08/11/2004: 
Criminally Absurd
Evidence Shows Shell to Demolish Profitable Refinery, Drive Up Gas Prices
from U.S. Newswire
SANTA MONICA, Calif., - The Foundation for Taxpayer and Consumer Rights today released internal Shell documents showing the oil refiner is set to close and demolish its Bakersfield refinery despite the fact the site had the biggest refinery margins, or profits per gallon, of any Shell refinery in the nation as of yesterday.
Shell had claimed it was not economically viable to keep the refinery open and has refused to put it up for sale. Bakersfield supplies 2 percent of the state's gasoline and only 13 refineries feed California's tight gasoline supply (down from 37 in 1983).
An April 5th internal Shell document released today by FTCR shows that Bakersfield's refining margin at $23.01 per barrel, or about 55 cents profit per gallon, topped all of Shell's refineries in the nation. That means, for example, that margins are 36 cents per gallon higher in Bakersfield than in Port Arthur, Texas. The internal document comments under the category of refinery margins "Wow."
"Only an oil company that wants to short the market and artificially drive up the price of gasoline would demolish a highly profitable refinery rather than sell it," said Jamie Court, president of FTCR and author of the book Corporateering (Tarcher/Putnam). " Shell has deceived the public about Bakersfield and must be forced to keep this refinery open or sell it to a competitor.
Among the documents released today by the consumer group is an end-of-2003 memo from Shell manager Jeff Krafve to fellow refinery employees that describes Bakersfield's refining operation this way: "(W)e turned in excellent operational performance this year. We are the most reliable US Shell refinery in 2003, and achieved world-class performance two years in row now. We have made quantum step improvements in our environmental compliance, finishing well under target again for the second straight year. We have reduced the expense we control 15-plus percent year over year, and have been one of the few Shell U.S. refineries to turn a profit... We've done this with the lowest personnel index in Shell refining in the country, making us comparatively the most productive and effective workforce in the system."
