Danny Westneat / Times staff columnist
Don't forget the 'Wow' at gas pump

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Eye-popping profits are nothing unusual to oil-industry executives.

So when an internal Shell Oil memo detailing its springtime refinery profits is prefaced by a single exclamation — "Wow" — you know the money the company is making must be truly stratospheric.

The document shows the company refinery in Anacortes is yielding financial returns this year nearly four times higher than Shell's goals for the plant.

The April 5 memo also shows Shell makes 20 cents per gallon more refining gasoline there than it does in Texas. As it happens, you, the Seattle-area driver, pay about 20 cents per gallon more at the pump — taxes excluded — than people do in Texas.

"The higher gas prices in the West are pure profit to oil companies," says Tim Hamilton, a former gas-station owner who says the memo was leaked to him from within the oil conglomerate.

"They blame OPEC, or environmental regulations, or the cost of doing business. Yet their own documents show where the money is going: to the guy in the limo in Houston," Hamilton says.

Shell officials say the memo covers a short period when oil prices rose sharply. Those profits are real, but it's an up-and-down business, they say.

They add they're disappointed Hamilton got his hands on private papers.

It's a good bet they're sorry Hamilton exists at all.

From tiny McCleary, a 1,454-person town west of Olympia, Hamilton runs a one-man campaign to convince the citizens of the West that we are being gouged at the pump.
 
He's been at it for 20 years, as a paid consultant for consumer groups and a lobbyist for gas-station owners. His thesis is incendiary and difficult to prove: Since the industry was deregulated in 1981, big oil has restricted the Western gas supply to drive up prices.

The companies deny it. In 2001, after the Federal Trade Commission accused BP of shipping oil to Asia to "short the West coast markets and elevate prices," an investigation eventually cleared big oil of any legal wrongdoing.

Still, with doggedness that he admits borders on craziness, Hamilton keeps digging up stuff that makes you wonder.

Like the Arco memo he unearthed from the 1980s that outlined a strategy of closing half the West Coast refineries to reduce the gas supply. Arco's "reward" will be "a lasting period of quite acceptable profitability," it concluded.

Maybe Hamilton is peddling a conspiracy theory. But the Arco plan essentially came to pass. Twenty years ago, the West Coast had 42 refineries, owned by numerous competing outfits. Today it has 17, owned by a few megacompanies.

And the West Coast has the nation's highest gas prices.

Though he's a Republican, Hamilton, 54, favors direct government intervention to prevent big oil from closing refineries. A less intrusive idea: Set up a gasoline reserve to help out when supplies are scarce and prices spike.

He's considered giving up the "long, hard fight" — after all, he says, he is losing. "But I want to keep at it until people wake up and pay attention."

He laughed.

"Maybe that means I'm going to do this until I die."

Danny Westneat's column appears Wednesday and Friday. Reach him at 206-464-2086 or dwestneat@seattletimes.com. More columns at www.seattletimes.com/columnists