Exxon, other refineries affected as Louisiana waters rise

Repost from Bloomberg News
[Editor: You can count on the oil industry to prevaricate. The Baton Rouge Advocate reports that ExxonMobil released a statement disputing this Bloomberg report. “‘Contrary to some reports, the ExxonMobil Baton Rouge Complex is operating. It is our practice not to comment on specific unit operations at our facilities,’ the company said.”  – RS]

Exxon Said to Slow Louisiana Refinery as People Escape Flood

By Barbara J Powell & Brian K Sullivan, August 17, 2016 6:13 AM PDT, Updated 4:14 PM PDT

• Fourth-largest U.S. refinery affected as waters rise
• Louisiana is home to about 18% of U.S. refining capacity

Exxon Mobil Corp. curbed operations at the fourth-largest U.S. refinery as record flooding in Louisiana shut roadways, sent tens of thousands fleeing from their homes and threatened the state’s oil infrastructure.

The Baton Rouge refinery along the Mississippi shut four production units and idled others when the flooding threatened an offsite liquefied petroleum gas storage facility and pumping station, a person familiar with operations said early Wednesday. The refinery can process 502,500 barrels of crude a day into gasoline, diesel and other fuels.

At least 11 people have died, 30,000 people rescued and 40,000 homes have been damaged as almost 2 feet (61 centimeters) of rain fell in parts of southern Louisiana, the Associated Press reported Wednesday. Flood warnings extended across much of the southern portions of the state with many bayous and rivers still at dangerous levels. Louisiana is home to about 18 percent of U.S. refining capacity, according to Energy Information Administration data.

Pipelines, Terminals

Most in danger from direct disruption from flooding is the support infrastructure consisting of pipelines, terminals, salt caverns and above-ground pumping stations, said Andy Lipow, president of Lipow Oil Associates in Houston.

“Those that supply support services to refineries could be in danger of shutting down, and that could impact refineries’ operations,” Lipow said.

Todd Spitler, an Exxon spokesman, said the refinery is operating. The company doesn’t comment on specific unit operations and has continued to meet contractual commitments, he said

Through Tuesday, Baton Rouge had received 22.11 inches of rain since the start of August, more than 19 inches above normal, according to the National Weather Service. New Orleans got 7.46 inches, or 4.35 above normal; Lake Charles had 11.22 inches, or 8.69 above normal; and Lafayette logged 23.19, or 20.81 higher than the 30-year average.

Governor John Bel Edwards declared an emergency on Friday. Residents in 20 parishes are eligible for federal assistance and in two days 39,000 people have registered, the Governor’s Office of Homeland Security and Emergency Preparedness said.

Motiva Convent

Motiva Enterprises LLC said in an online message to employees Wednesday afternoon that it will staff its Convent refinery, about 38 miles southeast of Baton Rouge, with only essential personnel through at least Sunday. The company had previously said the restriction would last until Wednesday.

Angela Goodwin, a Motiva spokeswoman, didn’t immediately respond to a request for comment. She said Tuesday that operations at Motiva’s Convent and its Norco refinery, about 38 miles to the south, are stable.

Gulf Coast fuel prices climbed early Wednesday on the prospect of refinery outages. Ultra-low sulfur diesel strengthened 1 cent to 2.75 cents below New York Mercantile Exchange futures, the narrowest discount since November 2014, according to data compiled by Bloomberg. Conventional gasoline gained 1.88 cents to trade near parity with futures for the first time in four days.

Lifting of trade restrictions has expanded crude oil’s reach

Repost from Bloomberg News

Here’s who’s buying up U.S. oil

By Sheela Tobben, August 17, 2016

U.S. crude oil is reaching all corners of the world, after a 40-year ban on exports was lifted at the end of last year.

More than 87 million barrels of crude and condensate have been shipped to 17 countries in the first half of 2016, based on Bloomberg calculations from Census Bureau data. Most has gone to Canada, which received 53.5 million barrels, followed by Curacao, which took 8.68 million, and the Netherlands with 6 million. Canada was already a customer, having been largely exempt from the limits.

Click to enlarge

The U.S. Congress and President Barack Obama agreed in December to end the trade restrictions, which were established after OPEC oil embargoes that crippled U.S. supplies in the 1970s.

Other buyers include the U.K, Japan and even the Marshall Islands, according to U.S. Census Bureau data.

