Tag Archives: Chevron Refinery

Closing of California’s 4th largest oil refinery will cost thousands of jobs

Shutdown of Marathon’s Martinez Refinery Prompts Calls for ‘Just Transition’ for Oil Workers

KQED News, by Ted Goldberg, Aug 3, 2020
A view of the Marathon Petroleum Corp. refinery in Martinez. (Tesoro)

Elected officials, union leaders, industry representatives and environmentalists are expressing concern about the hundreds of workers set to lose their jobs at California’s fourth-largest refinery in the coming months.

That’s after Marathon Petroleum announced over the weekend that it plans a permanent halt to processing crude oil at its Martinez plant.

“The decommissioning of the Marathon refinery means the loss of thousands of good paying, California blue collar jobs at a time of great economic uncertainty,” said Robbie Hunter, president of the State Building and Construction Trades Council of California, which represents thousands of people who work at the plant in the course of a year.

Marathon executives told employees at its Contra Costa County and Gallup, New Mexico, refineries on Friday that it plans to cut workers.

“We will indefinitely idle these facilities with no plans to restart normal operations,” the company said on its website.

The company had idled both refineries in April after shelter-at-home orders drastically cut demand for gasoline and jet fuel. That meant processing units at the plants stopped making transportation fuels and other refined products. For months the refineries have been maintained in “standby” mode.

The Friday announcement means “most jobs at these refineries will no longer be necessary, and we expect to begin a phased reduction of staffing levels in October” the company said on its website.

Marathon employs 740 staff workers at its Martinez refinery, which has gone through several owners and name changes. It was formerly known as the Tesoro, Golden Eagle, Tosco Avon and Phillips Avon refinery. Marathon bought the facility in 2018.

In addition to the full-time employees, the refinery relies on between 250 and 2,500 contract workers depending on operational needs, according to Marathon representative Patricia Deutsche.

“There is also the ‘multiplier’ effect. They say for every one refinery job there are eight in the community that support that,” Deutsche said.

“This move is a big loss for our workforce and potentially the economy,” said Rep. Mark DeSaulnier, D-Concord, who represents Martinez and has been a longtime advocate for refinery safety.

DeSaulnier said that before the coronavirus pandemic and the oil industry downturn, he began bringing together labor unions, environmental groups and local governments to prepare for a shift to green energy in Contra Costa County.

“The transition needs to be as successful as possible for everyone and we cannot leave workers behind — they need to be guaranteed meaningful and comparable work,” DeSaulnier said in an emailed statement Sunday.

A spokesman for a leading trade group that represents the oil industry in California said he feels for the local economy that relies on the refinery, which can process about 160,000 barrels of crude per day.

“Obviously, this impacts a lot of people, families and the community and we are concerned for them,” said Kevin Slagle, a representative for the Western States Petroleum Association.

The refinery has seen its share of incidents. The worst in the last decade took place in February 2014, when the facility was run by Tesoro. Two workers were burned and 84,000 pounds of sulfuric acid were released. A month later sulfuric acid sprayed and burned two contract workers, leading to an investigation by the U.S Chemical Safety Board that raised concerns about the refinery’s safety culture.

Like the Bay Area’s other four refineries — Valero in Benicia, Chevron in Richmond, PBF Energy in Martinez and Phillips 66 in Rodeo — the facility has had to send gases to its flares scores of times over the years, many times to deal with malfunctions.

Local environmentalists who’ve been critical of the region’s oil industry say it’s time for the refinery, its dangers and pollution to go away, but the change should include a plan for workers.

“This is what an unplanned transition looks like,” said Greg Karras with Community Energy reSource.

It’s “the tip of the iceberg for why we need a planned, just transition to sustainable energy and a livable climate,” Karras said.

Some environmentalists and union advocates have used the term “just transition” to explain a fair way of getting fossil fuel industry workers and their surrounding communities, businesses and local governments to move into a green energy economy.

Hollin Kretzmann, an Oakland attorney with the Center for Biological Diversity, said the air quality benefits of a refinery shutting down are welcome but expressed concern about workers.

“Communities near this dangerous refinery can breathe a little easier now that operations have halted, but the state desperately needs a just transition plan that protects workers when oil companies toss their employees to the curb with little warning,” Kretzmann said.

Marathon says its Martinez refinery will be converted to an oil storage facility. The company says it’s considering turning the facility into a renewable diesel facility.

“The Marathon refinery’s (potential) conversion into a renewable diesel facility is a forecast of the future as the demand for fossil fuels declines over time, resulting in healthier air and reduced greenhouse gas emissions,” said Contra Costa County Supervisor John Gioia.

“We will see more future refinery closures as a result of continued decreasing consumption of fossil fuels under California’s policies transitioning our transportation system to zero emission,” said Gioia, who sits on the the Bay Area Air Quality Management District board and the California Air Resources Board.

“We need to immediately start addressing a just transition for these workers as more fossil fuel facilities close,” he said.

