Sen. Boxer Seeks Review of Shell Plant Set to Close

Citing “apparent contradictions” in Shell Oil Co.’s reasons for closing its Bakersfield refinery later this year, U.S. Sen. Barbara Boxer on Wednesday asked the company to allow an independent review of the facility’s profits and prospects.

In a letter delivered to Shell’s top U.S. executive, the California Democrat also called on the company to aggressively pursue a sale of the facility by hiring a broker, negotiating with possible buyers and postponing the Oct. 1 closure date to provide more time to strike a deal.

Shell spokesman Cameron Smyth declined to comment on Boxer’s letter but said the company had received 14 inquiries from prospective buyers, including four that were in writing and considered by the company to be serious expressions of interest.

Smyth declined to name the individuals or companies involved. Unless those dealings produce what Shell believes is a “credible offer,” then the closure date will not change, he said.

Shell announced plans in November to close its Bakersfield refinery by Oct. 1 because the facility’s crude oil supply was declining. The Bakersfield facility produces 2% of California’s gasoline and 6% of its diesel -- important in a market with a precarious balance between supply and demand.

The facility has become a focal point for public officials like Boxer, who say they are fed up with California’s chronically high gasoline prices and believe that Shell’s move will pad profits for Golden State refiners and make matters worse for motorists.

The statewide average cost of self-serve regular gas has stayed above $2 a gallon for 10 weeks.

Boxer and other elected officials have questioned Shell’s reasons for closing the Bakersfield refinery. The facility’s supply of crude oil remains plentiful, according to state statistics, and internal documents show that the Bakersfield plant is profitable and produced higher margins in early April than any of Shell’s other U.S. refineries.

In her letter, sent to Shell Oil Products President and Chief Executive Lynn Laverty Elsenhans, Boxer also challenged the executive’s assertion that a February production dip at the Bakersfield plant was “largely due to our limited access to crude.” An internal report blamed the slowed production on mechanical problems.

Boxer said an independent audit was needed because the oil company’s credibility had been undermined by its inconsistent statements about the refinery and by a massive accounting scandal at parent Royal Dutch/Shell Group. She did not specify who should conduct the review. The Federal Trade Commission already is looking into the matter.

“What they have told the public has tremendous holes in it,” Boxer said of Shell executives.