“The data for shipments to the Marshall Islands could have been a mistake, those were probably tankers with the Marshall Islands flag,” said John Auers, executive vice president of Turner Mason & Co., a Dallas-based consulting firm. “It’s possible that those cargoes were headed for Asia.”

There are still many countries that have yet to buy any American oil this year. India, South Korea and Germany are among the top crude importers in the world, according to data from the Joint Organizations Data Initiative (JODI). Yet none has received U.S. crude after the ban was lifted.

Grant Cooke: Benicia’s future is with Patterson, Young and the new economy

Repost from the Benicia Herald

Grant Cooke: Benicia’s future is with Patterson, Young and the new economy

By Grant Cooke, August 17, 2016
Grant Cooke
Grant Cooke

If Valero’s crude-by-rail, or CBR, project goes through, it will do irreparable damage to Benicia. If the three councilmembers—Mark Hughes, Christina Strawbridge and Alan Schwartzman— continue their support for the project, they will do an extraordinary disservice to the city.

I respect those who work on behalf of local government; however, in this case, the legacies of three pro-Valero councilmembers will be that when Benicia needed them, they stood down. They just didn’t have the vision or the ability to do what is right and best for the city.

While the same can be said for numerous elected officials in other American small towns, particularly those dominated by a fossil fuel company, it’s a painful thing to witness. What makes Benicia’s situation more painful, is that the city is gifted with a bright and forward thinking mayor and is nestled on the edge of the most innovative and financially robust center in the world.

Yet, the pro-Valero majority on the council mirrors the city’s self-inflicted company town identity. This fossil fuel dependence holds the city back from partaking in the Bay Area’s knowledge-based economy and its prosperity.

The company town malignancy is intensified by a remarkable and insulating geography that creates the city’s beauty. The town has an idyllic and picturesque quality that is enhanced by a touch of eccentricity and bohemian romanticism left over from the halcyon days of the Gold Rush.

This combination allows for a complacency in the social milieu that is on the one hand charming, but on the other, remarkably short-sighted. In fact, it’s just plain dumb, since it allows for the tacit acceptance of the status quo and masks the reality that problems are coming and action needs to be taken.

For a half-century, Benicia has allowed the refinery to prosper, hardly inhibiting its use of the atmosphere as a garbage can. For most of this time, the refinery has been the largest source of tax revenue, exercising dominant economic and political influence. Which is a pity, since the rest of the Bay Area embarked on a scientific, technological and economic renaissance that is unparalleled in human history.

Now, the era of carbon generated wealth and dominance is in decline, particularly in densely populated areas where growing number of residents are pushing back, protective of their health and well-being. Carbon-generated wealth, usually from extraction industries, is being overtaken by knowledge-based wealth. High-tech workers are transforming the communities throughout the Bay Area. Cities like Richmond that were mired in the death grip of the fossil fuel industry, are now undergoing gentrification and renewal.

So where does that leave Benicia? If the pro-Valero councilmembers have their way and Valero’s CBR project is approved, then the city will continue to be dependent on the refinery and the fossil fuel industry.It’s clear from the evidence that crude-by-rail transportation is unsafe, unhealthy, and disruptive, but it won’t matter if the project is approved and the 50-car trains take over the Industrial Park, cutting off access and exit for most of the existing businesses. Once the trains loaded with toxic and volatile Bakken crude start to roll, there will be no “do overs,” and the city’s future will languish.

There is no doubt that the fossil fuel and oil industries are in decline. Oil prices are dropping as too much supply hits the market. Renewable energy is cheaper, more plentiful and when connected to smart grids far more flexible and cleaner. Vehicles are getting more efficient and transitioning to hybrid, electric, and hydrogen power. The fossil fuel era with its environmental destruction, social and political upheavals, and corrupt power politics is winding down.

So by approving CBR, Benicia will be locked into a decline—all the while the rest of the Bay Area flourishes as the new knowledge-based economy expands.

As an interesting aside, in the last three months, Valero, Inc. made $19.6 billion in gross revenue and $87.8 billion for all of 2015. As part of the company’s second-quarter earnings announcement, Joe Gorder, Valero’s CEO, said “We are also encouraged by ample supplies of medium and heavy sour crude oils in the market…”

So, if there is plenty of supply, and the refinery’s current crude delivery process is creating substantial profits, why does the refinery still want to ship explosive Bakkan crude by trains through towns that oppose it? And why do they claim it’s necessary to bring it to a loading area with a potential blast zone that includes an elementary school?

