Tag Archives: Phillips 66 San Luis Obispo refinery

Ruling by Little-Known Federal Agency Paves Way for Communities to Say No to Oil-by-Rail

Repost from Desmog Blog

Ruling by Little-Known Federal Agency Paves Way for Communities to Say No to Oil-by-Rail

By Justin Mikulka, September 28, 2016 – 03:58
Oil tank care behind a fence with sign reading 'Think first'

Oil tank care behind a fence with sign reading ‘Think first.’ Main image credit: Justin Mikulka

The community of Benicia, [California,] in the crosshairs of history, made one of those decisions that will make a difference for the country. They stood up and said the safety of our communities matters.”

That was Yolo County Supervisor Don Saylor talking to The Sacramento Bee about the vote by the Benicia City Council to deny a new oil-by-rail facility that oil company Valero was seeking.

But that vote would have been meaningless if not for a recent decision on September 20 by the Surface Transportation Board (STB) that gave Benicia the legal authority to have some say over what happens within its borders.

Created in 1996, the STB is a federal agency which serves as “an independent adjudicatory and economic-regulatory agency charged by Congress with resolving railroad rate and service disputes and reviewing proposed railroad mergers.”

The STB decision helped clear up some of the gray areas around the issue of “pre-emption,” in which railroads are not subject to any local or state authorities or laws because local and state laws are “pre-empted” by federal law.

In 2013 the STB ruled in favor of Norfolk Southern Railway Company, saying once again that federal pre-emption of state laws protected the rail company from lawsuits filed in the state of Virginia.

The basic idea of pre-emption is that for interstate commerce to work, the federal government needs to be the sole regulator of railroads.

As we have reported previously on DeSmog, pre-emption can effectively place rail companies above local law. This has led to developments such as the case of Grafton, Massachusetts, where the construction of the largest propane transloading facility in the state occurred without the need for local approval, construction permits, or even environmental review.

Regarding the Grafton facility, the New England Center for Investigative Reporting wrote that, “Residents were dumbfounded: The location was in the middle of a residential neighborhood, less than 2,000 feet from an elementary school and atop the town’s water supply.”

This above-the-law approach has served rail companies well. And until the recent STB decision, it also appeared to protect oil companies who were moving oil by rail.

But this latest decision about Benicia appears to deliver a real blow to oil companies when it comes to oil-by-rail transfer facilities. Since the companies who receive the oil from the rail cars aren’t railroads, the STB ruled that they are not protected by federal pre-emption. In the decision the STB refers to Valero as a “a noncarrier” which is why the STB ruled they are not able to claim pre-emption.

This allowed Benicia to say no to an oil-by-rail facility in their community. And it has also changed the discussion about this industry as a whole.

San Luis Obispo County, California, has now delayed further the decision about a new oil-by-rail facility in order to consider the latest STB ruling.

Ethan Buckner was one of the organizers for environmental advocacy group Stand, which was working to stop the Benicia facility.

This is a victory for the right of communities to say no to refineries’ dangerous oil train projects. The federal government has said once and for all that there is nothing in federal law that prevents cities from denying these oil companies’ dangerous rail projects,” Buckner said. “The oil industry keeps telling communities they have no right to say no to oil trains, but this ruling once and for all refutes this.”

Jackie Prange was one of the lawyers working on the Benicia case for the Natural Resources Defense Council and explained the potential impact of the STB decision to the San Francisco Chronicle.

We’re pleased with the decision and the implications it will have across the country,” said Prange. “This issue is live in a number of sites across the country. This is definitely a decision that I think cities in other states will be looking to.”

They are definitely paying attention in San Luis Obispo County, as well as in Albany, New York.

Albany is the largest oil-by-rail hub on the East Coast.

Opponents of its oil trains recently had cause for celebration. On September 16, the state’s Department of Environmental Conservation announced that the two companies operating oil-by-rail facilities at the Port of Albany would now be required to undergo full environmental reviews before the agency would renew the companies’ permits.

