Gas prices to rise in Colorado after Suncor begins months-long shutdown of its Commerce City oil refinery

Motorists in Colorado should get ready to pay more at the pump after Suncor Energy announced this week it would shut down its Commerce City oil refinery for as long as three months due to equipment being damaged at the sprawling facility by last week’s “extreme and record-setting weather.”

Grier Bailey, executive director of the Colorado Wyoming Petroleum Marketers Association and the Colorado Convenience Store Association, said “prices will be abnormally high in the next six to eight weeks” in Colorado as the 35% to 40% of the state’s gas and diesel market that is supplied by Suncor goes suddenly dry.

“It’s not a cause for panic but I wouldn’t be surprised if there were more of those yellow bags on gas pumps,” Bailey said. “This is a big supply disruption for a large percentage of the market.”

Motorists, he said, will start to see the impacts of the shutdown at Colorado gas stations “within a week,” though most of the price effects will be felt closer to the Front Range. He did not project how much of an increase per gallon motorists may see.

The average pump price in Denver on Thursday was about $2.70 a gallon, according to GasBuddy.

Suncor is the only oil and gas refinery in Colorado and processes about 98,000 barrels of oil a day. It also manufactures most of the asphalt used to pave Colorado’s roads and provides jet fuel to the market. The company says that 95% of what it produces in Commerce City stays in Colorado.

Skyler McKinley, spokesman for Colorado AAA, said Colorado drivers will experience a “shock to the system” for the next couple of months. He doesn’t expect there to be fuel shortages, although individual gas stations might have to close for a day or two while waiting for fuel.

“It’s going to be frustrating to motorists in the near term, especially when we’ve had every reason to expect declining gas prices,” McKinley said.

Bailey said he has never seen a closure of the Commerce City refinery last this long over the past couple of decades he has studied the market. He holds out hope that gasoline suppliers in other states might be able to fill in some of the shortage Colorado will be experiencing over the next couple of months.

Calgary, Canada-based Suncor said it hopes to have the plant back up and running by late in the first quarter of 2023, which means the closure could last as long as three months.

“Consistent with our operational excellence and safe operating practice, on Dec. 24 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 said in a press release this week. “The inspection and repair of the damaged equipment is ongoing.”

The company declined to provide any more information about the shutdown on Thursday when contacted by The Denver Post. It did not go into further detail as to what equipment was affected by the cold snap and how badly it was damaged.

The decision to close follows a release of harmful pollutants at Suncor a week ago after the extreme cold triggered a shutdown across the plant’s operations. The excess emissions included hydrogen sulfide, sulfur dioxide, opacity and visible emissions, according to the Colorado Department of Public Health and Environment.

Metro Denver saw some of its coldest temperatures in decades on Dec. 21 and Dec. 22, when the thermometer didn’t break zero degrees as a high temperature for hours on end.

On Christmas Eve, two Suncor employees were transported to a hospital with burns after a fire broke out at the refinery due to a vapor release. And then, on Tuesday, another fire broke out at Plant 2 as workers were shutting it down.

The company said the fire was extinguished and no one was hurt. It also said that data gathered by air monitors around the refinery “did not indicate any acute public health concerns.”

“Specifically, concentrations for all compounds measured remained below acute health guideline values before, during and immediately following the event,” the company said in an email.

The Commerce City facility is the largest single source of air pollution in the state and is under intense scrutiny because of multiple air pollution violations. In 2020, the company agreed to a $9 million settlement with the state for its violations, and that settlement included more community air monitoring.

Last summer, Suncor installed new automated shutdown systems inside two gasoline-producing plants at its Commerce City refinery to prevent a repeat of a 2019 malfunction that blasted a clay-like substance into the surrounding neighborhood.

Bailey said the plant needs to “get back online in the safest way possible.” But he said the shutdown highlights the importance of the refinery to Colorado consumers and the state’s economy.

“People like to take shots at Suncor in Commerce City,” he said. “It’s important to realize that they provide a pretty essential product and a pretty essential service.”

Staff writer Judith Kohler contributed to this report