Archive for Sunday, January 7, 2001

Oil company’s Asia shipments drove up costs on West Coast

January 7, 2001


— BP Amoco bumped up West Coast oil prices by exporting Alaskan crude to Asia for less than it could have sold it to U.S. refiners, according to experts' reports and court records obtained by The Oregonian.

Gas prices on the West Coast are among the highest in the nation, with Oregon motorists averaging $1.61 for regular unleaded about 20 cents above the national average.

The documents, which the newspaper filed suit to obtain, were part of a Federal Trade Commission analysis of BP's proposed $26.8 billion buyout last year of Atlantic Richfield Co.

In a 1995 e-mail exchange described by the newspaper, BP managers Robert Aicher and Linda Adamany discussed "shorting the West Coast market" to achieve "West Coast price uplift scenarios." The e-mail describes shipping ANS to FE Alaska North Slope crude to the Far East to "leverage up" prices on the West Coast.

"When they say 'leverage up,' what does that mean?" said economist R. Preston McAfee, one of two experts hired by the FTC. "It means, 'We're going to jack up the West Coast price by taking some of our production and selling it at a lower price elsewhere."

McAfee and veteran engineer Steanson Parks, president of a consulting firm in Dallas, both concluded for the FTC that BP had tightened oil supplies to raise the price of millions of barrels of crude oil shipped to refineries in California and Washington state since 1996.

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