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California Fuel Tank Fire Contained and Shipments Halted

Robert Tuttle and Jeffrey Bair

(Bloomberg) -- A fire at a San Francisco-area fuel terminal is contained after spewing black smoke high in the air, snarling rush-hour traffic and prompting officials to ask residents to take shelter.

Authorities are working to assess any health threat from the fire that affected two tanks at NuStar Energy LP’s Selby Terminal in Crockett, about 25 miles (40 kilometers) northeast of San Francisco, the Contra Costa Country fire department said on Twitter. The tanks held “very low volumes of ethanol” comprising less than 1% of their capacity, NuStar said.

All operations have been suspended, and product shipments in and out of the facility are halted. All personnel are safe, the company said.

NuStar’s shares fell 0.8% to $28.11 at 2:59 p.m. in New York on Wednesday.

An order for residents to remain indoors has been lifted for all affected areas near the NuStar facility, the Contra Costa County Health Department said in a tweet. Since there is no longer any imminent danger to the public, a section of Interstate 80 near the terminal that had been closed in both directions has now re-opened, the California Highway Patrol said in a tweet.

The blaze came less than a day after an earthquake forced Marathon Petroleum Corp. to shut units at its nearby Martinez refinery, threatening to push up gasoline prices that had just eased from the highest level in seven years. Disruptions at California refineries sent retail pump prices in the state well above $4 a gallon.

The fire involved two tanks. Three others, holding ethanol and jet fuel, were checked for structural damage, found to be sound and then were vented, Steve Hill, a spokesman for the Contra Costa Fire Protection District, said at a televised news conference on Wednesday.

Hill said new, smaller tanks were delivered by NuStar to collect a combination of waste ethanol, water and up to 15,000 gallons of fire-retardant foam from ponds near the burned tanks. He also said the small amount of product in storage had benefited the firefighting effort.

"We have dodged some bullets in the last 24 hours," Hill said. "Yes, those tanks were almost empty, but that also means they had extra amounts of oxygen inside."

Hill said alternate piping was being installed to replace damaged equipment and reconnect the terminal to Northern California oil supply. He said a terminal contractor was briefly trapped in a nearby culvert Tuesday night before he was rescued.

The two burned tanks contained a combined 250,000 gallons of ethanol. The blaze had spread to 15 acres of nearby vegetation. Between 12 and 20 nearby residents were evacuated.

The incident comes a week after the state’s utility PG&E Corp. shut power to 738,000 homes and businesses to prevent wildfires similar to those that devastated the state last year, causing dozens of fatalities.

Phillips 66, whose Rodeo refinery is less than a mile away, has not been impacted, Dennis Nuss, a company spokesman, said Wednesday.

NuStar operates about 9,800 miles of pipeline and 74 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids. Its San Francisco-area facility has a capacity of about 3 million barrels of gasoline, diesel, jet fuel and ethanol, according to the company’s website.

(Updates fourth paragraph with share price, seventh paragraph onward with details on the incident.)

--With assistance from Ann Koh, Natnicha Chuwiruch, Bill Lehane and Brian Eckhouse.

To contact the reporters on this story: Robert Tuttle in Calgary at rtuttle@bloomberg.net;Jeffrey Bair in Houston at jbair4@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Jessica Summers, Mike Jeffers

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