A Woods Cross oil refinery is shutting down voluntarily after federal regulators found problems that may have led to an explosion last week.
On Nov. 4, an explosion at Silver Eagle Refining rocked a nearby neighborhood and damaged at least a dozen homes, making two uninhabitable.
The blast, which was felt from Salt Lake to Roy, occurred after hydrogen and diesel fuel leaked from a pipeline and ignited, setting off the massive explosion.
U.S. Chemical Safety and Hazard Investigation Board Chairman John Bresland issued a statement Friday saying that "preliminary findings indicate that the explosion occurred when a 10-inch pipe failed catastrophically."
"Although the failure mechanism has yet to be determined, the pipe showed evidence of significant thinning, which had not been detected by the refinery's mechanical-integrity program," Bresland said in the statement. "In my view, the best course of action for the refinery would be to stand down as quickly and safely as possible. The refinery units should remain shut down until the integrity and fitness for service of all the equipment can be documented and verified."
Silver Eagle's management responded positively to the suggestion and agreed to begin an orderly process to "stand down the refinery until these steps are accomplished," according to the statement.
Silver Eagle Refining officials said the use of "certain processing units" already have been suspended and that all processing operations would be temporarily suspended in an "orderly and safe fashion." After any needed repairs have been made and the units have been fully inspected for safety, the units and refining operations will resume, Silver Eagle officials said in a statement Friday.
"We have decided to do this because our top priority is the health and safety of our employees and the community," said Silver Eagle Refining President Dave McSwain. "We believe this is the best decision given the circumstances."
Over the coming weeks, the refinery will review and assess the situation and continue to report to all concerned, McSwain said.
"We are committed to being a responsible business in the community and being a contributor to an important industry sector," he said. "We take our operating responsibility very seriously."
Woods Cross Mayor Kent Parry said city officials were pleased with the refinery's decision to shut down, at least temporarily.
Residents and city officials have been clamoring for an independent assessment of the refinery, Parry said, because until Friday, Woods Cross has relied on Silver Eagle's internal assessments of its safety.
But Silver Eagle's willingness to stand down should be seen as a win-win, he said.
It's also a victory for residents, who can take some solace in the fact that somebody outside the refinery is looking at its safety practices, the mayor said. And the refinery wins because it likely will end up with a checklist of items it needs to correct, Parry said.
"And the residents and city have something that says, 'These are concerns. How are you doing on them?' " he said.
Katie McKay, who lives just four houses away from the street that took the brunt of the Nov. 4 explosion, said her first feeling upon hearing the news that the refinery is shutting down was "utter excitement."
"I'm just excited that someone is finally paying attention to the things that are going on," McKay said.
Those who live near the refinery just want the neighborhood safe so homeowners and the refinery can co-exist, she said.
Lea Peacock, president of the Utah Petroleum Association, said Utah drivers should expect gas prices to increase as a result of the closure.
"I expect it will have some measurable impact on gasoline prices in the state," Peacock said.
The price of crude oil and gasoline are going up nationwide, he said.
Crude oil prices are about $5 more a barrel this year than last. On Friday, benchmark crude for December delivery on the New York Mercantile Exchange closed at $76.35, down 59 cents. Brent crude for December delivery settled at $75.55 on the ICE Futures exchange in London.
Less gasoline being produced locally likely will cause gas prices to increase, especially if it's a long-term closure, Peacock said.
"Certainly it will have an impact on supply," he said, though "Silver Eagle is the smallest of the state's five refineries by quite a bit."
Peacock said it's the first time in his 15 years with the Utah Petroleum Association that he can recall such a closure.
"This is a shock to me," he said.
Closing down a refinery isn't as simple as flicking an "off" switch. It's technical and lengthy, Peacock said.
Although refineries rarely close with government investigations, refineries sometimes have "turnarounds," which are planned closures for routine maintenance, upgrades and expansions, he said.
"Usually, a refinery would do a turnaround once a year," Peacock said. Major turnarounds are scheduled infrequently, "like every three to five years," he said.
Last week's explosion at the Silver Eagle refinery was the second there this year.
A Jan. 12 explosion injured four workers — two employees and two contractors — who were clearing a line with nitrogen gas and bypassed a stabilizing mechanism. The gas forced fumes out of the 440,000-gallon Tank 105, which was nearly full at the time. The fumes ignited in a flash fire, burning the men.
That fire led to widespread evacuations in Woods Cross.
The refinery had been cited for 13 serious safety violations in recent years, including one that was deemed by inspectors to put workers at a high level of risk, according to officials with the U.S. Occupational Safety and Health Administration.
According to the OSHA Web site, the refinery was cited for 10 "serious" violations in 2005, two "serious" violations in 2004 and one in 2002. One of the 2005 violations was assigned a "gravity" rating of 10, meaning it carried the highest possible risk to workers' safety.
Silver Eagle is the smallest refinery in Utah and sells the gasoline and diesel it produces to "jobbers," or middlemen, in the fuel industry who then distribute the fuel to gas stations.
The company employs about 50 people at its Woods Cross facility and about 25 at its Evanston, Wyo., operation.
Contributing: Associated Press
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