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Consumer Group Calls for Investigation of Refinery Shutdown in Martinez

SAN GABRIEL VALLEY TRIBUNE
http://www.sgvtribune.com/business/20150206/consumer-group-calls-for-investigation-of-refinery-shutdown-in-martinez

A consumer group is urging state officials to investigate Tesoro’s decision to close its refinery in Martinez while steelworkers at the plant participate in a national strike.

Liza Tucker, a consumer advocate with Consumer Watchdog, said taking the Golden Eagle plant offline will cut California’s crude oil refining capacity by 8 percent, resulting in higher prices at the pump.

Consumer Watchdog sent a letter to California Attorney General Kamala Harris and Robert Weisenmiller, chair of the California Energy Commission, citing “suspicious refinery behavior” on the part of Tesoro.

“This is an inopportune time for Tesoro to be shutting down a refinery,” Tucker wrote. “We ask that you investigate immediately the reasons for this unnecessary decision in order to rule out a concerted refinery effort to drive up the price of gasoline in California.”

Tesoro’s Martinez facility is California’s fourth largest oil producing refinery. It employs 650 workers and can process 166,000 barrels of oil a day.

“We understand that refineries must get ready to produce California’s special summer blend of gasoline,” Tucker said.” But it makes little sense to shut the plant down entirely right now, in the midst of a national strike the likes of which we haven’t seen in 30 years — unless it is a measure being taken by Tesoro to intentionally affect the price of gasoline.”

Tesoro had already shut down half of the plant for a planned maintenance turnaround before the United Steelworkers union strike began.

“Given the USW decision to strike, the safest operating option at this time for Martinez is to safely shut down the remaining process units, which the refinery will be commencing in the next 24 hours,” the company announced earlier this week.

Tesoro said it was “extremely disappointed” to have received strike notifications at its Anacortes, Washington refinery, its Martinez refinery and the Carson portion of its Los Angeles refinery.

“We intend to safely operate our Anacortes and Carson refineries with our fully qualified personnel and are confident in our ability to continue to responsibly produce transportation fuels to meet the ongoing needs of our customers,” the company said.

On Thursday, union leaders rejected a sixth offer from Shell to settle the dispute and negotiations were put on hold. The hiatus in talks means the strike is expected to extend into next week.

Union workers are striking at nine refineries in the U.S., marking the first nationwide walkout by oil workers since 1980. About 4,000 workers at nine plants, including seven refineries accounting for 10 percent of U.S. refining capacity, have been on strike since Sunday in California, Kentucky and Texas.

Gas prices have been steadily rising in recent days after months of welcome declines. Experts say the rise is primarily due to scheduled maintenance at the facilities as the refineries convert to the summer blend of fuel.

On Friday the average price for regular gas in the Los Angeles-Long Beach region was $2.60 a gallon, up 14 cents from a week earlier. The Inland Empire saw a similar jump with the price of regular rising 13 cents over the week to $2.53 a gallon.

Staff writer George Avalos contributed to this report.

Reach the author at Kevin.Smith@sgvn.com or follow Kevin on Twitter: @SGVNBiz