Admittedly, Valero’s CBR project is not simple. There are key issues at stake, including the tax revenues versus the city’s right and responsibility to protect the health and well-being of its residents. Many people are involved to various degrees in the decision. Unfortunately, the town’s residents can’t vote on the project, since the decision is solely in the hands of the city council.

The pro-Valero CBR faction has tried to diminish the importance of the decision by claiming the opposition is simply a ruckus stirred up by passionate environmentalists opposed to Big Oil. The intent is to frame the local election, and opposition to the project, as simply a one issue ballot. But the reality is far different. It’s not merely a CBR issue, or whether the refinery is good or not for the city, but a clear and simple question of what is to be Benicia’s future? Will the city – pushed by the three pro-Valero councilmembers – be locked into fossil fuel’s decline, or will it have the wherewithal to step into the 21st century and join the Bay Area’s booming knowledge-based economy?

If Benicia is going to survive as a chartered city, it has to go where the future beckons, which is to the new economy. If it dithers, the city will be passed over, as the new economy leapfrogs to Vallejo and other cities along the Interstate 80 corridor.

Three decades in, the scientific and technological Renaissance is just getting started, powered by a steamroller of venture capital. Silicon Valley is awash with cash and opportunity, and the Bay Area’s great universities and national laboratories are brimming with patents just waiting for implementation. High-tech and green tech startups and businesses are growing exponentially each year. Chinese and other foreign buyers are trolling Northern California for the newest inventions and technology.

The Green Industrial Revolution will continue to grow, pushing out along the region’s main transportation corridors. Eventually it will extent from Palo Alto to Sacramento. Just as Apple overcame Exxon, the new economy will push out the fossil fuel industry in the Bay Area. Within a couple of decades, the Bay Area refineries will lock their gates, unable to withstand the shifts in the energy markets and the expenses of offsetting carbon emissions.

What the fossil fuel industries in the Bay Area—and by extension those cities that have cast their lot with them—are not realizing is that there is a generational and workforce shift taking place. The older work force who had a high tolerance for the fossil fuel and heavy industrial manufacturing industries are being overtaken by a tsunami of high tech workers. These young folks are sophisticated, intelligent and extremely sensitive to health and recreation. (Just visit San Francisco’s marina green on the weekend). Their lifestyles are far different than the established group. High-tech workers live in denser neighborhoods, drive efficient autos and take public transportation. (Visit Emeryville, or the area around Pleasant Hill’s BART station.)

Above all, tech workers have enormous amounts of money that is rapidly changing the real estate market and the Bay Area’s lifestyle. As these workers mature, they will pressure politicians for the things they value, which is certainly not carbon emissions or refineries.

Rarely in life does time and circumstance allow us to decide our fate. The future is often veiled and clouded, and usually clarity only comes with necessity, too often calamity. This is true for individuals as well as cities. Cities, especially small company towns, rarely have the visionary leadership and the ability to break loose from the status quo, until like Stockton or Vallejo they implode.

Benicia’s fate is remarkably unambiguous; stick with the old fossil fuel industry and go down with its decline, or join the Bay Area’s Renaissance and prosper. Throughout the world, other cities have faced much harsher realities and have been successful in transitioning to a new economy. Melbourne, Copenhagen, Berlin and Bristol leap to mind. In each, change was driven by strong visionaries who understood that change was the best option and who had the leadership skills to pull the cities and their residents forward.

Does Benicia have similar visionary leadership? That is clearly central to November’s local election. There are two councilmembers up for re-election—Tom Campbell and Christina Strawbridge. Mayor Elizabeth Patterson is being challenged by Vice Mayor Mark Hughes. Three councilmembers – Strawbridge, Hughes and Alan Schwartzman who is not up for re-election – favor Valero and its CBR project.

Mayor Patterson has shown time and again that she understands the dilemma the city faces and why its future lies with the new economy. She clearly has the vision, talent and leadership required to move the city forward, and should be re-elected. Councilmember Campbell also understands that Benicia’s future prosperity can’t be dependent on Valero’s CRB project and he should continue.

Steve Young, a new challenger for a council position possess exceptional talent and leadership skills, and clearly understands that the city’s best interests are to reject Valero’s CBR. As a member of Benicia’s Planning Commission, he spent countless hours on the issue, painstakingly doing the research and leading the commission through the pros and cons as each member came to agree that the CBR project was not the town’s best option.

