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State refinery safety bill hailed by legislators draws concern from a free speech group

on September 19, 2014

A new bill aimed at increasing transparency in California oil refineries has an unexpected opponent –a free speech rights group.

The First Amendment Coalition raised concerns over SB 1300, a bill they claim will actually allow oil companies to hide some information as “trade secrets.”

“It sets a dangerous precedent,” said Peter Scheer, the coalition’s executive director. Scheer said the bill paves the way for turnaround procedures–which involve shutting down parts of the refinery for repair, maintenance and inspection — to be defined as confidential trade secrets.

Authored by State Sen. Loni Hancock, SB 1300 will ensure the state Division of Occupational Safety and Health Administration (Cal-OSHA) has access to the refineries’ corrosion reports, work orders and safety procedures, including detailed reports of some work done during turnarounds. The legislation was prompted by renewed scrutiny of refinery safety, sparked by a major fire at Richmond’s Chevron refinery in 2012. A subsequent federal investigation found questionable maintenance practices and inadequate regulatory oversight, a systemic problem that could imperil safety at the other four refineries in the Bay Area as well.

But the coalition sees the new law as giving further power to oil companies. Scheer said the bill should concern Californians worried about refinery accountability.

“After being designated a trade secret, the agency is forbidden from releasing it,” Scheer said. “The agency is read to notify the oil company and authorized to sue you.”

Turnarounds can be among the most dangerous of refinery procedures. While the initial shutdown of machinery is rarely a concern, startup after the turnaround process can be particularly hazardous. According to the Center for Chemical Process Safety, “process safety incidents occur five times more often during startup than during normal operations.”

The EPA has attributed several major refinery accidents, including the fatal Texas City Refinery Explosion of 2005, to faulty procedures immediately after a turnaround.

Barring a veto by Gov. Brown, the bill will require refineries to provide “a full schedule for the following calendar year of planned turnarounds” and “require a petroleum refinery employer, upon the request of the division, to provide access onsite and provide the division with specified documentation relating to a planned turnaround.”

Aimed at increasing transparency between Sacramento and oil companies, SB 1300 is part of an effort to further involve the state in the safety of the facilities. Singling out the August 2012 fire in Richmond, which sent thousands to area hospitals, Hancock stated on her website that “… the Chevron Refinery explosion and fire testifies to the need for more oversight, and we are determined to learn from the past so that we don’t repeat it.”

A Chevron spokeswoman did not respond to a request for comment on Friday.

Hancock denies that the bill gives far-reaching power to oil companies. In a column in the Contra Costa Times, Hancock wrote that a bill without defining turnarounds as a trade secret would have permitted other companies to “game the system” and manipulate their business practices to gain an advantage during another refinery’s turnaround period.

But Hancock maintains that the new law makes refineries more transparent.

“Oil companies will be required to turn over new information that is needed to protect workers, the community, and the environment, if this bill becomes law,” Hancock wrote.

Scheer sent a letter to Brown demanding the veto of the bill. In a recent article published on the coalition website, he described SB 1300 as a step toward limiting access to public records.

“Ordinary citizens certainly won’t be able take this risk,” he wrote. “News media certainly won’t take this risk. The (public records requests) will simply be a dead letter so far as oil company records on refineries are concerned.”

Turnarounds are not only difficult undertakings, but also time-consuming and reduce supply of petroleum products. In other words, turnarounds are deemed a trade secret to protect oil companies from competing petroleum interests because advance knowledge of their schedule could allow speculators to drive up the price of oil.

Larry Levin, a spokesman for Hancock, specified how such a scheme could work.

“If other speculators knew in advance that an oil company was shutting down for a turnaround,” he said, “They could manipulate the market and their own oil could become more valuable.”

Regardless of the opposition, state leaders are determined to push for further oversight of refineries, five of which are located in the Bay Area. A February report co-authored by a 13-agency group known as The Interagency Working Group on Refinery Safety, emphasized the 2012 fire and chemical release and stressed that sweeping regulatory changes are needed.

Still, Scheer sees SB 1300 as a failure of administrative oversight.

“(Hancock) wants to do it for all the right reasons,” he said, “but all the problems with the bill are all 11th hour amendments. She is not showing them to organizations who care about this issue.”

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