Shell to Cut Summer Output at Bakersfield Refinery, Papers Say

[nothingshocksmeanymore]

Shell Oil Co. plans to put the brakes on production at its Bakersfield refinery in July and August, potentially shorting California's fuel supplies during the summertime driving season, according to internal Shell documents.

The planned cutback is the latest development in the controversy over the refinery, which can process up to 70,000 barrels a day of crude oil and makes about 2% of California's gasoline supply and 6% of its diesel. Shell has said it will close the facility Oct. 1 in a move that experts predict will boost pump prices by worsening the chronic imbalance between supply and demand in the state

The internal documents obtained by The Times, including a refinery output forecast, indicate that Bakersfield will soon be producing far less than its capacity. After relatively high output rates in May and early June, Shell plans to cut crude oil processing about 6% in July and another 6% in August, according to the forecast.

Those two months are when California's fuel demand reaches annual peak levels.

Aamir Farid, general manager of Shell's refineries in Bakersfield and Martinez, said he couldn't confirm that there was a production slowdown in the works.

Los Angeles Times, free registration required

I guess having refineries explode during peak travel times was getting old and with the current admin, they can do as they please...no need for spectacular reasons to take a refinery out during peak travel times to raise prices.

[mbperrin]

1. Yep, gas prices have abated about a penny - time to JACK

IT UP!

Get ready, granny Millie!

[denverbill]

2. Can you say 'monopoly'? I thought you could.

It's pretty pathetic when a tiny handful of oil companies can use monopolistic actions like this to control gas prices in the US.

And amazingly enough, conservatives will take up their battle cry that it's 'environazis' causing the problem.

It used to be that collusion and price-fixing were illegal. Now they are SOP.

[mike_c]

3. they must have hired some of those unemployed former...

...Enron energy traders who honed that technique in 2000. Reduce production capacity..., yeah, that's the ticket!

[Massacure]

4. Well this is bad news for Bush.

Now California will have to purchase gas from Oregon, Arizona, or Nevada. Two of which (Oregon, and Arizona) Bush is campaigning hard in!

[Trillo]

15. I believe that California, or some areas within California

require extra clean burning gasolines. Is gasoline from those states you mentioned of this specialized variety?

[seventhson]

5. mea culpa

last week I posted boycott exxon/buy shell

but I take it all back

I will STILL buy shell over exxon/mobil but the buy shell thing I posted was now, I see, my stupid fall for tripe in the media

Boycott Exxon/Mobil and Bike/walk!

[nothingshocksmeanymore]

6. The poster AP has a link on his sig line

to buy Amoco IIRC..it explains why ...maybe that's the alternative :shrug:

[AndyTiedye]

13. What Amoco?

No Amoco in California or New England any more, is there any anywhere?
I used to like them because they had unleaded gas before anyone else did,
but I thought Amoco had been mergered out of existance now.

[Fovea]

12. Boycott Exxon/Mobil and Bike/walk

Thank you.

Here is where I have to beg one more time that if people want to protest getting screwed, you can't choose a white hat and boycott the rest. There were no white hats in 1973 and there are none now.

7th son has it right on the mark. Use less oil. That by itself will not bring the oligarchs down, but it will hurt them with their investors.
To quote Carrol's White Knight, "The question is, which is to be master?" Bush/Cheney had two inflexible mandates in the beginning--
Destroy the information economy and move energy to the forefront of the economy/policy queue. THey have wildly succeeded. Notice that we are not exporting oil jobs? Why arent Iraqis rebuilding Iraq?

What to do?

1. The oligarchs also heat your home. Make your next one as thermally efficient as humanly possible. Think earth contact or thermal mass construction.

2. If you have some land, set up a windmill or two and/or a solar water heater. Sell excess energy back to the grid.

3. Ride your bike, dammit! Make your goal to substitute 5 trips a week with your bike instead of a car.

4. It's called public transport, and it takes money away from Terrorists, and their Sugar Sultans.

[AndyTiedye]

17. We Do What We Can

> 1. The oligarchs also heat your home.

