Oil refinery profits investigation launched

By Caitilin McAdoo, Bay City News Service

April 28, 2006

Attorney General Bill Lockyer has announced plans to subpoena documents tomorrow from all 21 California oil refineries relevant to an investigation into whether the companies have been profiteering and gouging prices.

"Its time that the oil companies fork over the information needed for us to determine the extent to which they are unjustly enriching themselves at the expense of drivers," said spokesman for Attorney General Bill Lockyer's office Tom Dresslar.

Five of the largest California refineries are in the Bay Area, including Chevron-Texaco in Richmond, Shell in Martinez, Valero in Benicia, ConocoPhillips-Rodeo in San Francisco and Tesoro Golden Eagle in Martinez, according to Dresslar.

Shell spokesman Dave Parker said that Shell had no comment at this time on the subpoenas. Other Bay Area refineries that were contacted did not immediately return phone calls.

Dresslar said that the important difference between this investigation and previous investigations is that Lockyer, who is currently running for state treasurer, has assembled a team of experts to analyze all potential law enforcement options available.

In the past, Department of Justice investigators have focused their attention on anti-trust enforcement, which requires them to find concrete evidence of collusion, according to Dresslar. They are currently looking at oil refinery profits from a broader perspective, he said.

According to information released by Lockyer's office, the seven largest oil companies in California control more than 95 percent of the state's refining capacity and California refiners' profit margins have far outstripped the national average.

According to the California Energy Commission, the current difference between the price oil companies pay for crude oil and the price consumers pay at the pump is 130 percent. The price for crude, however, has only risen 14 percent, according to Lockyer's office.

Copyright © 2006 by Bay City News, Inc. -- Republication, Rebroadcast or any other Reuse without the express written consent of Bay City News, Inc. is prohibited.

####