Consumer group questions Shell’s decision to close refinery

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Associated Press

SACRAMENTO — A consumer group asked Attorney General Bill Lockyer on Tuesday to investigate whether Shell Oil Products has broken unfair competition laws by planning to close a Bakersfield gasoline refinery while California’s gas prices remain high.

Jamie Court, with the Foundation for Consumer and Taxpayer Rights, said internal company documents his group received show that the Bakersfield refinery was making money for Houston-based Shell Oil Products.

Shell has stated publicly that it’s closing the refinery because it’s too expensive to operate and these documents show that this is the most profitable refinery in the country,” Court said.

The attorney general’s office is already investigating the planned closure of the refinery, which Court said produces about 2 percent of California’s vehicle gasoline and 6 percent of the state’s diesel fuel.

Shutting down one of 13 gasoline refineries in California would cut supply and drive up prices, amounting to unfair business practices, Court said. His organization asked Lockyer to use the state’s Unfair Business Competition Law to force Shell to sell the refinery to a company that will keep it operating or keep running the plant itself.

Shell spokesman Cameron Smyth said the refinery was being closed because the crude oil from the Kern County oil fields is drying up.

“Any assertion that we are closing the refinery to either drive up prices or restrict supply is absolutely false,” Smyth said. “Our refinery has been there for over 70 years. It was built on top of its crude source and there’s just been a decline.”

He said the company is cooperating with the investigation. The refinery is scheduled to close at the end of September. It currently employs about 250 people.

Tom Dresslar, spokesman for Lockyer, said the attorney general hadn’t yet received the letter from Court. Lockyer has an ongoing investigation into the refinery closure, he said, and is examining a number of legal theories, including antitrust violations.

The investigation may find that “at the end of the day, this may not be an issue that can be resolved in the courts,” Dresslar said. “It may take regulators and private parties sitting down together to try to ameliorate any negative impacts on the economy.”

Shell Oil Products:

The California Attorney General:

The Foundation for Taxpayer and Consumer Rights:

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