring, orange flames are emitted from the stacks as workers burn off excess gases to decrease pressure at the plant.

Flaring is controversial because it also releases toxins into the atmosphere. State and local air quality regulators are aware of the restart and will be monitoring air quality around the refinery, the public notification said.

When fully operational, Suncor’s Commerce City facility refines 98,000 barrels of crude oil per day and accounts for about 40% of the gasoline supply in Colorado. But it’s unclear how Plant 2’s return to operation will impact that supply since Suncor did not specify what Plant 2’s refining capacity is or whether it plans to make gasoline, diesel or jet fuel first.

“I don’t have specific volumes, but I can tell you we’re working hard to produce as much product as we safely can,” Garcia said.

Gas prices in Colorado have been higher than the national average since the company shuttered operations after a cold snap in late December caused major equipment malfunctions. On Wednesday, the U.S. Energy Information Administration said the elevated prices in Colorado were a result of the Suncor closure.

Since Dec. 26, gas prices in Denver and Colorado have increased by more than $1 per gallon, the administration’s report stated. Nationally, the price of a gallon has dropped during that period.

On Thursday, the average Colorado price for a gallon was $3.95 while the national average was $3.44, according to AAA.

The Energy Information Administration predicts the retail price for gas in Colorado will remain elevated in February as low inventory continues and become even higher in March and April as consumer demand grows with warming weather.

“Prices are normally lower during the first quarter before rising in the spring and peaking during the summer driving season,” the report said. “As a result, we expect prices to increase in April as well, to reflect normal seasonal demand patterns, even though we expect the refinery to have come back online by that time, in line with Suncor’s announced expectations.”

Gov. Jared Polis in January temporarily lifted regulations on the trucking industry to alleviate potential gas shortages and price increases as more gas was driven into the state from Wyoming, Nebraska and Kansas.

Grier Bailey, executive director of the Colorado Wyoming Petroleum Marketers Association, said it was good news to hear that one of Suncor’s three plants was returning to operation. But it was too early to predict how it would affect gas prices in the coming weeks.

“From my perspective, any increase in supply helps,” Bailey said.

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