Marathon’s decision to end oil processing at its Martinez plant is the latest piece of evidence showing California’s oil industry suffering under a pandemic that’s led to severe drops in fuel demand.

San Ramon-based Chevron, one of the world’s largest oil companies, announced its worst quarter in decades on Friday. The company said it lost more than $8 billion during the three months ending June 30.

“All the oil majors have been clobbered by COVID,” said David Hackett, president of Stillwater Associates, a firm that specializes in analyzing the transportation fuels market.

Earlier this month, the California Resources Corporation, one of the state’s largest oil producers, filed for bankruptcy.

In May, the Newsom administration granted a request by another oil trade group, the California Independent Petroleum Association, to drop a proposal to add dozens of staff members to the agency that oversees oil and gas drilling that would have cost the industry $24 million. State regulators also agreed to postpone a deadline for oil and gas producers to pay fees and submit plans to manage thousands of idle oil wells.

In April, PBF Energy, the New Jersey-based company that bought Shell’s refinery in Martinez, sold two hydrogen plants at the facility for hundreds of millions of dollars — a move aimed at cutting costs and raising revenue to deal with fuel demand drops.

That same month, more than 1,000 contract electricians, pipefitters and other skilled workers were cut from Bay Area refineries.

Chevron fined for air pollution at Richmond refinery

Repost from SFGate

Chevron fined for air pollution at Richmond refinery

By Kurtis Alexander, August 11, 2015 2:42 pm

Chevron has agreed to pay $146,000 in fines for spewing pollutants into the air at its refinery in Richmond, air quality regulators said Tuesday.

The penalty stems from 22 citations from the Bay Area Air Quality Management District mostly for discharging unhealthy levels of hydrogen sulfide and other harmful compounds through flaring, the process of burning off excess gas, common at industrial sites.

The refinery was also cited for excess carbon monoxide coming out of its furnace.

“Even though the incidents were minor and did not result in any significant impacts to people or the environment, we take these matters seriously, and have taken preventative measures to avoid similar situations from occurring in the future,” said Leah Casey, a spokeswoman for Chevron Corp., in an e-mail to The Chronicle.

The notices of violation were sent to Chevron between 2012 and 2014. The fines will support the air district’s enforcement work.

Contaminated Oil That No One Wants Is Heading to Asia: California allows rare export exemption

Repost from Bloomberg Business News
[Editor:  A local resident observed that the photo below was taken at the docks here in Benicia, California — home of Valero Benicia Refinery.  The Bloomberg story says that the contaminated oil originated with Chevron and was stored at Plains All American in Martinez.  But maybe there’s more to the story?  Maybe Valero was an additional source or storage facility for the ship’s contents?  My source says that the tanker Hellespont Protector has been seen about twice over the last few months, and is a new one around here. (Background on current efforts of the oil industry to overturn the 1975 U.S. crude-export ban.)  – RS]

Contaminated Oil That No One Wants Is Heading to Asia

By Lynn Doan and Dan Murtaugh, April 26, 2015 4:00 PM PDT
Hellespont Protector
Oil tanker Hellespont Protector, said to be chartered to export California oil, was anchored in the San Francisco Bay on April 20, 2015. Photographer: Lynn Doan/Bloomberg

One million barrels of oil. Enough to fill more than 60 Olympic-sized swimming pools. And there it sat in tanks outside San Francisco — for three years — despite crude prices that topped $100 a barrel.

This isn’t the prized “light, sweet” kind of crude that is pumped out of the ground in Texas, or even the thick, sticky stuff from Alberta’s tar sands. Rather, it’s what’s known as “orphaned oil” that is so contaminated with organic chlorides that it can corrode the insides of even the biggest refineries.

Now, it’s on the move — and guessing exactly where is turning into a sort of parlor game for some in the oil market. All that is known is that Chevron Corp., which flushed the oil from a pipeline in September 2012 and has seen its value drop by $50 million since then, is loading it onto two tankers bound for Asia.

“It’s really kind of a bizarre incident,” said Gordon Schremp, a senior fuels specialist at the California Energy Commission who was notified by industry representatives of the planned exports.

It’s a rare shipment, considering most crude is barred from leaving U.S. borders. It just so happens that an exemption has been in place since 1992 allowing limited amounts of California oil to leave the country.

Export Exemption

The only reason exports don’t happen very often is because California’s refiners keep almost all the state’s oil for themselves.

The saga began on Sept. 17, 2012, when Chevron told shippers that its pipeline delivering California crude to San Francisco-area refiners was contaminated. Chevron ended up pushing an estimated 1 million barrels through the pipe to get rid of the chlorides.

And so the tainted oil sat in tanks at a Plains All American Pipeline LP terminal in Martinez until this month, when all the red tape, including getting an export license from the Commerce Department, was finally cut, Schremp said.

