TheBakersfieldChannel.com: Shell Has No Plans To Cover Refinery's Loss
KERO Interviews Refinery Manager
Posted 12 May 04
BAKERSFIELD, Calif. -- As the closing date approaches, the controversy surrounding the closure of the Shell Refinery on Rosedale Highway continues to heat up, KERO reported.
Consumer Reporter Heidi Carter sat down with the refinery manager, who said the Bakersfield refinery isn't efficient enough to keep open, even though it's making a profit.
Amir Farid said the Rosedale refinery isn't as efficient as Shell's two other California refineries, which is why Shell will close it down at the end of September.
"This refinery is two separate refineries that have been stitched together over time," Farid said. "You also have simply the economy of scale. This is a 70,000-barrel-a-day refinery. Martinez is currently 145,000 and can produce up to 160,000 (barrels a day.)"
Farid said the refinery closing has nothing to do with the current price spikes for gasoline. But the current market is making the refinery profitable.
"Clearly, in the environment today, we are profitable at the moment, but this is a cyclical business," Farid told KERO.
Farid admitted Shell has no current plans to make up for the total loss of supply that will occur when the plant closes.
"There is going to be a gasoline shortfall that we are still working on and potentially can offset some of that from our refinery up in the northwest," Farid said.
Shell only has the capacity to make up about half of the diesel production that will be lost.
Jamie Court, the president of the Foundation for Taxpayer and Consumer Rights, said that closing the refinery is about shorting the market and ultimately keeping gas prices above $2.
Farid said in spite of the current profits, the refinery has a history of losing money.
Court said Shell should put the refinery up for sale, rather than short California consumers by closing it down.
While Shell has not put the refinery up for sale, they have received 14 inquires from companies interested in buying it, but so far no offers have been made.