Chris Amato is a lawyer for Earthjustice who has been working on this issue for years. He believes the STB decision supports what Earthjustice has been saying all along about Global Companies, which owns one of Albany’s oil-by-rail facilities.

The decision by the Surface Transportation Board confirms what we have been saying since 2014: that Global’s claim that state regulation of their operations is pre-empted by federal railroad law is simply wrong,” Amato explained to DeSmog. “Global can no longer attempt to shield their operations from scrutiny under their flawed legal theory.”

Opponents of the Albany oil-by-rail operations have been asking the state to step in for years, but the state has also hidden behind the issue of federal pre-emption. In 2014 the Albany Times Union reported that “Gov. Andrew Cuomo has been deflecting calls for the state to block the trains, saying rail transportation is controlled by the federal government, not the state.”

It would appear that the STB ruling negates New York’s current position and offers an option for the state to have authority over oil-by-rail facilities in Albany.

While the amount of oil moving by rail is roughly half of what it was two years ago, that is mostly due to the current low price of oil. And it hasn’t stopped oil companies’ continued efforts to build out more oil-by-rail infrastructure.

Meanwhile, oil trains continue to derail and explode, as happened in Mosier, Oregon, in June, and opposition to the oil-by-rail industry continues to grow.

This STB decision appears to be a game-changer in the oil-by-rail story. With it, perhaps now more politicians will agree that “the safety of our communities matter” — much more so than oil company profits.

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SAN FRANCISCO CHRONICLE: Benicia’s rejection of oil trains could reverberate across country

Repost from the San Francisco Chronicle

Benicia’s rejection of oil trains could reverberate across country

By Kurtis Alexander, 9/21/16 5:11pm
The Valero refinery is seen in the background behind signage for a railroad crossing on Wednesday, October 22, 2014 in Benicia, Calif. Photo: Lea Suzuki, The Chronicle

The Valero refinery is seen in the background behind signage for a railroad crossing on Wednesday, October 22, 2014 in Benicia, Calif. Photo: Lea Suzuki, The Chronicle

Benicia’s rejection of plans to bring trains filled with crude oil to Valero Corp.’s big refinery in the city was hailed Wednesday by critics of the country’s expanding oil-by-rail operations, who hope the flexing of local power will reverberate across the Bay Area and the nation.

Of particular interest to environmentalists and local opponents, who for years have argued that Valero’s proposal brought the danger of a catastrophic spill or fire, was a last-minute decision by U.S. officials that Benicia’s elected leaders — not the federal government — had the final say in the matter.

Word of that decision arrived just before the City Council, in a unanimous vote late Tuesday, dismissed Valero’s proposal for a new $70 million rail depot along the Carquinez Strait off Interstate 680. Valero had said the project would not only be safe but bring local jobs, tax revenue and lower gas prices.

“We’re pleased with the decision and the implications it will have across the country,” said Jackie Prange, a staff attorney for the Natural Resources Defense Council, one of several groups opposed to the project. “This issue is live in a number of sites across the country. This is definitely a decision that I think cities in other states will be looking to.”

As oil production has boomed across North America, so has the need to send crude via railroad. The uptick in tanker trains, though, has been accompanied by a spate of accidents in recent years, including a 2013 derailment in the Quebec town of Lac-Megantic in which a 72-car train exploded and killed more than 40 people.

The authority of communities to limit oil trains has been clouded by the assertion of some in the petroleum industry that local officials don’t have jurisdiction to get in the way. Companies like Valero have contended that railroad issues are matter of interstate commerce — and hence are the purview of the federal government.

Shortly before Tuesday’s meeting, however, Benicia officials received a letter from the U.S. Surface Transportation Board, which wrote that Valero, based in Texas, was not a railroad company and that the proposed rail terminal fell under city jurisdiction.

“It’s what I was waiting for to help me make my vote more defensible,” said Councilman Alan Schwartzman at the meeting.

Earlier this year, Valero had asked the Surface Transportation Board for “preemption” protection for the project after Benicia’s Planning Commission rejected the proposal. The plan proceeded to the City Council upon appeal.

