By Roger Straw, December 22, 2016
Why did Valero decide not to go to court?
On December 20, Benicia’s City Attorney announced that she had been advised by Valero’s attorney that the refinery is no longer planning to sue the City of Benicia over its failed Crude By Rail proposal.
While this is welcome news, worthy of celebration and thanksgiving, Valero’s decision surely was more nuanced than the simple reason given, that it wants to maintain good relations with the City.
Everyone in the city is happy about that – we all want good relations, and no one wanted the issue to drag on in the courts, at great expense in time and money.
But it must be noted that a Benicia lawsuit by Valero would have failed, on multiple grounds. Valero’s best legal advice must have been to quit, or risk additional losses. That advice would’ve been resisted if at all possible, not only for local refinery interests, but on behalf of the wider oil and rail industries.
Valero Benicia was a potential precedent-setting case, with implications for major corporate financial holdings all across the US and Canada. There must have been immense pressure on Valero to sue. The industries needed to win a case claiming that federal preemption laws are enough to overrule local land use regulatory authority.
But with immense activist opposition setting the pace; with California’s Attorney General weighing in and a dozen environmental attorneys, engineers and environmental analysts offering significant commentary during the review process; and with the Federal Surface Transportation Board denying Valero’s last-ditch petition, a lawsuit had little chance of success.
Valero lost that argument here, but no one should rest easy. The oil and rail industries will surely look for another situation where they can more successfully press their unlimited right to endanger health and welfare under federal preemption laws.
The growing movement against oil trains needs to remain active and alert.
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