BP the oil giant responsible for the explosion and fire in the Gulf of Mexico this past April, killing 11 workers sinking the Deepwater Horizon oil platform rig that spewed massive amounts of oil into the Gulf that destroyed the fishery industry, wetlands, marshlands and wildlife along the US Gulf Coast the result of a mammoth cleanup effort, seek buyers for two of its Texas and California oil refineries, also its marketing business in Southern California, Nevada and Arizona.
BP stated because of changing developments in global oil demand, it intends to reposition its refining and marketing business in the US and riditself from two of its US refineries. BP is planning on completing the sales in the 2012 presidential election year subject to regulatory approvals from the Environmental Protection Agency (EPA) slashing its US operations in half for its refining capacity.
BP expects both its Texas and California refinery with its marketing network anticipates significant market interest in both assets. BP will ensure that fulfillment of all current regulatory agreements associated with both refineries are reflected in any transaction.
The Texas refinery part of BP’s merger with Amoco in 1998 is a large, highly complicated refinery that produces more than 475,000 barrels per day (bpd) capacity, considered the third biggest refinery in the US. The California refinery, south of Los Angeles, is a combined fuels value chain stretching across California, Arizona and Nevada, produces 265,000 barrels per day and supplies at least25 per cent of Los Angeles area gasoline demand. This was accomplished through BP’s purchase of ARCO Oil in 2000.
According to BP, The propertiesassociated with the California refinery will separateits interests on the refinery site, crude and product terminals and also its marketing interests, which are part of this sale. BP also expects to rid itself of ARCO brand oil they purchased in 2000 but retain ownership of and license rights.
Because of the oil spill in the Gulf this past April, the EPA has tighten its belts on environmental protection and regulation for deepwater directional drilling which was a laxed regulatory agency under the Bush administration. The Deepwater Horizon oil platform disaster was the tip of the iceberg for congressional members to heavy regulate the big oil industry.
BP plans to divert its attention on future investment in the US improving and upgrading its other refinery sites in Whiting, Indiana, Cherry Point, Washington refineries and its 50 per cent interest in the Toledo, Ohio refinery. BP has a history of polluting air and water in the US.
The Whiting, Indiana plant was design to refines oil made from tar, the same tar ball that they cleaned up collecting from coastal beaches and shores from the Gulf’s past April oil spill, redefining into one of the dirtiest forms of crude in the world which is a dirty process. The process uses huge amounts of fresh water. Canada refused BP’s request to process and refine oil shale and tar sands in Canada, so BP decided to transport millions of tons of the materials to Indiana. Without access to Lake Michigan, and without the ability to dump millions of tons of polluted water back into the lake, BP’s Indiana’s plant would be less profitable.
Chicago has one of the world’s best water filtration systems. BP was allowed to dump its pollutants into Lake Michigan, take all the fresh water it needed and dump any pollution they created.BP received permission from Indiana’s Department of Environment Management according to Capitol Hill Blue, to increase and release the amount of air and water pollution it produces. Reports are that BP is the environment 6th largest air and water polluter in the Great Lakes, Chicago area.
BP is currently in the process of increasing its oil refinery investments in the Whiting refinery with a large program to transform its 405,000 barrels per day (bpd) capacity to process heavy Canadian crude; a clean diesel upgrading project at its 240,000 bpd Cherry Point refinery that will included its 160,000 bpd capacity Toledo, Ohio refinery a split joint venture with its partner Husky Energy Inc.
In the last few years, BP has spent more than $1 billion invested in modernizing and improving. The US remains a very important market for BP’s fuels, lubricants and petrochemicals businesses.
The opinion expressed in this commentary
article are solely those of Michael Coker