From: Erin Waldner, The Bakersfield Californian
Published December 7, 2004 12:00 AM

Bakersfield, Calif., Shell Refinery Reaches Pact with EPA to Stay Open

Dec. 7—The Shell Bakersfield Refinery on Rosedale Highway has received a stay of execution.


The company announced Monday it reached an agreement with the U.S. Environmental Protection Agency and the U.S. Justice Department that will allow the refinery to stay open through March 31, 2005.


Had it not reached an agreement, Shell would have had to close the refinery by the end of this month.


Shell Oil Products U.S., part of Shell Oil Co., agreed to reduce an additional 62 tons in annual nitrogen oxide emissions, companywide, by March 31. The original deadline was Dec. 31, 2008.


In return, Shell received permission to come under its original nitrogen oxide emission reduction target for the year by seven tons. Nitrogen oxide is a pollutant.


The agreement between Shell and the EPA must now go through a period of public comment. Court approval is also required. The timeline wasn't known Monday.


Shell said it plans to close the refinery by March 31 if the facility does not sell by then. The company said it is continuing discussions with a short list of bidders.


Industry experts have said the refinery's closure will lead to higher fuel prices. The refinery produces 2 percent of the state's gasoline supply and 6 percent of diesel.


Shell originally planned to close the refinery on Oct. 1, 2004. Under pressure from California Attorney General Bill Lockyer and Sen. Barbara Boxer, D-California, the company agreed to delay the closure to give time for the refinery to sell.


"We're pleased the refinery is going to remain open at least through March of next year," Tom Dresslar, a spokesman for Lockyer, said Monday. "The real prize is a sale agreement that keeps it open over the long term. We continue to have our eye on that prize."


Boxer said via an e-mail from her press office that she was pleased another obstacle to keeping the refinery open had been removed.


Lynn Laverty Elsenhans, president of Shell Oil Products U.S., said in a statement "we're pleased to be in a position to extend operations at the Bakersfield facility."


The company has been criticized for allegedly putting up roadblocks to the refinery's sale.


Shell critic Jamie Court said Monday that Shell's agreement with the EPA "puts the burden on Shell to negotiate reasonable terms for buyers." If the refinery doesn't sell, he said, people won't be able to blame the government.


The refinery employs about 230 people and uses about 150 contractors.


Workers there were thrown for a loop when Shell agreed in August to keep the refinery open through at least the end of the year.


According to Shell, about 125 employees had accepted transfers to other Shell locations — primarily in Texas — in anticipation of the Oct. 1 closure date. Some had already bought new homes.


Shell asked employees to stay on until the refinery closed. Those who were planning to retire Oct. 1 would still receive a severance package, after the refinery closed.


Ed Huhn, secretary-treasurer of the local union that represents workers at the refinery, said last week that Shell is paying employees who had accepted transfers a per diem and footing travel expenses so they can visit their families from time to time.


"The company is putting some money out on that, helping those people out financially, but there's still that thing of being away from your families for months and months and not knowing" the fate of the refinery, Huhn said at the time.


To see more of The Bakersfield Californian, or to subscribe to the newspaper, go to http://www.bakersfield.com.© 2004, The Bakersfield Californian. Distributed by Knight Ridder/Tribune Business News.


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