Exxon Denies Market Manipulation

Exxon Mobil Corp., which operates more than 4,000 On the Run, Tiger Mart and Tiger Express convenience stores, strongly denied charges by Sen. Ron Wyden (D-Ore.) that Mobil Corp. once tried to keep an independent California refinery from reopening as part of an attempt to influence the gasoline market.

In a statement, the oil company said that a 1996 internal Mobil memo concerning the Powerine Oil Co. refinery dealt with "one refiner's request for an exemption from an environmental requirement to produce cleaner burning fuel."

"This exemption would have created an unfair playing field," the statement said. Exxon Mobil said that if an exemption had been granted, a company that had not made necessary investments to produce cleaner burning fuel would be allowed to complete with companies that had.

The memo was one of several internal oil industry documents released by Wyden that, he alleged, showed market manipulation by oil companies. He alleged that the 1996 Mobil memo showed that major oil companies were not reluctant during the 1990s to try to force smaller independent refiners out of business.

Powerine Oil Co. had ceased operation in 1995, but was trying to start up again a year later, hoping to compete in the production of the cleaner gasoline required by California's environmental rules, the Associated Press reported.

The gas was selling at a premium and Powerine's re-entry into the market could cause the price to drop as much as 3 cents a gallon, a Mobil executive warned in the internal e-mail. "Needless to say, we would all like to see Powerine stay down. Full court press is warranted in this case," the e-mail said, according to the report. The refinery did not reopen.

Responding to Wyden's allegations, Exxon Mobil noted that the California Supreme Court on Thursday, in a 7-0 ruling, rejected charges that major oil companies had attempted to drive smaller refiners out of business or manipulated supplies of the special California-blend gasoline.

"The allegations repeated in the senator's report were considered and rejected by the court," the Exxon Mobil statement said. "Exxon Mobil stands by our ethical business practices and we take strong exception to Sen. Wyden's allegations of impropriety."
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