Tag Archives: Martinez CA

Martinez Shell Refinery to refine more light Bakken crude

Repost from Bloomberg

Shell Considers Retiring California Coker Amid Shale Boom

By Lynn Doan May 19, 2014

Royal Dutch Shell Plc (RDSA), Europe’s biggest oil company, is considering retiring one of two coking units at its only refinery in California as the company seeks to run lighter crude at the plant.

The company has applied to county regulators for a permit to shut the flexicoker at the 156,400-barrel-a-day Martinez refinery northeast of San Francisco, a move that would shrink the plant’s reliance on heavy oils and cut its greenhouse-gas emissions by 15 percent, Destin Singleton, a Shell spokeswoman, said May 16. The unit helps convert the denser crude into more valuable products such as diesel and gasoline.

Shell is considering the shutdown as hydraulic fracturing and horizontal drilling unleash record volumes of light oil from shale formations across the middle of the U.S. California’s refiners, lacking pipeline access to the growing crude supplies, are bringing in the most ever by rail as they work to counter shrinking production within the state and from Alaska.

“The reality is that we are looking at each individual refinery and making economic decisions as to what is the most optimal feedstock,” John Abbott, downstream director for The Hague-based Shell, said in an interview at Bloomberg’s headquarters in New York May 16. “This is one of the most competitive assets on the West Coast of the U.S. and in California.”

Industry refining margins on the U.S. West Coast, a rough indicator of profitability, averaged $7.62 a barrel in the first quarter, almost twice the $4.07-a-barrel coking margin on the Gulf Coast, Shell said in a statement April 30.

Train Deliveries

While the Martinez refinery doesn’t have the equipment to unload oil from rail cars, it receives crude by pipeline from a complex in Bakersfield, California, that takes train deliveries, Singleton, based in Houston, said by e-mail. The refinery would continue to receive oil by pipeline and vessel using existing infrastructure once the coker is shut, she said.

Heavy crude pumped from California’s San Joaquin Valley dropped 35 cents to $95.20 a barrel, data compiled by Bloomberg at 2:01 p.m. New York time show. Light crude from North Dakota’s Bakken formation gained 82 cents to $98.59 a barrel.

Crude Mix

“Overall, heavy crudes are a big part of our current mix,” Singleton said. “We’ll be processing the same crudes we refine today, but the mix will be lighter — meaning significant reductions in greenhouse gas emissions, less electricity use, and more efficient operations.”

A delayed coker, which was installed at the refinery in the 1990s, based on air regulatory filings, will remain in service, she said.

Refiners from Tesoro Corp. (TSO) to Valero Energy Corp. (VLO) are working to bring more shale oil to their plants on the U.S. West Coast by rail. Trains delivered 395,053 barrels of oil to California in March, a record volume for that month, the most recent data available from the state Energy Commission show.

Shell is seeking permits to build a rail complex at its Anacortes refinery in Washington state that would allow the plant to unload oil from as many as six trains a week, regulatory filings show. The company has also said that it’s carrying upgraded crude to the West Coast from its Scotford oil-sands upgrader in Canada.

Crude Imports

Martinez imported 903,000 barrels of medium-to-heavy crude in February from Canada, the most recent data available from the Energy Information Administration show. The complex already processes some lighter crudes, like Bakken oil, along with heavier feedstock from California’s Central Valley, Singleton said.

Contra Costa County regulators are expected to prepare a report on the environmental impacts of the coker retirement, and the public will have a chance to comment on the plan during that process, she said.

Chevron Corp. (CVX)’s Richmond refinery, west of Martinez, is also applying to local regulators for a project that would change its crude slate. The plan would replace a hydrogen plant and increase capacity at the fluid catalytic cracker’s hydrotreater and sulfur-recovery system to run higher-sulfur oils.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net David Marino, Richard Stubbe

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    Martinez to Benicia: Oil Refinery Protest Draws About 100 Demonstrators

    Repost from the East Bay Express
    [Editor: Many thanks to the East Bay Express for excellent coverage of this colorful and important event (below).  Benicia old timers were heard to say that sleepy little Benicia has probably NEVER seen a protest demonstration like this.  Check out two facebook pages for great photos of the day: facebook.com/stopcrudebyrail AND facebook.com/events/220829548127114/?ref=22.  – RS]

