Tag Archives: California Assembly Bill 32 (AB32)

Bay Area Air Board emissions plan draws response from Valero

Repost from The Benicia Herald
[Editor: The Benicia Herald is one of very few news outlets to cover the Bay Area Air Quality Management District’s far-reaching  and highly significant December 17 initiative on refinery emissions.  The first Herald article just covered the facts, and oddly, is not posted on the Herald’s website.  As a follow-up to that story, our local newspaper either sought out comments from the Refinery or responded to Valero’s overture, not sure which.  Either way, we were treated on Christmas Eve to a front page Valero Benicia promotion of its wondrous efforts to control its emissions, and the supposedly small part Bay Area refineries play in contributing to greenhouse gases.  Note especially Valero’s resolve to “participate in any new rulemaking to ensure rules are reasonable and cost effective.”   Reasonable rules would surely protect community health and safety, no?  And according to whose costs should regulatory effectiveness be weighed?   For other reports on the Air District initiative, see The Contra Costa Times, and the Oil & Gas Journal. See also primary documents: BAAQMD 12/17 agenda, (p. 73), and  REPORT: Bay Area Refinery Emissions Reduction Strategy (PDF) .  – RS]

Emissions plan draws response from Valero

Refinery official: ‘Proud’ to contribute to better air quality
By Donna Beth Weilenman, December 24, 2014

The Bay Area Air Quality Management District is hoping its new five-component strategy will reduce emissions from refineries in it geographic area.

The district’s Refinery Emissions Reduction Resolution, approved Oct. 15, sets a goal of 20-percent reduction in refinery emissions — or as much as is feasible — during the next five years.

The Bay Area Air Quality Management District is the regional agency responsible for protecting air quality in the nine-county Bay Area.

The announced strategy would show the Air District how to achieve that goal.

“Our new Refinery Emissions Reduction Strategy continues and reaffirms the air district’s commitment to significantly decrease harmful air pollution in our communities,” said Jack Broadbent, the district’s executive officer.

“This strategy will ensure that refineries are taking the strongest steps to cut emissions and minimize their health impacts on neighboring residents and the region as a whole.”

But refineries are just one industry that contributes to the San Francisco Bay Area’s air pollution and greenhouse gas emissions, according to an official at Valero Benicia Refinery.

“By the district’s own data, Bay Area refineries make up only a small segment of overall emissions in the Bay Area air shed,” said Chris Howe, the refinery’s director of health, safety, environment and government affairs.

“These emissions have continued to decline over the last two decades,” Howe said, data which the Air District also acknowledged.

“We are proud of the significant contributions our refinery has made and will continue to make to improve air quality, especially with the installation of our flue gas scrubber in 2011,” Howe said, citing a major component of the Valero Improvement Project.

In addition, he said, “We will continue to participate in any new rulemaking to ensure rules are reasonable and cost effective when weighed against the many options the district has to regulate emissions in our air basin.”

Broadbent said the Air District’s announced strategy sets overall goals of a 20-percent reduction in both criteria pollutants from refineries and in health risks to area communities, both within the next five years. That is the strategy’s first component.

To do this, the Air District plans to investigate significant sources of those pollutants at the refineries themselves, and to examine a variety of additional pollution controls at those sources, he said. That’s the second component.

He said this would be done under the district’s focused Best Available Retrofit Control Technology program.

“Rulemaking is already under way to reduce sulfur dioxide from coke calciners and particulate matter from catalytic cracking units,” Broadbent said.

“Several other rules to reduce refinery emissions will be developed in 2015.”

The strategy’s third component would be the Air District’s approach to reduce health risks from toxic air pollution, Broadbent said.

He said it would begin with requirements to reduce toxic emissions from such refinery sources as cooling towers and coking units.

Site-wide health risks would be assessed, and sources for further emissions controls would be identified, with an eye toward health benefits, he said.

A fourth component would be evaluation of greenhouse gas emissions at the refineries and their reductions as a result of the cap-and-trade system put in place under Assembly Bill 32.

That bill, signed into law Sept. 27, 2006, requires the California Air Resources Board (CARB) to develop regulations and market mechanisms to reduce California’s greenhouse gas emissions to 1990 levels by the year 2020.

CARB adopted a cap-and-trade program Dec. 17, 2010, allowing some emitters to buy credits at quarterly auctions for additional emissions.

Under the Air District’s strategy, refinery performance would be compared to third-party standards for best practices, with analysis of potential further opportunities for reductions, Broadbent said.

The fifth component concerns continuous improvement in emission reductions, for which refinery operators would be required on a periodic basis to evaluate the sources of most of their emissions to determine if more controls are needed.

Broadbent said the Air District would develop its package of rules in the coming year, and would be working with members of the public as well as refinery industry representatives to make any modifications in the proposed rules and to use the strategy to reach those stated goals.

In addition, the Air District will prepare its Petroleum Refining Emissions Tracking rule that requires updated health risk assessments, additional fence-line and neighborhood monitoring capacity and the compiling of an annual emissions inventory.

Simultaneously, the Air District will write a companion rule to set emissions thresholds and mitigate potential increases at refineries, Broadbent said.

