Posted on 08/16/2004 4:17:09 PM PDT by snopercod
LOS ANGELES -- Shell Oil Co. has agreed to delay the planned closure of a Southern California oil refinery that produces 2 percent of the state's gasoline to allow more time to find a buyer and negotiate a sale, state officials said Friday.
"I'm extremely pleased with Shell's decision," state Attorney General Bill Lockyer said in a statement. "It's a welcome show of cooperation with our effort to keep open this refinery, which is crucial to helping protect California drivers from even higher gas prices than they already pay."
Lockyer's announcement came after a state-hired consultant questioned Shell's decision to close the Bakersfield refinery. The report, which was prepared for the attorney general's office by a Dallas-based consulting firm, concluded the facility can be run profitably, and that a sale can be structured that is economically viable for both seller and buyer.
Shell President Lynn Laverty Elsenhans agreed to keep the refinery running through March 31 -- six months later than the Oct. 1 planned shutdown date. Elsenhans said the company would continue making a good-faith attempt to sell the facility, Lockyer's statement said.
"What this does is allows the sales process to mature and will provide additional time for Shell to explore a sale with any and all prospective buyers," said spokesman Stan Mays.
Shell officials last November announced their decision to shutter the 72-year-old refinery, citing a decline in oil production in the region and the inefficiency of the aging inland operation. The refinery produces 2 percent of the state's gasoline supply and 6 percent of its diesel fuel.
Experts, however, have said that while oil production is declining at a rate of about 3 percent to 5 percent per year, there are still large amounts of crude oil in Kern County, where output surpasses every state except for Texas and Alaska.
The proposed closure generated outrage among politicians and consumers who argued the dismantling would further squeeze supplies and inflate pump prices for California motorists, who have long paid the highest gasoline prices in the nation.
Jamie Court, a consumer activist with the Foundation for Consumer and Taxpayer Rights, hailed Shell's decision as a "major victory for consumers."
"I don't know of another instance in which an oil refiner has yielded to pressure from legislators and consumers to keep their refinery open," Court said.
U.S. Sen. Barbara Boxer, who had protested the closure, said she would continue to focus on the issue until a "satisfactory conclusion" was reached.
"After months of misleading statements by Shell Oil, I believe we now have proof that Shell had no credible economic reason to abandon this important facility," Boxer said in a statement. "California consumers deserve relief from the economic squeeze they are feeling as a result of skyrocketing gasoline prices."
Shell's ability to keep the refinery operating through March 31 may depend on whether it can obtain a modification of a consent decree over air pollution emissions at the facility.
The attorney general said an ongoing antitrust investigation into Shell's decision to close the refinery will continue, but he also stressed that his office preferred to work cooperatively with the oil company. The Federal Trade Commission also has been investigating the proposed shutdown.
I question the timing of this......
"The purpose of this rule is to limit VOC emissions from leaking components petroleum refineries, gas liquids processing facilities, and chemical plants."
"On and after (12 months after rule adoption date), the operator shall be in full compliance with the requirements of this rule, unless otherwise specified in certain provisions of this rule."
I haven't found what the fines will be yet.
Why dont they spend a couple of bucks and modernize the refinery?
Maybe because it's more than a couple of bucks, and the refinery is losing money. Shell caved here for PR reasons, not for sound economic reasons.
Spend a few million to comply with air quality regs, and then they will change the rules again. Spill a little petroleum from a leaky valve, and get hit with more fines. The place is probably has ample amounts of asbestos.
They'd probably give the place to anyone who could post a sufficient bond to cover future environmental claims.
If CA consumers deserve relief at the pump, Botox Boxer should ease up the stupid environmental laws of California. It isn't worth doing business in California period. BTW, why would Shell close a facility if it were profitable.
The ammount of money involved isn't a few bucks. It's probably 50-100 Million
Yeah, that's right, Babs. Shell wants to close the refinery because it's profitable. It's just their way of protesting high taxes. They figure that, if they make less money, they'll save on taxes.
Are all elected Democrats really this dumb?
The refinery was built for Kern oil, which is getting more expensive to get out of the ground.
Tell Barbara Box you will upfit it for ANWR crude. She will crap her Depends in half a second.
For the same reason you don't spend $200,000 remodeling a home in a deterioriating neighborhood.
It requires continuous monitoring of every piece of pipe, pump, heat exchanger, valve, etc. for emissions. If a component is found to have leaked 5 times in any calendar month, it must be replaced with the "best available technology", regardless of cost.
It requires an entire new "closed vent system" to which all relief valves must be attached...with a monitoring system hooked up to each relief valve to determine if it's leaking.
It requires a ton of new paperwork to be kept on each component in the entire plant.
This Shell plant will not be the last to close down in California.
The modern ones, yes. But unfortunately, you used the word "elected", which shifts the blame to the electorate, doesn't it?
California wants gasoline, but no refineries. Electricity, but no power plants. Lunch, but not paying for it.
Under the new rule, components must be inspected every 24 hours visually, and once every 3 months with a hydrocarbon detection meter.
I can't even guess how many components that entails. Probably thousands.
Another issue is that this refinery sits smack dab in the middle of the housing boom going on in Bakersfield. There are mega shopping centers and housing communities springing up all around it. There is no way this refinery could ever meet the emission requirements.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.