From: Erin Waldner, The Bakersfield Californian
Published October 12, 2004 12:00 AM

Shell, EPA Work on Deal to Keep Bakersfield, Calif., Refinery Open

Oct. 12—The U.S. Environmental Protection Agency expects to reach an agreement with Shell Oil Co. this month that would keep the company's Bakersfield refinery operating into next year, according to a report from Reuters.


The news service quotes California EPA spokeswoman Lisa Fasano saying: "We're actively in discussions; it's an effort to accommodate the state's desire to keep Bakersfield open. We expect we will be wrapping it up by the end of the month, if not sooner."


The EPA could not be reached for comment on Monday, Columbus Day.


Shell conceded to the California Attorney General's office in August that it would continue operating the Rosedale Highway refinery at least until Dec. 31 to give the facility time to sell. The Attorney General's office and the Federal Trade Commission are investigating Shell's decision to close the refinery for possible antitrust violations.


Shell originally planned to close the refinery on Nov. 1, citing continual production declines in San Joaquin Valley heavy crude oil.


The Attorney General's office said in August that Shell would keep the refinery running until March if the EPA agreed to modify a consent decree it has with Shell. The contract stipulates Shell will be fined unless it reduces pollution from the refinery's boilers and heaters by a certain amount by Dec. 31.


Shell spokesman Stan Mays said Monday the company is still in discussions with the EPA, but that Shell was optimistic they'll reach an agreement.


Bob van der Valk, who works in the oil industry in Los Angeles and has been following the refinery's future, said with gasoline selling for more than $2 a gallon, Shell would be "crazy" to close the refinery any time soon.


"There's no better time to be in the refining business in California," van der Valk said.


Jamie Court, a spokesman for the Foundation for Taxpayer and Consumer Rights in Santa Monica, said extending the refinery's operations until March "is a needed building block to making sure the refinery stay opens."


Meanwhile, Mays said Shell is continuing its discussions with companies that bid on the refinery and that no agreement has been reached. He would not say how many companies submitted bids or when the process might conclude.


© 2004, The Bakersfield Californian. Distributed by Knight Ridder/Tribune Business News.


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