    East Bay Oil Refinery Protest Draws About 100 Demonstrators

    Jean Tepperman —  Mon, May 19, 2014

    Accompanied by a four-kayak flotilla and a fifth-generation Martinez resident on horseback, about one hundred environmental activists marched seven miles from Martinez to Benicia on Saturday to protest the local toxic pollution and global climate impact of Bay Area oil refineries. The march was spearheaded by a Bay Area group affiliated with Idle No More, an organization of Canadian First Nations people fighting development of the tar sands oil fields in Alberta and other environmentally destructive projects on their traditional lands.

    refinery_walk1_5-17.jpeg

    Kelly Johnson

    Specific targets of the protest were proposed expansion projects at the Chevron (Richmond), Valero (Benicia), and Phillips 66 (Rodeo) refineries, a crude oil transportation terminal in Pittsburg planned by energy infrastructure company WesPac, and the major investment of Shell (Martinez) in the Canadian tar sands mines. The Saturday march was the second of four planned Refinery Corridor Healing Walks — the first, from Pittsburg to Martinez, was held in April, and future walks are planned for June and July, ending up at Chevron in Richmond. The series of walks aims to “connect the dots” to “bring awareness to the refinery communities, invite community members to get to know one another, and to show support for a just transition beyond fossil fuels,” according to the group’s website.

    At a gathering at the Martinez Regional Shoreline before the march, a winner of this year’s Goldman environmental prize, South African Desmond D’Sa, described the high rates of leukemia, cancer, and asthma in his home town of Durban and the community’s struggles against Shell Oil there, urging the crowd to “fight them (refineries) wherever they are.” Penny Opal Plant, of the East Bay Idle No More group, said she only recently began to conceive of the refinery corridor as a total area suffering from the “immense devastation” caused by oil refineries.

    Richmond residents have long protested pollution from Chevron, most recently the toxic explosion that sent 15,000 seeking medical treatment in August 2012. Benicia residents have also organized to oppose environmental hazards. In the last year, local groups have also formed in Pittsburg, Crockett-Rodeo, and Martinez to protest refinery expansion and transportation plans, including major increases in the amount of crude oil to be carried by rail through the Bay Area and beyond.

    Describing the dangers of mining, refining, and transporting oil, and looking ahead to a future free from fossil fuel, Opal Plant said, “We are Mother Earth’s immune response awakening. We’re born at this time to do this thing.”

    refinery_walk2_5-17.jpeg

    Kelly Johnson

    The group’s route first went through the Shell refinery, then over the bridge to Benicia, with a view of the Valero refinery there. From a hilltop vista point next to Carquinez Strait, Benicia activist Marilyn Bardet pointed out refineries and planned oil industry project sites, as well as the environmentally Suisun Marsh. Railroad tracks leading to the Valero refinery, she said, go right through the marsh. A spill of tar sands crude oil, she added, would be impossible to clean up because the oil is so heavy it would sink and cause irreparable damage.

    The next Refinery Corridor Healing walk is scheduled to go from Benicia to the Phillips 66 refinery in Rodeo on June 14.

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      All about Bakken Crude, by Guy Cooper, Martinez Gazette

      Repost from The Martinez Gazette

      Martinez Environmental Group: The oil, pick your poison

      By Guy Cooper | April 20, 2014

      Two types of North American crude will roll through our towns. There’s the Bakken crude fractured from the shale beds of North Dakota and the oil/tar sand derivatives rent from the wilds of Alberta, Canada. The former has the potential to vaporize you and your neighborhood.  The latter can slowly render your land and water and body uninhabitable.

      It was Bakken crude that blew up the town of Lac-Mégantic, Quebec, last July, exploded and poisoned the wetlands of Aliceville, Ala., in November, and just missed annihilating the town of Casselton, N.D., in December. That’s just a sample.

      Lac-Mégantic was the eye opener. An improperly equipped and under-staffed 70-car tanker train heading east from the oil fields of Dakota was left parked on the main line above the town with an incorrectly set brake. In the early morning hours, the train broke free and careened down the hill, derailing in the center of town. OK. A train derailment due to human error.  An unfortunate accident. One would expect a nasty oil spill and big clean up to follow.

