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    Premcor Could Restart Blue Island Refinery

    A fire at a Citgo plant in Lemont, Ill. is threatening to send Midwest fuel prices surging.

    Premcor Inc.'s shuttered Blue Island, Illinois, refinery is intact enough to be restarted in the case of a severe Midwest supply emergency, though finding skilled operators could be a challenge, a company source told Reuters.

    "The refinery, for the most part, is all there," the source said. "The problem would be getting skilled operators back to run it. The majority of them were let go when the plant was shutdown."

    The 80,000 barrel per day plant was shut last winter due to the cost of necessary upgrades, though talk has surfaced in the oil markets that the refinery could be restarted to compensate for a supply shortfall caused by Citgo's outage at its refinery in Lemont.

    Citgo expects its 160,000 bpd refinery, damaged by fire Aug. 14, to remain out of service for up to six months, triggering a spike in cash prices for gasoline and diesel, and catching the attention of the White House due to supply fears.

    A government source told Reuters Friday that the EPA may ease rules in the Midwest as early as next week so the region's refineries can raise output to ensure healthy supplies for drivers and farmers ahead of the autumn harvest.

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