-- A barge unloading 4 million gallons of unleaded gasoline exploded and caught fire at a Staten Island oil storage terminal this morning, sending plumes of smoke 15 miles into the air and terrifying residents already jittery about a heightened terrorism alert.
New York Mayor Michael R. Bloomberg and other officials said the explosion, which killed two workers and seriously injured another, appeared to be an accident.
"There is absolutely no reason at this moment to believe that this is anything other than a very tragic accident," Bloomberg said this afternoon. "Every bit of evidence says that it's an industrial accident."
At 10:10 a.m., however, when the barge burst into flames, residents of Staten Island's Woodrow neighborhood, a largely Italian American enclave two miles from the blast, feared the worst.
Tom Petrizzo, 64, a retired insurance executive, was working on his car when he heard the explosion.
"I ran like a son of a gun back inside, and the house shook like nothing else I've ever felt," he said. "Windows rattled, mirrors fell off the wall. Then I looked out again, and all of a sudden the flames were unbelievable. . . . I knew the refinery was down there. I thought terrorists had hit a barge or something. That or a huge plane crash."
Across Woodrow, a middle-class neighborhood that is home to many police officers and firefighters and their families, stunned witnesses told similar stories. Nearly everyone assumed that the long-feared terrorist attack had come. Many worried that dangerous chemicals were billowing into the air.
Petrizzo said his panicked neighbors piled into cars to try to escape, despite radio reports suggesting that they should seal themselves in their homes. "Everyone thought there was toxic gas. It was chaos," he said.
"Our front door flew open. My granddaughter fell out of bed. Pictures fell from the walls. I saw the huge plume of smoke and thought, 'My God, we are under attack,' " said Minnie Sansone, a retired grandmother whose house sits atop a ridge overlooking the storage terminal.
While the view from Manhattan's financial district suggested a massive blaze, the fire was largely confined to the single barge, owned by Bouchard Transportation Co., and to the very edge of the Port Mobil facility where it had been unloading.
ExxonMobil, which owns the terminal, said that the bodies of two barge workers had been recovered and that the injured man was an ExxonMobil employee working on shore. New York city emergency officials said they could confirm only one death.
"We are greatly saddened by the injuries and loss of life, and extend our deepest sympathy to the families," said Hank Muller, manager of the Port Mobil terminal. "We deeply regret the occurrence of this spill and the inconvenience it may have caused local residents."
The blaze was contained by 1 p.m., and the bridges that had been closed to all but emergency traffic were reopened by mid-afternoon. But the still-burning barge remained partially submerged, and the Coast Guard kept the Arthur Kill Waterway, between Staten Island and New Jersey, closed to most shipping.
A Coast Guard hazardous-materials team was deployed from North Carolina, and the New York Department of Environmental Protection was monitoring the air quality on site and downwind, officials said.
The incident briefly sent the stock market plunging, but the Dow Jones industrial average soon recovered and closed up slightly more than 100 points.
"When I heard the news, I knew there would be a sell-off," said Patrick Boyle, head financial trader for Credit Suisse First Boston. "For 20 minutes, the buyers all walked away. Once we realized that it was a refinery fire, the buyers all came back."
Anxious commodity traders in New York also reacted instantly to the first reports of the explosion, jerking wholesale prices of gasoline up by nearly 5 percent, to nearly $1.02 a gallon around midday yesterday. Prices closed slightly lower at the end of the day.
"It shows you how nervous this market is," said trading analyst Peter Beutel, president of Cameron Hanover Inc. of New Canaan, Conn.
Wholesale gasoline prices have soared by 40 percent from low levels a year ago, reflecting a sharp increase in crude oil prices as a possible conflict with Iraq has drawn nearer. These trading prices soon show up as higher pump prices at service stations.
Bloomberg said that about half of the barge's cargo of 100,000 barrels was still on board when it exploded -- a relatively small amount compared with the East Coast inventory of about 60 million barrels, according to John Felmy, policy director of the American Petroleum Institute.
Gasoline deliveries may be disrupted temporarily in the New York Harbor's crowded oil storage facilities, but the impact of the explosion on gasoline prices should be temporary, Felmy said.
"Normally, we would not get that reaction from a barge fire," Beutel said. But energy traders are anxiously waiting for a resolution of the Iraq crisis, and prices have been approaching or reaching new highs every day.
It is not clear whether the fire started on the barge or right next to it on the shore, said Coast Guard Cmdr. James McPherson. The 39 storage tanks in the 203-acre terminal were never in danger of catching on fire, officials said. A second barge, carrying 8,000 barrels of an unspecified fuel, was towed away from the flames by several tugboats. About 30 people were working at the facility at the time of the fire, city officials said
Port Mobil has had environmental problems in the past. In 2001, ExxonMobil paid $11.2 million to settle federal allegations that facility workers had illegally dumped hazardous waste into two open-air ponds, producing benzene levels 20 times the legal limit.
As the fire smoldered yesterday, neighbors seemed relieved that the day's events, although tragic, had not been as devastating as they had feared.
Berkeley College freshman Mike Finnegan was in his basement. "The walls started shaking and I thought we'd been hit by a bomb. I thought maybe the North Koreans had decided to fire off one of their missiles that can reach over here," said Finnegan, 18, standing in slushy snow about two miles from the burning barge.
But not everyone on Staten Island feared the worst. Randy Ursini, 46, said the black smoke had tipped him off.
"I knew the refinery was down there, so when I saw the black smoke I knew it must have been a fire down there," he said. "My second thought was terrorism, but I didn't really think it was that. Why would they hit Staten Island?"
Staff writer Peter Behr contributed to this report from Washington.