When the contamination was discovered, heavy crude from California’s San Joaquin Valley cost $97 a barrel. It’s now $46. The difference, multiplied by 1 million barrels, is more than $50 million. And that’s not counting the cost of storing the oil for more than two years, which could add millions more.

In Limbo

West Texas Intermediate futures, the benchmark for U.S. crude, rose 9 cents to $57.24 a barrel at 11:53 a.m. local time on the New York Mercantile Exchange. Prices dropped about 44 percent in the past year.

Kent Robertson, a spokesman for Chevron, declined to comment on the exports. Brad Leone and Meredith Hartley, spokesmen for Plains, didn’t respond to requests for comment.

Oil tanker Hellespont Protector, one of the two vessels chartered to carry the crude, was anchored in the San Francisco Bay on Friday, shipping data compiled by Bloomberg show. The other, Energy Champion, is headed for Qingdao, China, a place with no refineries. It may be a stopover, or it may not be headed to a refinery at all.

Schremp, who wasn’t told where the outcast barrels are headed, said they could be used as fuel for large ships or burned in a power plant.

If refiners know about the contamination ahead of time, they can blend in additives as a cure, but it’s an expensive solution that erodes the value of the crude, said David Hackett, president of energy consultant Stillwell Associates LLC in Irvine, California.

Wherever it lands, chances are it’ll be the first and last California oil that Asia sees for a while. California crude prices have been getting stronger and refiners across the Pacific have been flooded with supplies from much closer by.

Asked whether the rare cargoes are a bellwether for future exports of California oil, Schremp said, “It’s not like it makes perfect economic sense to move barrels that way into the world market — this was an export of circumstance.”

Richmond councilman: Don’t let industry dominate debate – Residents should demand clean air

Repost from The San Francisco Chronicle

Richmond councilman: Don’t let industry dominate debate

Residents should demand clean air

By Eduardo Martinez, Open Forum, March 26, 2015

As host to one of the biggest petroleum refineries in California, Richmond needs its residents to remain vigilant. The Bay Area Air Quality Management District is considering new refinery regulations that would require Chevron to disclose and measure the toxic emissions of its Richmond refinery and reduce them if they rise above stipulated limits, as has often occurred in the past. The air district held public workshops last week in Richmond, Martinez, Benicia and San Francisco. I urge concerned citizens to submit additional comments to the district before its March 27 deadline.

We need citizens to stand up because Big Oil doesn’t give up. The oil industry is spending tens of millions of dollars to derail our state’s landmark climate-change law, AB32. And it’s using some of the same sneaky tactics that Chevron deployed against me when I ran for Richmond City Council. Telling the truth is too risky, I guess: The vast majority of Californians want clean air and a livable climate.

Chevron, the oil giant that ranks by assets as the 18th biggest company in the world according to Forbes, spent some $3 million on advertising against me and other candidates when we ran in November’s election.

Despite being outspent by 20 to 1, my team and I fought back with a grassroots campaign that showed how people power still can triumph over big money. And I can tell you, standing up to a bully feels good, especially when you win.

The industry’s battle plan was revealed in a slide deck prepared by its lobbying arm, the Western States Petroleum Association, which was leaked to Bloomberg BusinessWeek. Instead of engaging in open public debate about clean energy and climate progress, the association has created and funded front groups that appear to consist of ordinary people — who just happen to share the industry’s point of view.

Oil companies also invoked the bogeyman of higher taxes. “Stop the Hidden Gas Tax” proclaimed countless billboards, TV and radio ads for weeks before Jan. 1, 2015, the day transportation fuels came under the AB32 emissions cap.

There was no hidden tax. Nor has the industry’s broader claim — that AB32 would weaken California’s economy and drive away businesses — proved true. In fact, California’s economy has grown since AB32 began. We have the largest advanced energy industry in the United States, employing more than 430,000 workers, and the Golden State’s manufacturing sector leads the nation in total output. The U.S. Bureau of Labor Statistics announced that California vaulted over Texas as the state with the largest job growth during the past year. All this growth — and our per capita carbon emissions have dropped 17 percent since 1990.

To be sure, this increased prosperity still hasn’t reached all Californians. But the solution is not to gut our clean air laws; it is to accelerate our development of renewable energy sources and improved energy efficiency — labor-intensive activities that employ more people than drilling for oil and gas.

We need to keep shining a light on the activities of opponents to clean energy.

As a resident and public official in Richmond, I care about petroleum use for another reason as well. In 2012, an explosion at Chevron’s Richmond refinery led some 15,000 people to seek hospital treatment. The refinery’s typical emissions also take a terrible toll, as I witnessed during my 18 years as an elementary school teacher. So many students were afflicted with asthma that our school founded an Asthma Club to help kids, teachers and parents cope. That should not be.

Californians deserve clean air, a stable climate and public policy that prioritizes those goals. We should strengthen, not weaken, AB32. Tell the air district that.

Eduardo Martinez serves on the Richmond City Council.