By Donna Beth Weilenman
Martinez News Gazette
Special to the Herald

California Attorney General Xavier Becerra announced he is seeking an injunction to block Valero Energy Corporation from buying the Martinez petroleum terminal, a purchase he called “anti-competitive behavior” and “unacceptable.”
A court hearing on the motion is expected to take place next month.
Becerra made the announcement Thursday in San Francisco, saying if Valero’s purchase of the Martinez terminal from Plains All American Pipeline goes forward, all significant Northern California petroeum terminals would be owned by refineries, and that could drive up California gasoline prices further.
Those prices already are expected to increase Nov. 1 after Gov. Jerry Brown signed a new law that increases taxes on both gasoline and diesel fuel and adds other fees to vehicle operations.
“We believe this is not only critical for all California consumers, but indispensable for keeping competition,” Becerra said.
“If the final independent petroleum terminal is bought, suppliers can manipulate the market to dictate prices,” he said. “We’re not trying to stop companies from doing business. We’re trying to protect consumers.”
His statement continued, “As the state’s chief law enforcement officer, I’m committed to ensuring that we have a thriving and competitive marketplace.”
Valero has expressed interest in buying both the Martinez and the Richmond terminals, which the company had to give up in 2005 in order to proceed with its purchase of the terminals’ previous owner.
However, Becerra wants to halt the purchase only of the Martinez terminal, for which he’s requesting a preliminary injunction.
Spokespersons for both Valero Energy and Plains All American Pipeline have insisted the two companies are not in competition with each other, pointing out that
Becerra was stymied earlier this month when he requested a temporary restraining order to block the sale. His motion was denied when the Federal Trade Commission (FTC) decided the sale could proceed.
Ironically, the FTC had been a factor in a 2005 Valero transaction. The Commission initially objected to Valero’s desire to buy Kaneb Services and Pipe Line Partners, a $2.8 billion deal.
The resulting anti-trust settlement required Valero to give up any claim to the Martinez and Richmond terminals that Kaneb owned.
California’s then-Attorney General Bill Lockyer forced Valero to sell the two terminals to resolve objections to the transaction.
Another provision of the 2005 settlement required Valero to increase storage at its Benicia refinery to a total of 900,000 barrels. Valero also had to stop leasing crude oil storage tanks at the Martinez terminal. In exchange for those concessions, the FTC removed its objection to the purchase.
Valero and Plains representatives have disputed Becerra’s contention that the new proposed sale of the Martinez terminal to Valero would raise fuel prices.
They issued a joint statement saying Valero “plans to meaningfully expand capacity at both the Martinez and Richmond Terminals, which will benefit customers as well as California consumers.”
The two companies’ statement also promised to fight Becerra, saying “Valero and Plains All American will continue to vigorously defend the planned transaction in federal court.”
Their joint announcement, issued July 12, said Becerra’s filing with the United States District Court for Northern District of California “mischaracterized” the purchase as a “merger.”
Instead, they described the sale as a “proposed transaction involving the acquisition by a subsidiary of Valero Energy Corporation….of two petroleum storage and distribution terminals located in Martinez and Richmond, California, owned by a subsidiary of Plains All American Pipeline.”
The statement added, “It is this proposed acquisition of certain assets that the California Attorney General is seeking to block.”

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