The legal standoff between Petroleum refining giant Valero Energy Corp and the California Attorney General’s Office has come to an end. Valero announced on Monday they would be calling off the plans to purchase two petroleum storage and distribution terminals in Martinez and Richmond California from Houston-based Plains All American Pipeline LP.
Despite an extensive investigation by the Federal Trade Commission concluding that there was no grounds for regulatory action, California Attorney General Xavier Becerra filed a sealed anti-trust lawsuit on June 30 in an effort to block the sale of Northern California’s only remaining independent petroleum terminals. Becerra alleged that the deal would have stifled competition and resulted in higher gas prices.
In a July comment Becerra stated, “If the final independent petroleum terminal is bought, suppliers can manipulate the market to dictate prices” later adding “We’re not trying to stop companies from doing business, we’re trying to protect consumers.”
Valero already owns a refinery in Benicia, a nearby Bay Area city, and was seeking to expand its capacity in the area claiming that it would benefit customers and California consumers. Plains All American is Houston’s seventh-largest public company and operates an extensive network of pipeline transportation, terminalling, and storage operations for crude oil throughout the United States and Canada.
A statement from Lilan Riojas, a spokeswoman from Valero said “Plains and Valero have each decided that it is in their best interest to terminate the transaction rather than endure the continued uncertainty that a lengthy trial would create for the California-based employees and customers of the terminals, as well as the considerable expense associated with defending a taxpayer-funded lawsuit”
In response, a statement from Becerra called this “welcome news for all Californians” adding “Going forward, let there be no doubt that the California Department of Justice will continue doing everything in its power to preserve a fair marketplace.”
Article written by HEI contributor Kevin Abbott.