Those rules are expected to be sent to the Air District’s board for adoption in 2015.

The San Francisco Bay Area’s five major oil refineries, including Valero Benicia Refinery, produce air pollution and greenhouse gases in the region, Broadbent said, and “these are already subject to more than 20 specific Air District regulations and programs, and their overall emissions have been steadily decreasing.”

The Air District’s website is www.baaqmd.gov.

    East Bay projects are redefining refineries

    Repost from The Contra Costa Times
    [Editor: a shorter version of this article appeared in The Vallejo Times-Herald with byline Robert Rogers.  This seems to be a re-write by Tom Lochner and Rogers.  Interesting to see analysis of all five refineries in the Bay Area, labeled the “Contra Costa-Solano refinery belt, California’s largest.”  Good quotes from our colleagues Tom Griffith and Antonia Juhasz.   – RS]

    East Bay’s oil refineries look to the future

    Upgrades: Projects to allow flexibility to respond to changing energymarkets, but environmentalists raise concerns
    By Tom Lochner and Robert Rogers, September 24, 2014

    chevronThe East Bay’s first oil refinery opened in 1896 near the site of Porkopolis-of-the West, a defunct stockyard and slaughterhouse in the town of Rodeo. In the ensuing decades, four more East Bay refineries joined it, defining the region and powering its growth like no other industry.

    A century later, the Contra Costa-Solano refinery belt, California’s largest, continues to cast an enormous shadow over surrounding cities, influencing their politics, their economies, even their aesthetics. And at a time when fossil fuel seems like yesterday’s energy source, the Bay Area’s five refineries have all embarked on ambitious projects to transform the way they do business — and ensure their economic viability in a rapidly changing global energy market for decades to come.

    These projects, if seen to completion, will diversify the refineries’ operations by allowing them to process both dirtier, heavier oil and cleaner, lighter crude. Two refineries are looking to build their future, at least in part, on crude-by-rail operations, expanding available sources of petroleum while intensifying a controversy over whether that transportation method endangers East Bay communities.

    All told, the upgrades will generate a collective investment in the East Bay of more than $2 billion, while adding hundreds of construction jobs. And once they are completed, proponents say, the projects should result in a substantial combined cut to greenhouse gas emissions, even though many environmentalists remain unsatisfied.

    “While some of these local refinery projects promise to reduce greenhouse gasses, or pollution in general, that’s not nearly enough,” Tom Griffith, co-founder of Martinez Environmental Group, said in a recent email. “And it’s arguable given the cumulative costs.”

    Catherine Reheis-Boyd, president of the Western States Petroleum Association, said oil companies are looking to increase efficiency through these refinery projects while meeting the state’s stricter environmental requirements — not an easy balancing act.

    “They want to continue to supply California. And they want to contribute to the economy of the state,” she said. “What’s different right now is, a lot of the policies being contemplated in California, either at the state level or locally, are making it more difficult to achieve that. The biggest thing is, how do you balance our energy policy with our climate change policies?”

    Even without the new projects, the five East Bay refineries are a critical part of the local economy.

    In 2012, Chevron, Tesoro, Shell, Phillips 66 and Valero processed a total of about 800,000 barrels a day of crude oil, providing more than 7,500 direct jobs, according to industry sources. The oil and gas industry as a whole in the Bay Area generated $4.3 billion that year in state and local taxes, plus another $3.8 billion in federal taxes, according to an April 2014 Los Angeles County Economic Development Corporation study commissioned by the Western States Petroleum Association.

    The biggest project underway is at Chevron, a $1 billion investment to upgrade parts of its century-old 2,900-acre Richmond refinery allowing it to refine dirtier blends of crude with no increase in greenhouse gas emissions, according to the project application.

    Tesoro’s Golden Eagle refinery, near Martinez, has spent nearly as much on upgrades since 2008, and other projects are underway at Shell in Martinez, Phillips 66 in Rodeo and Valero in Benicia.

    ENVIRONMENTAL CONCERNS

    While these sweeping investments offer the promise of new jobs and cleaner, more efficient operations, many environmentalists complain that they don’t go far enough to curb emissions of greenhouse gases that contribute to global warming by trapping heat in the lower atmosphere, and sulfur dioxide and other pollutants that can cause serious health problems in people in surrounding communities.

    And others warn that the improvements will smooth the path for highly flammable crude oil from North America’s Bakken shale region to the East Bay on railroad lines, raising the specter of spectacular explosions from train derailments, as happened last summer in Lac-Mégantic, Quebec, where 47 people died. Those fears have dominated debate over a proposed rail terminal at Benicia’s Valero refinery.

    A growing number of detractors clamor for America to cast off the yoke of fossil-fuel dependency altogether and concentrate on efforts to develop cleaner, renewable energy.

    “The missed opportunity here is for the oil companies to refocus their sights on the future of renewable energy,” Griffith said.

    That aim, albeit more gradual, is the policy of the state under Assembly Bill 32, the California Global Warming Solutions Act of 2006. The legislation calls not only for reducing greenhouse gas emissions but also for reducing the state’s dependency on petroleum.

