CA Attorney General Seeks To Block Sale Of Martinez Terminal

CONTRA COSTA COUNTY, CA -- California Attorney General Xavier Becerra announced his plans Thursday to seek a court injunction to block the proposed sale of a Martinez petroleum terminal to Valero Energy Corp. because he fears the acquisition could lead to even higher gas prices in Northern California.

Valero is seeking to buy the Martinez petroleum storage and distribution terminal from Plains All American Pipeline.

Becerra says because it is the last independently owned terminal in Northern California not controlled by a refinery, he fears that if the transaction proceeds, all three critical Northern California petroleum terminals would be operated by refineries -- allowing them to coordinate and control access to the terminals and the flow of petroleum from them.

“I believe that this proposed acquisition would suffocate open competition in the area and raise gas prices for hard-working Californians,” Becerra said. “That’s simply unacceptable ... Keeping terminal operations independent of refineries is the best way to protect Californians from this result.”

The motion for an injunction will be filed as part of a federal anti-trust lawsuit initially filed by the state on June 30 challenging Valero's acquisition of the Martinez terminal as well as one in Richmond also owned by Plains. A state motion for a temporary restraining order was denied earlier this month.

Valero CEO Joe Gorder and Plains CEO Greg Armstrong issued a joint statement last week saying they are disappointed by the attorney general's actions in challenging the sale.

The companies argued that they do not compete in California and that the Federal Trade Commission has chosen to allow the sale to proceed.

"As the FTC and California Attorney General know, Valero plans to meaningfully expand capacity at both the Martinez and Richmond Terminals, which will benefit customers as well as California consumers," the statement said. "Valero and Plains All American will continue to vigorously defend the planned transaction in federal court."

The attorney general’s office said a court hearing on the motion will occur in mid-August.

Bay City News Service contributed to this report.

Photo: Rich Pedroncelli/Associated Press