Injunction Against Martinez Oil Terminal Sale Denied

MARTINEZ, CA -- California Attorney General Xavier Becerra vowed Tuesday to press forward with a January trial after losing his bid for a preliminary injunction to block the sale of a Martinez oil terminal to Valero Energy Corp. Becerra claims in a federal antitrust lawsuit that Valero's planned purchase of the Martinez facility and a smaller terminal in Richmond from Plains All American Pipeline will give Valero undue control over the gasoline market and cause higher prices for consumers.

Becerra filed the lawsuit in U.S. District Court in San Francisco this summer on behalf of the people of California.

Valero, based in San Antonio, Tex., and Plains, based in Houston, contend Valero's expanded capacity will help consumers.

Valero, which owns a refinery in Benicia, describes itself as the world's largest independent petroleum refiner. Plains operates pipelines and terminals and does not own any refineries. Becerra has said the Martinez
terminal is Northern California's last independently owned terminal that is not controlled by a refinery.

U.S. District Judge William Alsup has scheduled a trial on the antitrust case to begin on Jan. 8.

On Monday, however, Alsup turned down Becerra's request for a preliminary injunction blocking the sale until the trial is held. Alsup said state lawyers had "raised serious questions regarding whether the proposed transaction will have anticompetitive effects in the market for bulk sales of gasoline and other light petroleum products in Northern California and Northern Nevada."

But the judge said a preliminary injunction is not necessary because "it will be easy to restore the status quo" and reverse the effects of sale if Valero and Plains complete it before the trial and if Becerra is successful.

In the meantime, Alsup ordered Valero to keep the existing employees, infrastructure and contracts in place at the terminal and implement a firewall between Valero officials and confidential information about current customers of the facility.

He also warned that Valero and Plains "proceed entirely at their own risk if they close" the sale before a final judgment in the case.

Becerra said in a statement Tuesday, "I will continue doing everything in my power to preserve a fair marketplace.

"We are now heading to trial, and our legal team is ready to make the case that competition would be suffocated if Valero is allowed to acquire the Martinez terminal under the terms of the current deal," he said.

Representatives of Valero and Plains could not be reached for comment.

By Bay City News Service

(Photo of California Attorney General Xavier Becerra by Marcio Jose Sanchez/Associated Press)