Exxon Mobil Refinery

An explosion at the Exxon Mobile refinery in Torrance damaged a pollution control system and forced the plant to reduce operations to 20% of normal production. (Christina House / For the Los Angeles Times)

Ivan Penn
October 13, 2014

An advisory committee to the California Energy Commission wanted to discuss the causes of the high gasoline prices in the state this summer during a workshop Tuesday — only the oil refiners and their association refused to show.

Severin Borenstein, chairman of the Petroleum Market Advisory Committee, drafted a series of questions as part of scheduled meeting on California’s gasoline prices this year, which in the Los Angeles region reached as much as $1.50 more than the national average.

A major contributing factor to the high gasoline prices has been the low production at the Exxon Mobil Torrance refinery, which was damaged in a February explosion. The plant, which normally accounts for 10% of the state’s capacity and 20% in Southern California, has operated at less than 20% of normal production since the explosion.

“We are tasked with understanding and advising on California’s volatile gasoline prices,” Borenstein said. “We are holding a workshop … to delve into why California’s gas prices have been so high compared to the rest of the country since the Exxon refinery fire in February, and why this relative price spike has lasted for seven plus months instead of the usual one to two.

“Unfortunately,” he added, “the in-state refiners and [Western States Petroleum Assn.] are declining to participate.”

Tupper Hull, a spokesman for the Western States Petroleum Assn., said the committee already has received “comprehensive briefings by [energy commission] staff regarding the California fuel markets, including the factors that contribute to disruptions in that market and higher prices for gasoline and diesel fuel in California compared to much of the rest of the nation.”
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In addition, Hull said the commission receives large volumes of data from fuel refiners and distributors in California on all aspects of refining, marketing and distribution of petroleum products.

“Much of that information,” Hull said, “is sensitive from a competitive perspective and therefore must be kept confidential under the Petroleum Industry Information Reporting Act of 1980.”

Michael Barr, the lawyer for the petroleum group, wrote to Borenstein in an Oct. 8 letter that, “while the [Western States Petroleum Assn.] and its members have a long history of working cooperatively with the [energy commission] — and we hope to continue to do so — WSPA is not in a position to respond to these issues.

“As you know, WSPA is a nonprofit trade association representing 25 companies, many of whom are market competitors,” Barr said. “WSPA has no specific information about supply chain disruptions or pricing behavior unique to specific members or market participants.”
Barr urged Borenstein to consult the organization’s actual members.

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