Bakersfield Refinery May Be Idled Indefinitely

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Big West is unable to buy the crude oil to keep the facility running. Job cuts are imminent.

A financially troubled Bakersfield refinery appeared headed for a
prolonged shutdown after management on Wednesday informed workers that
it hadn’t been able to cut a deal with crude oil suppliers to keep the
facility operating.

The plant, owned by Big West of California, has been crippled by
the Dec. 22 bankruptcy filing of its parent, Flying J Inc. of Ogden,
Utah. Management began shutting down operations in late December after
suppliers stiffened credit terms, and it couldn’t come up with cash to
buy inventory.
"We will be winding down operations at the
facility," while negotiations continue with suppliers, Fred Greener,
Big West executive vice president, wrote in a memo to union workers.

That means job cuts are imminent, said Kevin Cable, committee
chairman for the United Steelworkers, which has 140 members working at
the plant with 100 contract employees. Consumer advocates have been
sounding the alarm about the Bakersfield plant, which supplies about 2%
of the state’s gasoline and 6% of its diesel — enough to affect prices
in California, where refining capacity is perpetually tight.

"If this plant shuts down permanently, gas and diesel prices are
going to rise in California," said Judy Dugan, a spokeswoman for
Consumer Watchdog.

The Santa Monica activist group has raised
concerns to state officials that Shell Oil, a major crude supplier to
Big West, may be withholding supply from the refinery. Shell is the
former owner of the Bakersfield refinery and tried to close it several
years ago before being forced by the state to sell it to boost
competition. Christine Gasparac, a spokeswoman for the California
attorney general’s office, confirmed that the agency’s antitrust
section was investigating "whether [Shell] illegally refused to sell
crude to Flying J or shut off pipeline access."

Shell could not be reached for comment.

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Consumer Watchdog
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