      That’s not what happened. The train exploded in concussive fireballs that flattened the downtown and instantly killed 47 people. Aerial images show an area the size of downtown Martinez reduced to rubble. Flaming oil flows poured like lava from the burning train into the nearby river and lake, cooling into an intractable underwater toxic waste deposit. It took four days just to extinguish the fires. Who knows how long it will take to clean up the mess. And, of course, 47 lives lost.  The town will never be the same.

      That tragic episode got people’s attention. Crude oil is not supposed to explode. It was first thought an anomaly. Maybe the train crashed into tanks of propane. That was disproved. Then there were the pools of carcinogenic benzene fire crews found themselves slogging through. Not normal.

      Well, it won’t happen again. Then it did, at Aliceville and Casselton.

      What was this stuff that reacted in such an uncharacteristic way? People living beside the tracks wanted to know. Emergency responders wanted to know. Local officials and the Canadian and U.S. government agencies responsible for public safety, train regulation and hazardous materials handling sought answers. Investigations and regulatory hearings commenced. About the only people not publicly showing a lot of interest, besides issues of liability, were the companies responsible for the oil production, movement and refining. Accidents happen. Normal precautions were taken. Regulations were followed. We know what we’re doing. Let’s get the PR, lawyers and lobbyist guys on this.

      In response, Grant Robertson of the Toronto Globe and Mail visited the Bakken oil fields. An oil worker invited him in and produced a mason jar of fresh-out-of-the-ground Bakken crude.  “Smells like gasoline, doesn’t it? Some guys around here pour it directly in their trucks.”  The local joke is if most crude looks like a pint of Guinness, Bakken looks like Miller Lite.

      The Chemical Engineer, an industry source, reported the results of chemical analysis by Canada’s Transportation Safety Board (TSB) that largely corroborated Mr. Robertson’s hands-on experience. Flashpoint refers to the temperature at which the crude gives off enough vapor to ignite. The lower the flashpoint, the more explosive the crude. The TSB results indicated a flashpoint from Lac-Mégantic samples so low that the measuring machine could only show that it was less than -35 C. The report concluded that “It is apparent that the occurrence crude oil’s flashpoint is similar to that of unleaded gasoline.”

      High vapor pressure was also found, another explosive indicator. As I understand it, vapor pressure suggests the combustible gas content of an oil. The refiner Tesoro reported in early 2013 a reading of 12 psi for Bakken. Marathon Oil reported readings of 9.7 and 8.75 between 2010 and 2013, then in 2014 (after the explosions of 2013, just saying …), reported a 5.94 result.  Analysts consider that low reading an aberration, but even that number is about twice the average of most crude oils.

      This is the problem. The Lac-Mégantic train cargo was assigned a packing group III classification by the largely self-regulated oil producers based on an either missed or deliberately misleading evaluation of the real volatility. Fact is, the higher the classification number, the lower the cost of transport. Class III is considered low risk. A more realistic classification I or II would have required more train staffing, beefier cars, enhanced disaster planning and other safeguards.  In other words, there would have been someone else to double check on the brake and the train could not have been left unattended on the main line while the sole engineer went five miles away to a hotel for the night. A spot check of trucks transporting Bakken from the well-heads to rail-loading facilities found a similarly pervasive cargo mis-classification. The fact is, that left to their own devices, without adequate independent regulatory oversight, oil producers, transporters and refiners are invariably going to pick the lowest-cost strategy to bring their product to market. This is the current state of the surrounding industry we are entrusting with our safety. Not a good idea.

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        SF Chronicle: Green groups sue Bay Area Air Quality Management District

        Repost from the San Francisco Chronicle

        Oil trains into Richmond spark lawsuit

        By David R. Baker, April 5, 2014
        A BNSF Railway train, above, hauls crude oil near Wolf Point, Mont. Photo: Matthew Brown, Associated Press
        A BNSF Railway train, above, hauls crude oil near Wolf Point, Mont. Photo: Matthew Brown, Associated Press

        Little noticed by neighbors, trains carrying crude oil from the Great Plains have been rumbling into a Richmond rail yard.

        The cargo is the same kind of crude that fueled a deadly explosion last summer when a train carrying the oil derailed in a small Quebec town, killing 47. Now environmentalists are suing to prevent any more shipments to Richmond.

        The suit, filed last week in state Superior Court in San Francisco, would revoke a permit issued by a regional agency in February that allows Kinder Morgan to unload oil trains in Richmond at a facility originally built to unload ethanol.

