USNewsWires.com: Regulators Given Internal Shell Documents: "provide incontrovertible evidence the company has once again misled California…”
Posted 22 June 04
Regulators Given Internal Shell Documents Showing Refinery Slow Down Leading Up to Labor Day; Huge Profits Reported At Bakersfield Refinery Slated For Closure
SANTA MONICA, Calif., June 21 /U.S. Newswire/ - 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 Jamie Court and FTCR petroleum consultant Tim Hamilton explain 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 and Hamilton. " 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."
Contact: Jamie Court, 310-392-0522 ext. 327, Tim Hamilton, 360-495-4951, both of the Foundation for Taxpayer and Consumer Rights
For more information on FTCR, Bakersfield and the gasoline crisis, visit http://www.consumerwatchdog.org/utilities/.
http://releases.usnewswire.com/GetRelease.asp?id=116-06212004
/© 2004 U.S. Newswire 202-347-2770/