    The refineries take that as a challenge but not a death warrant.

    “The industry clearly thinks these refineries are here to stay and wants them to adjust to the changes of the makeup of the world’s oil supply, which is dirtier, more dangerous oil,” said Antonia Juhasz, an oil and energy analyst and author of the book “The Tyranny of Oil.”

    Juhasz cited Canadian tar sands oil as the prime example of dirtier crude, and pointed to oil from the Bakken shale formation, mostly in North Dakota, as the prime example of the more dangerous variety.

    Scott Anderson, a San Francisco-based senior vice president and chief economist for Bank of the West, agrees that the increases in renewable energy sources pose no threat to the future of oil refineries locally. In fact, he says, increasing global demand for refined oil products makes refineries like those in Contra Costa and Solano counties an “emerging growth industry for the U.S.”

    “Demand is going to continue to increase, and there haven’t been any new refineries built in the U.S. in decades. So what we’re left with is these projects in existing refineries designed to improve efficiency and flexibility,” he said.

    Here is a look at the major projects underway:

    • At Tesoro’s Golden Eagle refinery, one of the biggest shifts has been bringing in up to 10,000 barrels per day of Bakken crude, which company officials say is critical to replace other sources of petroleum.

    “Our challenge going forward is, as California and Alaskan crudes decline, to find replacements that keep the refinery a viable business,” General Manager Stephen Hansen said.

    “One of those crudes is in the midcontinent, and the only way to get it here is by rail,” he added, noting that the refinery receives crude from ship, pipeline and truck after offloading it from rail cars in Richmond.

    The refinery’s nearly $1 billion in capital upgrades since 2008 have focused not on increasing capacity but on using a wider variety of crude blends and processing them more efficiently, cleanly and safely. A $600 million replacement of the refinery’s coker, for example, has reduced annual carbon dioxide emissions by at least 400,000 tons, according to refinery officials.

    • Shell’s Martinez refinery is seeking to shift some of its refining capacity toward lighter crudes, which it says will allow it to trim greenhouse gas emissions. In phases over several years starting in 2015, the refinery would build processing equipment and permanently shut down one of two coker units, resulting in a reduction in greenhouse gas emissions by 700,000 tons per year.

    Shell spokesman Steve Lesher said the project involves replacing equipment, not expanding the facility beyond its 160,000 barrels per day. He also said the refinery currently processes heavier oil from the San Joaquin Valley but will be bringing in oil from other, as-yet-unidentified sources.

    • Phillips 66 in Rodeo, the region’s oldest refinery, hopes to start recovering and selling the propane and butane that are a byproduct of its refining process, rather than burning them off in a highly polluting process called flaring or using them as fuel in refinery boilers.

    The project would add new infrastructure, including a large steam boiler, propane and butane recovery equipment, six propane storage vessels and treatment facilities and two new rail spurs.

    Phillips 66 has said the project, which was approved by the county Planning Commission in November, would reduce emissions of sulfur dioxide by removing sulfur compounds from refinery fuel gas, and reduce other pollutants and greenhouses gases, but those assertions have been questioned by environmentalists and the Bay Area Air Quality Management District, which wants further evaluation before signing off.

    Two groups have filed an appeal to overturn the Planning Commission’s approval, and in what might be a first for the region, the air district is requiring that the project’s emissions and possible health effects must be considered cumulatively with other refinery-related projects in the Bay Area.

    • Chevron’s plan, which received City Council approval in July after months of intense public debate, is touted as an important upgrade in an increasingly competitive global petrofuels market. While other refineries are gearing up to exploit the North American oil boom, Chevron will continue to get the bulk of its oil from the Persian Gulf and Alaska.

    But the new modernization plan approved in July would allow the refinery to process crude oil blends and gas oils with higher sulfur content, which refinery officials say is critical to producing competitive-priced transportation fuels and lubricating oils in the coming decades.

    In addition, it would replace the refinery’s existing hydrogen-production facilities, built in the 1960s, with a modern plant that is more energy-efficient and yields higher-purity hydrogen, and has the capacity to produce more of it.

    • Valero Refining wants to build a $55 million crude-by-rail unloading facility at its Benicia refinery that could handle daily shipments of up to 70,000 barrels of oil transported in two 50-car trains daily from sources throughout North America. That plan has drawn sharp criticism from locals and leaders in Sacramento concerned about the hazards of increased rail shipments.

    The project would not increase capacity at the refinery but replace crudes that are currently delivered by ship. Nor would it increase emissions from refinery operations, according to a project description on the city of Benicia’s website. The document also cites an air quality analysis indicating that rail cars generate fewer emissions locally than marine vessels.

    The latest projects, while still drawing criticism, have turned some critics into allies. Henry Clark of the West County Toxics Coalition, who played a leading role in getting millions of dollars in settlements for North Richmond residents stemming from a chemical spill linked to the Chevron refinery in the early 1990s, has come out in support of the Chevron modernization.

    “After all the negotiation and community input, we have a better project than we ever expected,” Clark said. “Fenceline communities like North Richmond are going to be next to a safer, cleaner facility and get to share in millions in community benefits.”