Patterson and Campbell were outvoted by the three other councilmembers, and the council failed to accept the Planning Commission’s recommendation, instead giving Valero the opportunity to reopen the issue with the Surface Transportation Board. Cluttering the decision was some questionable recommendations from the city staff, goofy advice from a consulting attorney, and bullying from Valero’s high-powered lawyer. In short, the whole process reeked of the misinformation and strong-armed tactics so common when an oil company puts pressure on small town politics.

Given his remarkable dedication to Benicia and the work required to bring the whole CBR permitting process into the public light, Steve Young has clearly shown that he has the intelligence, talent and leadership skills needed to help the city transition away from the past and embrace the future.

For Benicia, come the November election, Mayor Patterson and Tom Campbell should be re-elected. Steve Young should be the newly elected councilmember.

Grant Cooke is a longtime Benicia resident and CEO of Sustainable Energy Associates. He is also an author and has written several books on the Green Industrial Revolution. His newest is “Smart Green Cities” by Routledge.

EPA says oil train operator violated federal Clean Air Act at Albany facility

Repost from Politico New York

EPA says oil train operator violated federal Clean Air Act at Albany facility

By Scott Waldman, 08/17/16 05:29 AM EDT
Railroad oil tankers line up in Albany, N.Y.
Railroad oil tankers line up in Albany, N.Y. | AP Photo/Mike Groll

ALBANY — One of the main companies that transports crude oil through New York has violated federal clean air standards and may face significant fines, according to U.S. Environmental Protection Agency documents obtained by POLITICO.

Last month, the EPA issued a notice to Global Companies LLC, saying the company violated the federal Clean Air Act at its oil transportation facility in Albany. According to the documents, Global could face fines of more than $25,000 a day and may have to obtain a new permit for one of its main East Coast shipping routes.

According to the EPA, Global intentionally under-reported air emissions at the facility when it was granted permission to almost quadruple the amount of crude it could transport through Albany.

In 2012, after Global received state permission to increase the amount of crude it transported through Albany from about 500,000 gallons a year to almost 2 billion gallons, the company reported an increase in air emissions of 39.5 tons per year of volatile organic compounds.

But after a months-long investigation, the EPA determined the amount Global reported was far less than what it was actually emitting.

The increase Global claimed is just under the 40-tons-per-year limit that would require a new set of air permits, and likely lead to costly equipment upgrades and additional project delays.

“Global violated the (Clean Air) Act and the federally enforceable New York state implementation plan by increasing the throughput of crude oil at its petroleum storage facility located at 50 Church Street, Albany, New York without complying with the new source review requirements of the New York SIP,” wrote Dore LaPosta, director of the Division of Enforcement and Compliance Assistance at the EPA.

Edward Faneuil, Global’s executive vice president, denied the facility was out of compliance.

“With respect to the Notice of Violation issued by the EPA alleging violations of the Clean Air Act at its Albany facility, Global Partners is in compliance with regulatory and permitting requirements at that facility, including requirements under the CAA,” Faneuil said in a statement Tuesday. “We remain fully committed to operating all of our facilities in a safe, legal and environmentally responsible manner, and we will vigorously defend ourselves against any claims to the contrary.”

Global needs to obtain air permits for the facilities it uses during the crude oil transportation process, which includes equipment to offload oil train tankers.

Albany has become a national hub for crude oil trains, which bring the product from North Dakota and transport it to refineries along the East Coast. Public scrutiny of oil train safety has increased after a series of accidents in recent years, including one in July 2013 that killed dozens of people in Canada. In Albany, the oil trains run on tracks that are located next to a public housing facility and have been stored adjacent to a playground.

On Wednesday, EPA officials will meet with local residents affected by the oil train surge in Albany.

The Cuomo administration has allowed the oil transportation companies to increase the amount of crude they bring through Albany. Since it received permission to increase the amont of oil it transports, Global has also sought to add a crude oil heater that would allow it to bring in thick tar sands. However, the state Department of Environmental Conservation has delayed a decision on that proposal and is now locked in a legal battle with the company.

Local residents, including many who live at the public housing project, have complained that emissions from the Albany facility are causing health problems. In 2014, state regulators determined that the air quality in the area was not harmful.

The EPA investigation echoes claims of a lawsuit filed earlier this year by Albany County and a coalition of environmental groups, which contend Global Companies failed to obtain the proper air permits for its crude-handling facility at the Port of Albany. In the lawsuit, the groups claim Global failed to install proper pollution controls when it increased the amount of crude oil handled at the facility.

View the EPA document here: http://politi.co/2bpiO6R

For safe and healthy communities…