A small San Antonio oil refiner filed suit yesterday in U.S. District Court to block the sale of government-owned oil from the Elk Hills Petroleum Reserve in California only to discover the sales were completed earlier this week.
Since the sales were completed, Judge John H. Pratt did not issue the restraining order on the Department of Energy requested by Copano Refining Inc., but did schedule a hearing on the suit for Jan. 31.
The sales were based on bids received last month by the government for 127,465 barrels a day of crude oil over the next six months. Phillips Petroleum Co. was the highest bidder, paying a total price in the neighborhood of $40 a barrel for 10,000 barrels a day. Most of the oil was sold for about $35 a barrel.
Copano charged in its complaint that the high prices accepted by the government will cause a general increase in other oil prices, making operation of its 15,000-barrel-day refinery uneconomic. The company said DOE prepared neither an economic impact nor an environmental impact analysis as is required by law.
DOE officials had indicated earlier that the bids would be accepted on Jan. 21. One source close to Copano said inquiries by the company's lawyers may have spurred DOE to move more quickly.