        The Bay Area Air Quality Management District granted the permit without studying how the switch from shipping ethanol to oil could affect the environment, said Kristen Boyles, staff attorney with Earthjustice, the group that filed the suit on behalf of four other environmental organizations.

        A placard on a tank car in North Dakota, below, warns that it's carrying flammable crude oil. Trains like these are being used more frequently to deliver petroleum to California. Photo: Matthew Brown, Associated Press
        A placard on a tank car in North Dakota, below, warns that it’s carrying flammable crude oil. Trains like these are being used more frequently to deliver petroleum to California. Photo: Matthew Brown, Associated Press

        “These things are going in without a lot of thought to their safety, their impact on the environment and their possible health effects,” Boyles said. “That’s what’s really frustrating with this situation – how little we know until this is rolling through our backyards.”

        Kinder Morgan declined comment.

        Ralph Borrmann, an agency spokesman, said the change in fuels handled by Kinder Morgan’s rail-yard facility would not increase air pollution – his agency’s primary concern.

        “There were no emissions consequences as a result of the permit, no net increase of emissions, which is what we look at,” Borrmann said.

        Just a few years ago, California didn’t import oil by rail. But that’s changing fast.

        In 2009, railways carried just 45,000 barrels of oil into the Golden State, according to the California Energy Commission. By last year, that number had soared to 6.2 million barrels. A barrel equals 42 gallons.

        Petroleum glut

        California’s refineries have turned to rail to access a glut of petroleum in the Great Plains. Oil production in the Bakken Shale formation that lies beneath North Dakota and Montana has surged so much, so quickly, that area’s pipelines lack the capacity to transport the fuel. As a result, the Bakken oil sells at a discount to other kinds of crude.

        Oil by rail is “about discounted oil, delivered to your doorstep,” said Gordon Schremp, senior analyst with the Energy Commission.

        The amount of oil carried by rail is rising nationwide. While most of those shipments reach their destination without incident, the United States and Canada have recently seen a series of oil-train accidents leading to explosions and fires, including last July’s derailment in Lac-Megantic, Quebec. In January, the U.S. Pipeline and Hazardous Materials Safety Administration issued an alert warning that Bakken crude, much lighter than many other grades of oil, may be more flammable as well.

        Benicia refinery

        The warning spurred opposition to a series of oil-by-rail projects in California. Valero’s refinery in Benicia is seeking approval to build a rail yard that could move 70,000 barrels of oil each day, replacing more than half of the petroleum the refinery now imports from abroad, via ship.

        In Pittsburg, another project would bring in oil by ship, pipeline and rail. The $200 million proposal, by WesPac Energy, would refurbish an old Pacific Gas and Electric Co. facility to import, store and supply oil to Bay Area refineries.

        Community groups have spent months fighting those proposals. But most Richmond residents knew nothing about Kinder Morgan’s Richmond rail facility until television station KPIX reported on the issue last month.

        Kinder Morgan applied to convert its existing ethanol offloading facility last year, and won an operating permit from the air district in February. KPIX filmed trucks carrying oil from the facility to the Tesoro refinery in Martinez.

        Tesoro’s comment

        A Tesoro spokeswoman on Friday declined to confirm whether the refinery collaborates with Kinder Morgan’s Richmond facility. But she said the refinery uses about 5,000 to 10,000 barrels of oil per day taken from rail shipments, equal to between two and four train shipments per month.

        Earthjustice and its partners in the suit – the Asian Pacific Environmental Network, Communities for a Better Environment, the Natural Resources Defense Council and the Sierra Club – want Kinder Morgan’s operating permit in Richmond revoked until the company conducts a full environmental impact review.

        “The risk of train accidents is huge with this kind of crude oil,” Boyles said.

        A tanker truck is filled from railway cars containing crude oil on railroad tracks in McClellan Park in North Highlands on Wednesday, March 19, 2014. North Highlands is a suburb just outside the city limits of Sacramento, CA. (Randall Benton/Sacramento Bee/MCT) Photo: Randall Benton, McClatchy-Tribune News Service
        A tanker truck is filled from railway cars containing crude oil on railroad tracks in McClellan Park in North Highlands on Wednesday, March 19, 2014. North Highlands is a suburb just outside the city limits of Sacramento, CA. (Randall Benton/Sacramento Bee/MCT) Photo: Randall Benton, McClatchy-Tribune News Service
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