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Jun 21, 2004
CONTACT: Jamie Court - 310-392-0522 x327
Regulators Given Internal Shell Documents Showing Refinery Slow Down Leading Up To Labor DaySanta Monica, CA - The Foundation for Taxpayer and Consumer
Rights (FTCR) is handing over internal Shell Oil documents today
to the Federal Trade Commission and the California Attorney
General that show Shell Oil is slowing down production at its
Bakersfield and Martinez refineries for "routine maintenance"
leading up to the busiest driving holiday of the year - a tactic to
reduce supply also used by electricity producers during
California's energy crisis.
A letter from FTCR president and author of "Corporateering" Jamie Court explains to the regulators -- who are both
investigating the closure of Shell's Bakersfield refinery this fall --
the documents "provide incontrovertible evidence the company
has once again misled California about its stated reasons for the
shutdown of Shell's Bakersfield refinery."
Shell has said it was closing the refinery because it was not
profitable, did not have enough crude oil and needed crude oil for
its Martinez facility to the North, but the new documents obtained
from whistleblowers disprove those claims.
The documents -- some of which are available for downloading at
http://www.consumerwatchdog.org/utilities/rp/ -- show:
Profits at Bakersfield are extreme -- $11.4 million in May. Shell
had stated that Bakersfield was closing because it was
economically unviable and anticipated losing money at the
refinery. After being confronted with internal documents showing a
$5 million profit last year, Shell said such profits were not enough.
This year already, according to the enclosed documents, Shell's
profits from the Bakersfield refinery are $24.7 million.
There is no shortage of crude for both refineries, as Shell had
claimed. There is ample crude to keep Bakersfield on line and
Martinez running at maximum capacity. As an example, Shell is
currently supplementing its San Juaquin crude with Ecuadorian
crude at Martinez, leaving an adequate supply for Bakersfield to
stay on line and Martinez to run at full capacity. Any problems in
the future can be handled in the same fashion.
Shell is decreasing utilization during the summer months by
setting its schedule for planned maintenance at both Bakersfield
and Martinez refineries during maximum utilization periods when
California is almost certain to be short on fuel. Cutting back
operations in July and August is a recipe for low inventories, which
lead to higher prices when the commodities market sees a
shortage at a period of peak demand.
"We hope these documents give you the basis to take action
against Shell in the next month. They show that, absent a
regulatory response, Californians are likely to be paying closer to
$3 per gallon at the pump by Labor Day," wrote Court. " The documents also reveal that August is too late for
regulatory action. The time is now. We hope your agencies take
the lead but if you are unable to do so our consumer group is
preparing its own case against Shell to be filed by late July in the
absence of forward movement on this issue. Please keep us
closely informed of your time tables."
For more information on FTCR, Bakersfield and the gasoline crisis,
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