CHEVRON, TEXACO TO APPEAL OIL LINE RULING

Chevron Corp. and Texaco Inc. will appeal a California superior court judge's July 27 ruling that would convert their two major heated heavy crude oil pipelines originating in Central California's San Joaquin Valley to common carrier status. Stemming from a 16 year old antitrust suit, the order could make available another 280,000 b/d of capacity to producers and other pipelines in the San Joaquin Valley. Involved are Chevron's Estero pipeline extending to the El Estero tanker

Aug. 23, 1993

2 min read

Stemming from a 16 year old antitrust suit, the order could make available another 280,000 b/d of capacity to producers and other pipelines in the San Joaquin Valley. Involved are Chevron's Estero pipeline extending to the El Estero tanker terminal on the San Luis Obispo County coast and Texaco's 20 in. line north to the San Francisco Bay area.

The judge found Chevron and Texaco transported oil other than their own for profit, thus rendering them public utilities subject to state jurisdiction. The companies called the decision a mistake and unwarranted, claiming the lines' proprietary status should be maintained, especially since the decision did not apply to the competing Mobil M-70 heated crude line from the valley to its refinery in Torrance.

The original lawsuit filed in 1975 by the state and the city of Long Beach involved alleged price fixing by seven companies. Six settled in 1990-91 for $320 million cash and an agreement to switch unheated proprietary lines to common carrier status. The seventh, Exxon Corp., refused the settlement and was acquitted in a May 1992 jury trial. The unheated lines became common carriers Jan. 1, but the three unheated lines were held out for further review, culminating in the superior court ruling.

Converting all the companies' unheated lines to common carrier status this year should have little effect on transportation and market conditions in California because sharing them "was basically a reality, anyway," Chevron said.