Attorney General Bill Lockyer hired a petroleum industry consultant Wednesday to assess Shell Oil Co.’s claim it has not been able to sell it’s refinery in Bakersfield.
Shell plans to close the aged refinery in October if it isn’t sold.
With gasoline at a record $2.37 a gallon in California (and a record $2.29 in Sacramento), economists have said the refinery’s closure would force prices even higher. The refinery makes only 2 percent of California’s gas and 6 percent of its diesel, but the market is so tight that any loss of supply could have substantial impact on prices, economists say.
On Wednesday, Lockyer hired Dallas-based Turner Mason & Co., a consulting firm that works on mergers and acquisitions and other issues for the petroleum industry. Turner Mason’s job will be “to determine if what Shell is saying is true, that (the refinery) is not viable,” said Lockyer’s spokesman, Tom Dresslar.
If it’s determined the plant can be sold, Turner Mason will try to find a buyer, Dresslar said.
The firm is being paid $35,000 through July 31. Under pressure from elected officials, Shell has put the plant up for sale. It said it has received 14 inquiries, but no offers.
Shell spokesman David Harrington said it would cooperate with Turner Mason.
The consultant can look through the refinery’s financial information if it signs a confidentiality agreement, Harrington said.
Malcolm Turner, the consulting firm president, couldn’t be reached for comment.
Documents unearthed by a consumer advocate group, the Foundation for Taxpayer & Consumer Rights, show the plant made money four of the past six years. But Shell says the long-term outlook is bleak, in part because of the declining availability of crude oil around Bakersfield.
Jamie Court, the foundation president, called the consultant’s hiring “the first real break we’ve had.”
Meanwhile, Gov. Arnold Schwarzenegger announced a campaign to get Californians to conserve gas. The campaign urges decreasing the use of car air conditioners, properly inflating tires and observing speed limits.
Court called the campaign inadequate. The high price of fuel “isn’t a problem with demand; it’s a problem with minimal supply,” he said.