Penalties for some Chevron flares would triple under bill in California Legislature

Something went wrong at the Chevron Richmond Refinery on Aug. 10, 2021, as sulfur dioxide was released into the atmosphere and ignited. Residents saw fire shooting above the tree line and a thick cloud of black smoke billowing over the refinery’s fence, smothering houses and businesses. The flare, which prompted the lowest level alert on the Community Warning System, could be seen as far as Petaluma. 

Flaring incidents at the refinery have increased sharply in recent years, though flaring is permitted only as an emergency measure. Bay Area Air Quality Management District data shows that from 2008 to 2018, Chevron’s annual flaring incidents were in single digits. That changed in 2019, when the number hit 39, and it has been in the double digits since then, with 23 incidents last year. 

Frustrated with frequent flaring incidents at Bay Area refineries, Assembly Member Buffy Wicks introduced a bill that would triple air pollution fines for refineries and other large manufacturers. On June 1, the bill passed the House with a 51-15 vote but is still being debated in the Senate. It faces stiff opposition from the oil and gas industry and its lobbyists, who in the last 10 years have successfully killed three proposals in the Legislature to increase fines for refineries. And environmentalists are skeptical about the impact such a bill would have. 

Flaring happens to keep an underlying hazard from becoming a catastrophe. When vessels become highly pressurized, risking an explosion, the refinery opens a valve and dumps the high pressure, high temperature gasses into the atmosphere and ignites them, releasing substances such as sulfur dioxide, carbon dioxide, polycyclic aromatic hydrocarbons, dioxins, metallic complexes, and hydrogen sulfide into the air.

In some of the most severe flaring incidents, the sounds of explosions can come in bursts out of refinery flare tips, and the sound waves can even shake nearby houses. At night, it can look like the refinery is on fire. 

“When it happens for that minute or two, most of us can’t hold our breath any longer than that,” said Greg Karras, an independent consultant in the energy manufacturing sector.  During the Aug. 10, 2021, incident, the Richmond refinery flared for 31 minutes.

“There’s always an acute exposure to the toxic stew or whatever has been flaring,”  Karras added. 

Lower level violations come with fines of up to $10,000 and don’t require the enforcement agency to find evidence of negligence or public impact. Wicks’ bill would triple those fines to $30,000. To issue fines of up to $100,000, the enforcement agency has to prove that the company acted with negligence, willfully violated the law, or that its pollution harmed someone. If the bill passes, that fine could reach $300,000.

The biggest obstacle

Wicks attempted to raise penalties for refineries last year in a bill that would have increased fines to $100,000 for multiple air pollution violations in one year. Breathing in such contaminated air can cause premature deaths — a BAAQMD study released in 2021 attributed five to 12 premature deaths per year to baseline particulate matter emissions of 2.5 from the Chevron refinery.

But Western States Petroleum Association, a lobbyist representing the majority of refiners in California including Chevron, said Wicks’ earlier bill unfairly targeted refineries. Lawmakers apparently agreed with the oil industry’s position, adding last minute amendments which weakened the bill so significantly that Wicks withdrew her support.

“The biggest obstacle is the oil and gas industry,” Wicks said. “They’re a powerful force in California politics. I don’t know if California wants to admit that.”

The WSPA also is opposed to the current proposal, saying again that the fine increases would unfairly target refineries. 

“A violation is a violation,” said WSPA spokesperson Kara Greene. “The air doesn’t care where pollution comes from, so we took a stance that we wanted the penalty to be consistent.” 

Wicks conceded that point and amended the bill to increase air pollution fines for other large industrial facilities like factories and trash incinerators. The Senate is now considering the amended bill.

“My hope is that it has teeth, but I also want to get things passed,” Wicks said.

The WSPA is lobbying for the inclusion of additional criteria — if the incident increased hospitalizations, called for a shelter in place or evacuation order, or damaged property — in order to issue a triple penalty fine. 

“Otherwise, we as a state have now empowered a regional non-elected district to triple penalties just potentially ad hoc and arbitrarily,” Greene said. (While the Air District’s board of directors is made up of 24 elected officials such as mayors and supervisors, voters do not directly elect those board members.) 

In the first quarter of this year, the WSPA spent over $2 million against bills regulating the oil and gas industry. Chevron spent about $5 million on lobbying in the same period, according to California lobbying records. In comparison, BAAQMD spent around $67,000 on lobbying efforts supporting such bills.

On June 6, the Richmond City Council unanimously approved a resolution in support of the bill, stating the Chevron refinery has failed to decrease the number of flaring incidents, “eroding public confidence in the effectiveness of existing fines and existing requirements for flare minimization plans.” 

Karras compared the current fines to a nickel parking ticket in their effectiveness. “It’s an oil company. Their profits are off scale, and so are their costs. So when they find it profitable to cut corners, that kind of a wrist slap is just not effective,” he said. 

Alan Abs, BAAQMD’s legislative officer, agreed. “You think about some of these events that you read in the papers at refineries and where the public is significantly impacted in various ways, and then you think about a maximum $10,000 fine that occurs as a result of that, you can conclude that the actual fine really hasn’t met the level of what the facility did or the burdens that it caused on that local community.” 

Making the industry work better

Karras said refineries sometimes choose the quick fix of a flare instead of slowly depressurizing and taking a unit offline for repairs. Refineries can make millions in profit from gas production by avoiding a dayslong shut down, making a $10,000 fine insignificant.

“A lot of times these violations become a cost of doing business,” Abs said. “And so what we’re trying to do as part of this bill is really raise the cost of those penalties, so that they more fairly equate to the harms that have been caused by these refineries.”

BAAQMD, which wrote the bill with Wicks, would enforce the new regulations if passed. Typically, when BAAQMD becomes aware of an incident, inspectors are sent to the facility to review data, permits, and logs to determine if there was a violation of air quality laws. The district then works with the refinery to determine appropriate fines or settlements.

“At some point, you need to settle the violation in a way that you know is going to make that industry work better,” Abs said.  

But BAAQMD, seriously restricted by low fine caps, limited resources, and a practice of negotiating fines with violators to get their compliance, admits that it hasn’t been able to encourage refineries to operate better or to expose residents to less pollution. There have been 92 flaring incidents from the Bay Area’s five refineries in the past three years. It’s why BAAQMD is turning to the Legislature in hopes of increasing its — along with the California Air Resources Board and state Attorney General’s Office — ability to go after refineries for pollution violations. 

Karras is optimistic that the bill could target clear violations where there is a consistent and routine pollutant, such as particulate matter emissions from a continuous smokestack release. He says refineries would likely make changes to their systems, like updating machinery or fixing pipes, to avoid penalties and maximize profits. But this only works if the cost of stopping the pollution is cheaper than the fine.

The bill, however, likely would do little to deter flaring, Karras said.

“Flares are actually permitted for use in an emergency, so no matter how much or how often Chevron flares, the air district can’t bust them unless the district can prove that it was not an emergency and that Chevron was flaring when they didn’t need to flare,” he said. 

Abs thinks that tripling the penalties is a good start, not the ending point.

“I think it’s made an impact already because the oil industry and their representatives at the Capitol, the Western State Petroleum Association, are adamantly opposed to the bill and have been working it pretty hard. And so I think that tells you right there that it’s something that they’re worried about,” he said. 

The bill recently passed the Senate Environmental Quality Committee and has to pass both the judiciary and appropriations committees before it can reach the Senate floor. 

(Top Photo: Screenshot from an ABC7 San Francisco video of the Aug. 10, 2021, flare at the Chevron Richmond Refinery.)

County contractor signs off on Chevron spill investigation, saying the company ‘took the incident very seriously.’