Chicago-area oil refinery shutdown prompts hours of service waiver for fuel haulers

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Updated Aug 30, 2022

A fire at BP’s Whiting, Indiana, oil refinery has temporarily shut down the facility and, as of Monday morning, the timing of the restart is unknown. 

According to BP, the fire occurred on Wednesday, Aug. 24, and was limited to a single electrical system and quickly extinguished, "but led to a loss of utilities in other parts of the refinery," said Christina Audisho, media relations manager for BP. 

Audisho added that "BP is making progress in restoring the utilities needed to bring the plant back to normal operations," but no date was given. She added, however, that the company "is making significant progress and working toward a phased restart of the refinery."

Tom Kloza, Global Head of Energy Analysis for the Oil Price Information Service, said OPIS sources say "most of the units at Whiting should be restarted this week."

In response to the refinery’s shutdown, the Federal Motor Carrier Safety Administration issued a regional emergency declaration for fuel haulers in four Midwestern states -- Indiana, Illinois, Michigan and Wisconsin.

The declaration exempts motor carriers and drivers from 49 Code of Federal Regulations 395.3, or maximum driving time limits, if hauling with direct assistance in support of relief efforts related to shortages of gasoline, diesel and jet fuel in the affected states due to the fire. 

Direct support and assistance ends when a driver or commercial motor vehicle is used in interstate commerce to transport cargo or provide services that are not in support of emergency relief efforts related to the emergency.

When a driver is moving from emergency relief efforts to normal operations, a 10-hour break is required when the total time a driver is engaged in emergency relief efforts, or in a combination of emergency relief and normal operations, equals or exceeds 14 hours.

FMCSA’s declaration is currently set to expire at 11:59 p.m. on Sept. 10, or when the emergency ends, whichever is sooner.

According to BP, its Whiting, Indiana, refinery is the largest in the Midwest and the company’s largest in the world. It processes around 440,000 barrels of crude oil per day and produces around 10 million gallons of gasoline, 4 million gallons of diesel and 2 million gallons of jet fuel daily, the company said in a fact sheet about the refinery.

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The shutdown occurs at a time when diesel demand is ramping up in the region due in large part to fall harvests. According to a report from Bloomberg, distillate inventories, including diesel, in the region are at their lowest seasonally since 2006. BP noted that it is working with its partners to secure fuel for the Midwest region. 

Chris Lee, vice president of marketing for ProMiles, observed retail diesel price spikes in Illinois, Indiana and Wisconsin in the days following the BP Whiting shutdown. According to ProMiles data, average prices in Illinois rose from $5 per gallon on Aug. 24 to $5.17 per gallon on Aug. 28. Indiana saw a similar jump, rising from $5.14/gal on Aug. 24 to $5.26/gal on Aug. 28. Wisconsin saw the biggest jump of the three states following the shutdown, rising from $4.75/gal on Aug. 24 to $5/gal on Aug. 28.

This story will be updated as more information becomes available.

[Related: Moving beyond the horror of high fuel on the road to profit]

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