Paramount to Make Gasoline

Another refinery will soon start making gasoline for the California market -- bucking a decades-long trend of plant closures and limited expansions in the state’s fuel supply.

Paramount Petroleum Corp., a small Southern California refiner that has been selling asphalt and other crude oil byproducts, will begin making gasoline and diesel in early 2005, the California Energy Commission said Friday.

“Refiners tell us that they have trouble expanding, and they do,” said William Keese, chairman of the energy commission. “But this shows that it can be done.”

Although production at the facility in Paramount will be small compared with the state’s daily needs -- just 315,000 gallons of gasoline a day in a state that consumes 42 million gallons daily -- state officials say the added production will help ease California’s tight supplies.

Officials from Paramount did not return calls for comment.

The news comes as Shell Oil Co. confirmed Thursday that it would delay the Oct. 1 closure of its Bakersfield refinery for six months to allow time for further talks with potential buyers.

But Shell said it might have to cut the delay to just three months if it wasn’t able to secure certain environmental clearances. It reiterated it would close the plant -- on Dec. 31 or March 31 -- if a buyer wasn’t found.

Shell’s plan to shutter the Bakersfield facility has caused a backlash among legislators and others who say the closure would further increase California’s fuel prices. The San Joaquin Valley plant produces 2% of the state’s gasoline and 6% of its diesel.

Paramount’s planned output could replace nearly 60% of the lost diesel supply and more than 35% of the lost gasoline if the Bakersfield plant closes.