Keeping California’s Gas Tanks Filled : Southland production is stretched so thin that even minor disruptions can send fuel prices higher.

The gasoline that turned into a fireball and killed three people when a pipeline ruptured in San Bernardino last month was on its way to Las Vegas at the time, outracing the tour buses and hurtling along at 39 gallons a second.

At one of the final stages in the surge of petroleum through Southern California, the gasoline was to cross into Nevada through the 14-inch-diameter pipe to terminals in the gambling mecca.

There it would be pumped into tanker trucks that would deliver it to service stations and hence into the Las Vegas fleet of RVs, limousines and pickup trucks.

Las Vegas and Phoenix, both dependent on refineries in Southern California, are at the tail end of a complex system of supply that has never seemed more tenuous than now--and which has seldom been stretched so tight.

The pipeline explosion, the Alaskan oil spill, and political and economic shifts--including sweeping environmental proposals in Southern California and a relentlessly climbing demand for fuel--have all intensified the debate on how California makes its cars go.

How does it?

With oil dredged up from beneath Alaska’s frozen tundra, California’s own oil patches in Los Angeles and Kern counties and offshore Santa Barbara, and an occasional stray barrel from Ecuador or Saudi Arabia.

It arrives by tanker or pipe and is fed into one of 34 refineries, which turn the crude into gasoline or other products and send it into different pipelines, which carry it to terminals. From there the gasoline--called motor gas, or mogas, in the business--is trucked to 5,200 Southern California service stations, which pump it into nearly 10 million cars.

Near Early Oil Fields

But behind the numbers are decades of controversy, explosive growth, environmental confrontation and other episodes befitting the development of the world’s largest single gasoline market.

Long before Alaskan oil first reached California in 1977, the state was a big exporter of its home-grown crude oil and refined products. The concentration of refineries around Long Beach reflects the proximity to the big oil fields discovered in that area in the 1920s and ‘30s, especially the Wilmington field, third largest ever found in the United States.

Today, about 40% of the 675 million barrels of oil entering California’s refineries annually comes from Alaska in tankers, which deliver it to the ports of Long Beach and San Francisco. Except for a few barrels of low-sulfur Indonesian oil burned on occasion in Southland power generating plants, the rest is Californian: most from the Bakersfield area, the balance from Los Angeles County reservoirs and the offshore Santa Barbara fields.

(The tanker routes up and down the West Coast are about to change as a result of the big Alaskan spill on March 24. Major shippers have agreed to redirect their tankers outside the environmentally and politically sensitive Santa Barbara Channel, scene of a landmark 1969 oil spill that helped give rise to the environmental movement.)

A maze of pipelines then carries the crude from the port at Long Beach and the oil fields of Kern County to the network of about 17 refineries in the Los Angeles area. Most of the lines are owned and exclusively used by individual oil companies.

Ownership of the crude oil is routinely swapped: Barrels from a Kern County field might be traded for oil from Long Beach by two refiners with differing needs. Meanwhile, Kern County’s exceptionally heavy, gooey crudes must be blended with lighter oil from the Elk Hill Naval Petroleum Reserve or the stuff won’t even flow through the pipelines that carry the oil over the Tejon Pass to refineries in Los Angeles.

Feeds Arco’s Stations

No. 1 in this huge retail gasoline market is Atlantic Richfield, whose refinery in Carson is second in capacity to Chevron’s. The Carson refinery turns out about 5 million gallons of gasoline every day, more than one-fourth of Southern California’s daily appetite, though Arco is also a big supplier to Las Vegas and Phoenix.

(Arco’s big Alaskan reserves generate more crude than it can refine. It sends about 50,000 barrels a day of crude to Tosco Corp., whose Bay Area refinery processes it and sends the products back to Arco. The gasoline helps feed Arco’s low-price, high-volume network of service stations that have made the company the biggest gasoline peddler on the West Coast.)

The massive, 640-acre Arco refinery at the corner of Alameda and Sepulveda--built in 1923 by the old Pan American Oil Co.--is a typical assortment of pipes, tanks and boilers using the latest refinements of a technology whose last quantum leap was in the 1960s.

It would cost $2 billion to duplicate the 235,000 barrel-per-day refinery today, says refinery manager Les Smith--if environmental regulators would allow it and anybody were willing to spend that much in today’s volatile oil market and political climate.