I've got a woodstove.

> 2. If you have some land, set up a windmill or two and/or a solar
> water heater. Sell excess energy back to the grid.

Solar isn't working well here, we're too deep in the forest.
I'm looking into a windmill though. Wouldn't get enough power to
sell back, might just try powering part of the house with it.

> 3. Ride your bike, dammit! Make your goal to substitute 5 trips a week
> with your bike instead of a car.

I don't even make 5 trips in the car some weeks. Telecommuting rocks!

I don't think I could drag five bags of groceries plus cast food and
kitty litter up the mountain on my bicycle though. If I have to do
it sans oil, I'll get a horse.

> 4. It's called public transport, and it takes money away from
> Terrorists, and their Sugar Sultans.

and where is it? Conspicuous by its absense in most places,
being cut back in others. BART and Caltrain have improved their
service lately (rare exceptions to the rule operating off of funding
secured years before), but their reach is limited, and connections
with each other and other transit services are terrible. Even if I
lived next to the train station, it would take 1 1/2 hours to get
to work on the train and the light rail. An hour of that is the
light rail, which is actually slower than bicycling would be, if
bikes didn't have to take such a circuitous route to cross the freeway.

and most of the USA has even worse public transport than this.

I support massive improvements in our public transport,
for all the obvious reasons.

[Tempest]

7. 250 layoffs in refinery closing

I live in Bakersfield and this is a big issue.

Boxer has asked Shell to sell the plant, but Shell said they received no offers.

Boxer unearthed documents showing Shell had 23 offers to buy the plant.

Shell then came out and said none of the offers were legitimate.

Shell is the only refinery in the area which is cutting back on production. All the other refineries are running at capacity.

This is a direct result of Bush allowing unchecked mergers in the oil industry.

[sjgman9]

8. Fucking Brilliant

Supply and demand... Cut supply, oil prices increase, customers pay more, profits go up


We need to regulate the oil industry more so this shit doesnt happen. Also, we should build more refineries

[Merlin]

9. You have hit upon the economists definition of monopolistic behavior.

(In this case it's oligopolistic -- multiple companies sharing a market operating like a monopoly)

Monopolies cut production and raise prices. That's what they do. It's human nature. It's greed.

[BrotherBuzz]

10. Hot gas

HOT GAS
by Dennis Romero

Shell Oil Co. officials don't deny that their Bakersfield refinery is the corporation's most profitable gas maker on the West Coast this year. Nor do they deny that recently released first-quarter numbers showsolid if not record profits for them. So why are they closing the Bakersfield plant this fall or possibly sooner? They say it's about money and avoiding federally mandated upgrades for the aging refinery that could cost tens of millions of dollars. But critics say when all is said and done, the real issue is pump prices and profits. One less refinery means less supply, higher consumer costs, and bigger earnings for a shrinking number of refineries. now at 13, in the Golden State.

This is the tightest gas market in history, and it's the best performing refinery on the West Coast for Shell, argues Jamie Court, president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights. “In a tight market, you don’t close a refinery. And they are, and it drives up the cost of the product. Why would you want to sell something you’re making money off? It's clearly going to drive the price of gas up on the entire West Coast.

In a revolt against the Bush admi takeovers and mergers worth $19.5 billion have been approved under President Bush’s tenure), there is a movement afoot to challenge the Bakersfield closure based on antitrust objections. Critics say already consolidated West Coast fuel market. As the last gallon of petrol drips from the Central Valley complex, after a spring and summer of the highest gas bills in the nation, Californians will end up paying even more than the rest of the nation to fill'er up.

U.S. Sen. Barbara Boxer, the California Democrat who's running for reelection this fall, has made an issue of the closure, accusing Shell of accelerating the refinery's demise from October to August to duck antitrust inquiries by state Attorney General Bill Lockyer and the Federal Trade Commission. The company denies this.
<more>

http://lacitybeat.com/article.php?id=958&IssueNum=52

[Doctor Smith]

11. 6% of 2% shouldn't have much effect.

