Posted on 04/09/2004 10:43:56 PM PDT by NormsRevenge
Demands that the Shell Bakersfield Refinery remain open intensified Friday, as Sen. Barbara Boxer joined a chorus of calls to the Federal Trade Commission and California Attorney General Bill Lockyer to prevent the closure. "The plant must remain open until a buyer is found and a sale is completed. Otherwise, consumers will pay the prices," Boxer wrote in a letter to FTC Chairman Timothy Muris.
Boxer's letter caps a week that has seen a wide array of critics of the proposed closure emerge. Also this week, the FTC announced it is evaluating the situation, and the state Attorney General's office -- albeit falling short of a demand that the refinery not close -- said it will do everything in its power to keep prices under control.
Industry experts have said the refinery's closure will likely result in higher gasoline and diesel prices on the West Coast, as well as the loss of 250 full-time jobs and an additional 150 contractors.
A chink in Shell's insistence that it will demolish the plant also appeared this week. Although Shell insisted no buyer would want the plant when it announced in November it would shutter it and tear it down, Lynn Elsenhans, president of Shell Oil Products U.S., said Tuesday that it is for sale.
"Since so many people have questioned if the refinery is for sale, I want to make it clear that it is, and to state unequivocally that we are willing to sit down with any credible buyers to discuss such a deal," he said in a statement.
"I urge you to do more than merely welcome discussions," Boxer wrote Elsenhans on Friday. "I urge you to actively seek a purchaser for the Bakersfield refinery."
The logical buyer for the Bakersfield refinery would be ChevronTexaco, which runs the adjacent Kern River oil field. The refinery grew up sipping Kern River heavy crude, and was owned over the years by successive companies with major holdings in Kern River.
The last of those was Texaco, which merged its West Coast refining and marketing operations with Shell's in the late 1990s.
When Texaco was bought by Chevron in 2001, the state Attorney General's office forced the merged company to sell off its interests in its jointly held refineries, including the Bakersfield plant.
That means ChevronTexaco can't buy the refinery unless a modification of the deal it negotiated with the attorney general is reached.
After the merger, ChevronTexaco also ended up with virtually the entire Kern River oil field.
Asked Friday, ChevronTexaco spokesman Ed Spaulding said the company already owns two large California refineries, one in Los Angeles and the other in the Bay area, and likely didn't need the Bakersfield plant.
Boxer urged Elsenhans to postpone the refinery's closure and demolition to allow time for a buyer to be found. That's not likely, a Shell spokesman said.
"Our decision is still to close the refinery on Sept. 30," spokesman Cameron Smyth responded.
Sen. Dianne Feinstein will join her fellow Democrat and send a similar letter to Shell next week, Feinstein's office said.
Shell officials have repeatedly said they are closing the Rosedale Highway refinery because of declining supplies of heavy crude oil in the San Joaquin Valley.
The Shell refinery is one of 13 refineries in the state, three of which the company owns.
The refinery also produces 7 percent of the state's diesel supply.
Boxer said that leads her to believe "there's some desire here to lessen the supply. And having gone through the electricity crisis in California, where manipulation of supply is what caused our crisis, I'm bound and determined to to do everything I can not to allow 2 percent of the (gasoline) supply to disappear because Shell will do better if there's less supply."
Smyth said any suggestion that Shell is closing the refinery to drive up prices or restrict supply is not true.
In her letter to FTC Chairman Muris, Boxer said she was joining Sen. Ron Wyden of Oregon in asking the commission to re-examine recent mergers in the gasoline industry in order to determine if the refinery's closure has anti-competitive implications.
Wyden sent Muris a letter in February and another in March.
Muris responded on Tuesday.
"The issues that you have raised are very important to this agency and will be seriously considered as the agency evaluates the situation with respect to the Bakersfield refinery and determines what course of action, if any, may be warranted."
"I urge you to use all legal courses of action to block closure of the refinery," Boxer wrote Lockyer.
A spokesman for Lockyer said the attorney general is doing just that.
Earlier this week, a consumer rights group based in Los Angeles called on Lockyer to force Shell to keep the refinery open or sell the plant.
A Leftist fighting to keep a refinery open.
I'll look for the sun to rise in the west tomorrow.
Two of the state's 13 refineries unexpectedly went offline last month, and another handful had to curtail production because of malfunctions during scheduled maintenance(That happens when they NEED TO BE REPAIRED - DUH!).
"Over the past several decades, some 29 state and federal government investigations of the industry have been conducted, and no evidence of wrongdoing has been found."
Earlier this year, Governor Arnold Schwarzenegger sought a waiver from the Environmental Protection Agency to exempt the state from federal mandates requiring ethanol additives, which add about a dime to the state's gas prices.
Yet no one seems to mind paying $2 for a bottle of water.
Yes. And I don't think that Shell, or CA, or the feds should waste the stockholders or taxpayers dollars on the clean up. The environmentalists can clean up the MTBE mess. They caused it with their "posited law" view of progress. Now natural law is imposing its ultimate legal authority.
Environmentalism pollutes the future.
*****
Drilling in ANWR...
All of these new technniques have enabled oil and gas producers to develop new oil reserves on the North Slope for less than $2.50 a barrel. By lowering the finding costs of new oil, North Slope producers have been able to compensate for other costs, such as transportation, that rise because overall production from the North Slope is falling.
Ya Know, the thought of Lockyer being governor scares me just as much as Bustamante.
It's the closing date just prior to her re-election bid that's getting her.
That, plus she knows that there is no way that she can get her own backers to agree to permit a new plant (or permit new drilling offshore that would make this plant profitable again). Her only option left is to *force* this plant to stay open no matter how much money it loses.
Are we taking bets yet on Boxer suggesting that California or the federal government buy and run this refinery?!
Hey, don't you know that gasoline comes from the gas pump, and electricity comes from the wall socket?
You mean use the federal courts to injunct the refinerys shut down. That's totalitarian.
With your investor's and shareholder's money, it is not enouogh just to turn a profit. You have to provide a competative rate of return. The the company formerly known as Standard Oil of California (Chevron) bets the family farm on Kazakhstan rather than California, you have to know the jig is up.
Actually, Gray Davis, who during his time in California government (as State Controller, Lt. Governor, and Governor) had a major role in the three-member State Lands Commission. He, more than anybody, was responsible for the drilling moratorium in California State waters. As for the Federal offshore, Ms. Boxer and Ms. Feinstein, and Mr. Cranston before them, played pivotal roles in the Federal offshore moratoria.
The San Joaquin basin crude oil tends to be asphaltic, sulphurous, and heavy (viscous). Refineries have to be designed to handle this type of crude oil (feedstock). The Santa Maria basin, offshore and onshore, have a similar type of oil. One problem is that the infrastructure is becoming old and dated. No one is going to invest in upgrades, not to mention new refineries, if they can not be guaranteed a steady source of crude oil.
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