Flying J,, which filed for bankruptcy last month, has shut down an oil refinery in California because it doesn't have cash to buy crude to feed the operation.
The closure does not affect Flying J's other refinery in North Salt Lake, spokesman Tom Davies said Thursday.
"We will be winding down refining operations at the [Bakersfield, Calif.] facility as we continue to explore opportunities," Fred Greener, executive vice president of Flying J subsidiary Big West of California, said in a statement.
"We hope that this suspension will be short-lived, and are working very hard to find a solution that will allow resumption of operations. However, at this time, we cannot predict when that might occur," Greener said this week.
The 70,000-barrel-per-day Bakersfield refinery supplies 6 percent of California's diesel and 2 percent of the state's gasoline. The capacity of the refinery in North Salt Lake is 29,400 barrels per day.
Big West has been striving to find oil supplies for the Bakersfield refinery since Flying J filed for bankruptcy on Dec. 22. Ogden-based Flying J sought refuge from its creditors following a liquidity crisis sparked by falling oil prices and trouble securing financing from lenders.
"Following the Chapter 11 filing we have not had the cash liquidity needed to purchase crude in the necessary types and quantities under the terms being offered by suppliers," Greener said.
"We are continuing to evaluate the full range of options, but we have been unsuccessful in our efforts thus far to find a workable solution," he said.
The disruption has not affected the North Salt Lake refinery, which continues to operate normally.
Shell Oil sold the Bakersfield refinery to Flying J in 2005, claiming it could not operate the plant profitably. Shell continues to be a top supplier of crude oil to the refinery.
The California Attorney General is investigating whether Shell is illegally refusing to sell crude oil to the refinery or shutting off pipeline access, according to a letter sent Jan. 23 to California Sen. Barbara Boxer.
Shell representatives did not respond to a request for comment.
Big West is seeking talks with the United Steelworkers Union over the future of the plant and its labor contract with refinery employees.
"We wish the circumstances were different," Greener said.