“That steam is purer than tap water,” boasts Smith, pointing to the white clouds billowing above the refinery he has been running for four years. Half-joking, he adds: “It helps the humidity in Southern California.”

The Arco plant is equipped to burn exclusively Alaskan crude and turns slightly more than half of it into gasoline. The rest becomes aviation and diesel fuel, heating oil and other products, including a coke byproduct that is sold for use in the making of aluminum.

In a series of steps--starting with simple distillation of crude oil and moving on to the use of palladium and other catalysts in a process called cracking--the Arco plant breaks the oil into eight “streams” of products that are blended into gasoline with exact properties, notably octane. The octane, or “anti-knock” property of a fuel, prevents it from igniting too early under compression and ensures that it burns smoothly in car engines.

More Sophisticated

In the old days, simple distillation of 100 barrels of crude would create about 21 barrels of 55-octane gasoline, good enough for the autos of the time, Smith says. Today’s engines need 87 to 91 octane, and the greater overall demand for gasoline has led to a refining process at the Arco plant that makes more than 50 barrels of gasoline from every 100 barrels of crude.

Under environmental pressure for decades, Southern California refiners operate under tighter restraints than others, both in the manufacturing process and in the gasoline they produce. That and the heavy oil they burn require them to be more sophisticated than other refineries.

The last refineries built in the United States went up in 1971 in Cherry Point, Wash., and Joliet, Ill., according to industry officials. The newest in California is Exxon’s in the Bay Area, erected in 1970. But capacity kept pace with the explosion of the nation’s automotive fleet through expansions and upgradings of refineries to yield more gasoline per crude barrel.

Then, demand abruptly tumbled in the early 1980s after energy prices skyrocketed. Ten small, under-utilized California refineries closed--part of a national trend--taking about 200,000 barrels a day out of state production. As demand revived in the wake of the 1986 price collapse, West Coast refiners have been stretched tight, operating at an estimated 88% of capacity last year, about as high as they can.

It is a system that seems especially unruly and vulnerable to interruptions in oil supply. Philip K. Verleger Jr., oil economist at Charles River Associates in Washington, calculates that nearly 500,000 barrels per day of California refinery production were lost in February and March when up to 10 refineries chose to partly close at the same time for “maintenance” and required seasonal adjustments in the properties of the gasoline they make.

That drove gasoline stocks lower than anyone realized at the time, setting the stage for a mini-panic when the Exxon Valdez ran aground in Alaska.

The panic was heightened, says Verleger, by the chaos created when shippers who rely on the Southland’s single common-carrier gasoline pipeline demanded immediate delivery as a hedge against a prolonged Alaska shutdown. Operating at capacity, the pipeline couldn’t comply.

A subsequent rush to buy gasoline on the spot market triggered the record surge in West Coast wholesale gasoline prices, from 67 cents a gallon to more than $1 in less than a week.

Thus the fact that the world has a surplus of crude oil means little in California. Not only does it have a limited system for making gasoline, but it alsohas no viable pipeline access to Texas or other domestic oil or gasoline sources. Alternatives are two or three weeks away by tanker, and they will steam in this direction only when consumers pay more money.

“We’re like a province,” says James McDonald, a longtime Los Angeles oilman and consultant. “The East Coast and Midwest have all kinds of flexibility and competition. We’re completely isolated.”

Truckers--many independent operators called “jobbers,” others part of the self-contained systems owned by the major oil companies--load up their 8,500-gallon tankers with gasoline at the refinery gate or numerous other terminals around the region. It is at the terminals that special “additives” claimed by marketers to improve the performance of a car’s engine are added to the gasoline.

The tankers then deliver to a rapidly shrinking number of service stations in Southern California, where dealers might pump several times more gasoline each day than they used to and where the so-called majors dominate the market to a greater degree than in other parts of the nation.

A census conducted by the Lundberg Survey, which monitors the gasoline market around the country, found that the number of service stations in Southern California plummeted by 41% to fewer than 5,300 between 1974 and 1988. In the same time span, the number of motor vehicles jumped by 39% to 9.6 million.

The census showed that the fewer stations kept up with the surging demand by adding pumps. But it also showed that service bays at today’s stations are being replaced by convenience stores, making it easier to get a hot dog than an oil change.