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Consumer advocates say refineries may have falsified information

November 16, 2012|By Ronald D. White
  • Firefighters finish battling a blaze at a Chevron refinery in Richmond, Calif., in August.
Firefighters finish battling a blaze at a Chevron refinery in Richmond,… (Aric Crabb / The Contra Costa…)

Consumer Watchdog, saying that refineries operating in the state may have falsified information to help boost gasoline prices, wants the California attorney general to launch a criminal investigation.

The advocacy group made its request in a letter to state Atty. Gen. Kamala D. Harris.

“It appears that California’s oil refineries falsified public information to drive up the price of gasoline," Consumer Watchdog’s president, Jamie Court, and energy project director, Liza Tucker, said in the letter.

"At Chevron's Richmond refinery, emissions reports suggest that the refinery never shut down, though it reported being down for two weeks in May. Supplies were actually growing in May when consumers here paid at least 50 cents more per gallon than the national average," they said.

Consumer Watchdog said that if the allegation is true, that behavior "is criminal conduct and reminiscent of the Enron-like manipulation of the California energy market. This unprecedented information demands a criminal investigation.”

The Consumer Watchdog call for an investigation arises from a report released Thursday by McCullough Research in Portland, Ore. The report examined fuel price spikes on the West Coast last May and October that provided "windfall profits" for fuel producers.

Using emissions data to determine the level of production activity at the refineries, the McCullough report found indications that facilities were operating normally during a time in which they were supposedly shut down or operating at a reduced capacity.

"In both cases," the McCullough report said, "the most common explanation was a major outage. The October spike was blamed on the Aug. 6 fire at the Richmond refinery."

The report also questions maintenance information released by officials at Shell Oil Products' Martinez refinery.

Kayla Macke, a Shell spokeswoman, said the McCullough report was “in error” and had confused a company statement that a unit at the Martinez refinery was shut down, when the rest of the refinery had continued to operate.

“Our goal is always to run as much as we can as safely as we can,” Macke said.

Chevron Corp.'s Richmond refinery in the Bay Area is California's second-biggest producer of gasoline and diesel.

The Martinez refinery is the state's fifth-biggest producer of gasoline and diesel.

McCullough said its findings "demand investigation. The market anomalies also require that a federal agency be given the regulatory authority to monitor and prevent the exercise of market power for oil."

Chevron has not responded to a request for comment.

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