Refinery towns draw lessons from Chevron project

Many Bay Area refineries, including Chevron, are in the midst of major upgrades. Click on the cities to hear different perspectives on the various oil projects happening in the Bay Area. (Map and videos by Sally Schilling. Pittsburg video produced by Sally Schilling and Emily Gibson.)

Environmentalists and workers unions are keeping a careful eye on Chevron’s Revised Modernization Project. Unions are anxiously waiting for the skilled labor jobs to finally become available when the project is approved. A coalition of environmental groups, on the other hand, is on guard for a repeat of 2010, when, they say, Chevron had deceived regulators in its Environmental Impact Report.

More than a hundred people, many who live and work in refinery towns, showed up at the Bay Area Air Quality Management District’s meeting last week. They filled the meeting room and an overflow room. Others waited outside in the chilly morning air. They wanted to weigh in on the big decisions ahead for the district regarding refineries in the Bay Area.

Next year the air district, which oversees industrial emissions and air quality standards, will finally vote on whether to grant Chevron a permit for its Revised Modernization Project.

Chevron is not the only refinery that’s currently modifying its facilities. Valero in Benicia, WesPac Energy in Pittsburg and Phillips 66 in Rodeo are also in the midst of securing permits for major projects. [Click the cities on the map for details of these projects.] And the residents of other refinery towns are drawing lessons from Richmond’s handling of Chevron’s Modernization Project, which has faced some hurdles in complying with environmental standards.

The Chevron project was approved in 2008, but was then halted in 2010 when a local environmental justice activist organization, Communities for a Better Environment, brought a lawsuit against the City of Richmond and Chevron. An appeals court ruled against Chevron, finding that the company did not properly disclose whether the project would enable the processing of heavier crude oils, which would potentially lead to higher emissions.

Chevron maintained that it never intended to process heavier crude oils, but in its 2007 annual report filed with the Securities and Exchange Commission processing heavier crude was precisely the goal of the project. Chevron reported the project was intended “to increase the flexibility to process lower API-gravity crude oils.”

The court found this discrepancy unacceptable. The judge ruled, “Far from being an informative document, [Chevron ‘s Environmental Impact Report] call for blind faith in vague subjective characterizations.”

After losing the case, Chevron scaled down its plans. Chevron’s revised project includes a new hydrogen plant and improved sulfur recovery units. The company says the project will enable the processing of crudes with higher sulfur content, but not “heavier” crudes.

“The project does not change the operation or the basic function of the refinery,” said Walt Gill, Chevron Richmond’s Government Affairs Manager. “It is not about refining heavier crude, as the project won’t change the range of crudes that we’re able to process.”

But environmental groups are not taking Chevron’s word for it. They’re urging Chevron and the air district to fully disclose the intent of its project in its new Environmental Impact Report.

“We’re asking for some proactive leadership from the air district so that community groups don’t have to face the situation that we had to go through,” said Nile Malloy, program director with Communities for a Better Environment.

Other communities are now enlisting the help of Malloy and his group to insure their own projects meet all safety and environmental standards.

In Benicia, the Valero refinery is proposing a new train terminal to receive more crude oil by rail. In Rodeo, the Phillips 66 refinery is in the process of getting a permit to capture byproducts of refining — butane, propane and sulfur — instead of burning them off, or flaring. In Pittsburg, WesPac, a petroleum company, is planning on building a major oil storage and transfer facility. The facility will store crude brought in by train and ship, and transfer crude to all Bay Area refineries except Chevron, according to the project EIR.

Several union members spoke about the benefits that the construction jobs will bring to local union workers.

The production of North American crude oil is increasing and the economic benefits of the projects will certainly be felt by the Bay Area, said Craig Johns, with the Western States Petroleum Association, an oil lobby group.

“This resurgence in energy production has refueled a revival in American manufacturing, job creation and economic growth,” Johns said. “It is in this region’s interest to have the infrastructure in place to be able to safely and fully benefit from this increased crude oil production.”

Chevron’s Environmental Impact Report is expected to be published by early February.

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