Repost from 5KPIX TV CBS SF Bay Area [Editor: apologies for the video’s commercial ad. You can pass on choosing an ad – the video will begin if you just wait. – RS]
State Senator Says Bay Area Not Prepared For Crude Oil Trains
Phil Matier talks with state senator Jerry Hill who believes that Bay Area emergency crews are not properly prepared to handle the hundreds of tanker trains bringing shale crude oil from the Dakotas to local refineries. (11/23/14)
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
The 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.
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.”
Pittsburg: WesPac oil-by-rail storage project remains on hold
By Paul Burgarino, 08/02/2014
PITTSBURG — The brakes remain on a massive $200 million plan to transport domestic crude oil by railroad cars and ships, store it in refurbished storage tanks and pipe it to refineries throughout the Bay Area.
And after almost six months of no action, it may stay that way for a while.
Pittsburg officials said it will be at least early 2015 before the project is brought before city decision-makers — if it ever is.
“Right now, we’re kind of in a holding pattern and waiting for a green light from the applicant,” City Manager Joe Sbranti said.
In February, city leaders — prompted by a letter from the office of state Attorney General Kamala Harris urging further scrutiny on air quality and the risk of accidental spills, as well as fierce community opposition — told WesPac Energy that it would be reopening the public comment period on its draft environmental documents.
The WesPac project calls for an average of 242,000 barrels of crude or partially refined crude oil to be unloaded daily and stored in 16 tanks on 125 acres once used by Pacific Gas & Electric to store fuel oil two decades ago.
Since earlier this year, Pittsburg planners and a hired consultant have briefly discussed some of the issues raised, but that has ceased until WesPac decides whether it will put more money toward continuing the process, Sbranti said. All costs for studies of development projects are covered by applicants, he said.
The earliest a revised contract would be considered by the City Council is September, Sbranti said. After that, he estimated additional studies could take anywhere from six to 10 months.
“If and when they decide to come forward, they are entitled to and deserve a fair hearing,” Mayor Sal Evola said. “As it stands today, as far as we know, they’ve put the project on hold.”
Art Diefenbach, project manager for WesPac, said in an email, “We have nothing new to share about our project at this time.”
The facility, located on the western edge of town near homes, schools, churches and the Pittsburg Marina, would handle an estimated 88 million barrels of domestic and imported crude oil and partially refined crude. Its capacity is massive, and 20 percent of the state’s processed oil could pass through it over the course of a year, according to the Jan. 15 letter from Harris’ office.
Supporters of the $200 million project say it will bring jobs and revenue to the city, make use of a dormant industrial parcel, and help refineries meet their future needs at a time when oil production in California is declining and existing storage is near capacity.
The Pittsburg Defense Council, along with several environmental groups, is fighting the project over concerns about air quality, environmental issues and safety concerns involving the transportation of crude by rail.
“We’ve been keeping an eye out for when it comes back on city agendas, and being vigilant,” said longtime resident and Defense Council member Lyana Monterrey. The group has also been keeping an eye on crude-by-rail issues in Berkeley, Richmond and Benicia, she said.
The Pittsburg critics point to a train carrying Bakken crude that exploded in July 2013 in Lac-Megantic, Quebec, killing 47 people, and other derailments and explosions have occurred in the past year in Alabama and North Dakota.
Crude shipments by rail from the Midwest and Canada into the state have increased from about 1.1 million barrels in 2012 to about 6.3 million barrels in 2013, according to the California Energy Commission. One thing the WesPac issue has brought forward is a “heightened sense of awareness” about rail safety, as both the Union Pacific and Burlington North Santa Fe lines cut through Pittsburg, Evola said.
Pittsburg, he said, is lobbying for a bill currently in the state Assembly requiring railroads to report details of transports of hazardous materials on a quarterly basis to the state Office of Emergency Services.
[Editor: The Yolo County Board of Supervisors submitted an incredibly important letter to the City of Benicia critical of the Draft EIR for Valero Crude by Rail. In their letter, the Board lays out the importance under California law of taking into account indirect impacts beyond those of the immediate project, including “upstream” communities along the rails in Placer, Sacramento, Yolo, Solano, and Contra Costa counties. Benicia organizers offer profound thanks to our “uprail” neighbors whose health and safety concerns are also ours. Below is a brief excerpt. For the full document in PDF format, click here. – RS]
July 15, 2014
VIA CERTIFIED MAIL AND E-MAIL
Amy Million, Principal Planner
Community Development Department
250 East L Street
Benicia, CA 94510
RE: Valero Benicia Crude by Rail
Dear Ms. Million:
Yolo County has reviewed the City of Benicia’s Draft Environmental Impact Report (“DEIR”) related to the project at the Valero Oil Refinery that would result in the daily delivery of 70,000 barrels of oil by rail to the Refinery (the “Valero Project”). The Valero Project would move approximately 80% of Valero’s crude deliveries from ocean tankers to railways that traverse through our local communities and sensitive environmental resources. Notwithstanding the change in where the oil is traveling, the DEIR pays little attention to the potential upstream effects of increased oil by rail shipments through Placer, Sacramento, Yolo, Solano, and Contra Costa counties.
As discussed below, the DEIR provides only a brief review of the environmental, safety, and noise effects on upstream communities. This DEIR justifies this cursory analysis because the effects are “indirect” and not in the Project’s immediate vicinity. […continued…]