[TahitiNut]

16. California already has the lowest per capita energy use in the country.

Despite a dependence on automobiles and air conditioning (in SoCal), Californians are generally extraordinary in conservation.

[BrotherBuzz]

20. Hmmm, isn't that what the energy boys thought....

when they jigged the California natural gas market in 2001? "Shouldn't have much effect"? Boy, I remember it got out of hand and escalated real fast with a small market change because California energy supply was pared to the bone already.

[gasperc]

14. need excuse to justify another massive tax break

to build a new facility in a "lower cost labor market"

[peterh]

18. My morning is being consumed by Shell….

The California spot market is racing to the upside with this latest refinery hiccup….btw, the prices you see are ex-tax and assorted other fees….currently the Bakersfield slowdown is only an undercurrent in the spot market that should reach the surface in trading next month….imo…



DJ Gasoline Soars On Cat Cracker Outage At Shell Martinez

LOS ANGELES (Dow Jones)--A 67,000-barrel-a-day fluid catalytic cracker at
Shell's (RC,SC) 165,000-b/d refinery in Martinez, Calif., was taken out of
service Friday to undergo some unplanned maintenance, Shell spokesman Steve
Lesher said.
Shell wouldn't comment on the nature or scope of that maintenance.
The July market for CARBOB gasoline in California rose a whopping 12.0 cents a
gallon with early morning deals done in Los Angeles from $1.42/gal to $1.48/gal,
and buyers left over at $1.49/gal in Los Angeles and San Francisco.
California spot diesel prices rose 4-5c/gal to show CARB grade at $1.185/gal
and EPA diesel at $1.175/gal.

[uptown ruler]

19. shell, poster child for greed

Spreading The Word
The Irony Curtain Shop

[progressivebydesign]

21. There was an insider that reported this months ago!

He said that Shell planned to cut production of a supposedly money-losing refinery in lovely Bakersfield, and take supplies from the Pacific Northwest.. thereby driving up the cost of Cali gas, AND pushing PNW prices up to 3 bux. Shell is the absolutely most expensive stations up here in my area.. greedy fuckers.

[peterh]

22. Abouttttt…..Face…

DJ Shell: No Plans To Cut Summer Output At 2 Calif Refineries

NEW YORK (Dow Jones)--Shell Oil Co. plans to operate its Bakersfield, Calif.
and Martinez, Calif. refineries at normal production levels until Labor Day,
despite reports to the contrary, the company said in a statement Monday.
A California consumer group, the Foundation for Taxpayer and Consumer Rights,
released documents Monday that it said showed Shell planned to reduce output for
routine maintenance just as the summer driving season kicked in.
"Shell plans to operate both the Bakersfield and Martinez refineries at normal
summer-time operations through the full summer driving season that closes around
Labor Day," the company said.
Shell has come under fire in recent months over the planned October closure of
the Bakersfield refinery, as concern mounts among state officials over further
tigthening an already narrow supply-demand gap.
The facility makes 6% of the state's diesel and 2% of its gasoline. Shell says
it hasn't been able to find a buyer for the refinery, and that it needs to close
the facility because of declining crude production.
"There are no plans to slow production rates at the Bakersfield refinery in
August. Any reports to the contrary are entirely inaccurate," Shell said in its
statement.
Shell Oil is a unit of Royal Dutch/Shell Group (RD).


(END) Dow Jones Newswires
06-21-04 1738ET(AP-DJ-06-21-04 2138GMT)




But they did take an FCC off line on Friday at Martinez for an undetermined time for an unspecified problem….so production has been slowed, abet unplanned……and it’s not entirely inconceivable that an unplanned, unspecified problem won’t pop up in Bakersfield….uhhh…next month….

…….I’ve grown very cynical in my 20 plus years in this industry…..