Benicia police initially issued an evacuation order for "any business/structure" downwind of the refinery at 7:49 a.m. via Twitter.
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Then at 8:19 a.m., the police Twitter account said "all other areas of town shelter in place. Keep doors and windows closed. Bring pets inside."
After nearly an hour, the city issued a statement attempting to clarify that the shelter-in-place order did not apply to residential areas.
"There are no shelter in place or evacuation restrictions for residents," city officials said at about 9:20 a.m.
Currently, only the Benicia Industrial Park remains evacuated and the shelter-in-place order is only in effect for students at the Robert Semple elementary school. The shelter-in-place order for Matthew Turner elementary was lifted around 1 p.m.
At about 6:40 a.m., the refinery lost power for about 18 minutes, which resulted in flaring and the release of large plumes of smoke, according to a PG&E spokeswoman.
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PG&E crews are still investigating the cause of the outage but it appears to have happened during routine switching of an electrical transmission system, according to PG&E spokeswoman Deanna Contreras.
The Benicia Unified School District told parents Friday morning that if they choose to keep their children at home, they won't be marked absent.
The flaring also resulted in the closure of a portion of Interstate Highway 680 in Benicia, according to the California Highway Patrol.
Northbound traffic was diverted onto westbound Interstate Highway 780 and southbound traffic was diverted to Lake Herman Road.
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The diversions were lifted at about 9 a.m., CHP officials said.
Crews with the Bay Area Air Quality Management District are at the refinery monitoring the flaring, according to district spokesman Tom Flannigan.
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"When this happens the refineries are required to notify the air district, which they did, then they are required to monitor the volume and combustion of gases that are burned in the flares," Flannigan said. "They are accountable for what they're flaring."
The flaring, which produces dramatic flames and black smoke from large smokestacks inside the refinery, is a safety measure designed to burn off pollutants during an incident like a power failure at the facility, Flannigan said.
"It doesn't happen that often, but we understand that for the people in Benicia that when it happens, it's alarming," Flannigan said.
The winds this morning in the area are blowing at about 21 miles per hour from roughly west to east and "there is no reason to believe that residents outside of Benicia are in danger," Benicia police said in a written statement.
Flaring at Valero refinery triggers evacuations in Benicia