is water wet?

 First Senator Boxer, now State Attorney General Bill Lockyer is asking for transcripts of what an oil refinery executive said about limiting supply - comments made in front of our cameras, by one of the country's biggest independent refiners. ABC7's Mark Matthews reports.

 

Bill Lockyer saw our story and now wants a transcript of what oil refinery president Hank Kuchta said to fellow refiners at last month's conference. What that refiner said conflicts with oil company explanations of high prices based on supply and demand.

 

The oil companies tell us high prices are the natural result of demand outstripping supply. This is how President George Bush described it today to a group of newspaper editors.

 

President George W. Bush: "You see, the problem is the supplies are out of balance with demand."

 

Sounds simple enough. But listen to what the president of Premcor refining told a gathering of refiners here in San Francisco.

 

Hank Kuchta, President & COO of Premcor (3/10/05): "If we go in and we start expanding like crazy before the demand gets there, that's the shoot yourself in the foot theory, and we'd all be the opposite of geniuses, you pick the word. They'd kill us, believe me."

 

Hank Kuchta is president of Premcor, an independent oil refiner with the capability of processing nearly 800,000 barrels a day. But Kuchta told his fellow refiners his company doesn't want to produce as much gasoline as it can because that might flood the market and drive down prices.

 

Here's how Kuchta said his company would handle that.

 

Kuchta (3/10/05): "We are going to make sure that we meet the demand that exists and not some theoretical demand."

 

It's a statement that caught the attention of California's attorney general.

 

Bill Lockyer, (D) California Attorney General: "This is the first time that a high executive was recommending, and no one disagreed, that they restrict supply."

 

The attorney general indicates he doesn't see clear evidence of a crime, but he wants to investigate.

 

Yesterday, California Senator Barbara Boxer called the Federal Trade Commission to investigate Premcor.

 

So far, the company won't admit that a copy of the speech even exists.

 

Mark Matthews: "What did Premcor tell you when you called and asked for a opy of the speech?"

 

Lockyer: "Well they told us they'd get back to us."

 

Premcor told us the same thing. We are still waiting for their response. As we reported yesterday, Senator Boxer is asking for the Federal Trade Commission to investigate, and today the FTC called our general manager here at ABC7 to make sure that we preserve our tapes.

ABC