The 72-year-old refinery is one of only 13 remaining in operation in California. At the time it announced plans to close the refinery, Shell said that the refinery had lost money two of the three previous years and predicted it would lose money again in 2004. As justification for the closure, it also cited the declining availability of San Joaquin Valley crude, an unusual heavy crude available exclusively in the area around the refinery.
But critics of the plan claimed that Shell’s justifications didn’t stand up under scrutiny. Internal company documents secured by The Foundation for Consumer and Taxpayer Rights (FCTR), a Santa Monica-based group that led the battle to save the facility, indicated that the refinery was profitable in 2003 and in fact had the highest profit margin of Shell’s eight U.S. refineries at 55 cents per gallon. That is 36 cents per gallon more than at Shell’s refinery in Port Arthur, Texas.
FCTR also questioned Shell’s contention that locally produced crude oil is in short supply, citing statistics from Chevron Texaco and the State of California that indicate crude oil supplies in San Joaquin Valley are sufficient for another 20-35 years. Shell argued, however, that much of that crude is not available to it because it is produced by Chevron Texaco. CT cannot sell the crude to Shell, Shell contends, as a condition of Texaco’s agreements with the Federal Trade Commission that cleared the way for the merger of Chevron and Texaco. Those agreements required Texaco to sell its share in the Bakersfield Refinery and limited other, related activities.