The plan called for oil deliveries from up to two 50-car trains a day, many passing through several Northern California communities en route from the Bakken shale formation in North Dakota. Those trains would carry as many as 70,000 barrels of oil.

The company billed the project as a way to keep gasoline prices low in the absence of a major oil pipeline serving the West Coast. Crude is currently brought to the Bay Area mostly by boat or through smaller pipelines.

On Wednesday, Valero officials expressed frustration at the city’s decision.

“After nearly four years of review and analysis by independent experts and the city, we are disappointed that the City Council members have chosen to reject the crude by rail project,” spokeswoman Lillian Riojas wrote in an email. “At this time we are considering our options moving forward.”

The vote directly hit the city’s pocketbook. Nearly 25 percent of Benicia’s budget comes from taxes on the oil giant, and the city coffers stood to grow with more crude. The refinery employs about 500 people, according to city records.

But the city’s environmental study showed that oil trains presented a hazard. The document concluded that an accident was possible on the nearly 70 miles of track between Roseville (Placer County) and the refinery, though the likelihood was only one event every 111 years.

The document also suggested that much of the crude coming to the Bay Area from North Dakota, as well as from tar sands in Canada, was more flammable than most.

Several cities in the Bay Area and Sacramento area joined environmental groups in calling for rejection of the project.

“The council’s vote is a tremendous victory for the community and communities all throughout California,” said Ethan Buckner of the opposition group Stand, who was among more than 100 people who turned out for the council’s verdict. “At a time when oil consumption in California is going down, projects like this are unnecessary.”

At least two other plans are in the works for oil delivery by rail elsewhere in the region — in Richmond and Pittsburg. A handful of other proposals have been put forth in other parts of California, including the expansion of a rail spur at a Phillips 66 refinery in San Luis Obispo County, which is scheduled to be heard by the county planning board Thursday.

Prange, with the Natural Resources Defense Council, said this week’s finding by the Surface Transportation Board gives cities the confidence to reject the proposed oil trains, if they wish to do so.

“It reaffirms the power of local government to protect their citizens from these dangerous projects,” she said.

U.S. oil deliveries by rail have grown quickly, from 20 million barrels in 2010 to 323 million in 2015, according to government estimates. In response, federal transportation officials have worked to improve the safety of oil-carrying cars with new regulations.

But over the past year, rail deliveries nationwide have slowed, in part because of the stricter rules as well as local opposition, falling crude prices and new pipelines.

Critics have complained that the tightened rules have fallen short, pointing to incidents like a June train derailment in Mosier, Ore., which spilled hundreds of thousands of gallons of crude into the Columbia River. Leaders in Oregon are discussing a statewide ban on crude trains.

Kurtis Alexander is a San Francisco Chronicle staff writer.
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Phillips 66 seeks six-month delay in San Luis Obispo rail spur hearing

Repost from the New Times, San Luis Obispo, CA

Phillips 66 seeks six-month delay in rail spur hearing

By Chris McGuinness, August 18, 2016

The oil company proposing one of SLO County’s most controversial projects is asking the SLO County Planning Commission to wait six months before taking up the issue again.

After months of lengthy hearings, Phillips 66 requested that a planned commission meeting on its proposed rail spur extension project scheduled for Sept. 22 be pushed back until March 2017.

The move comes as the company waits for a decision by federal regulators on another controversial proposal also involving oil-carrying trains in the Northern California city of Benicia.

Hearings for Phillips 66’s project, which would allow the company to bring in crude oil by train to its Santa Maria Refinery on the Nipomo Mesa, began in February. In a July 10 letter to county planning staff, the company said it wanted to wait until the Federal Surface Transportation Board ruled on a petition involving an oil train-related project in Benicia. The company in charge of that project, Valero, is seeking declaratory relief from the three-person federal board after the oil company’s proposal to transport 50 trains per-day carrying crude oil through the city was denied by the Benicia Planning Commission and appealed to its City Council.

At the heart of the Benicia case is the issue of pre-emption, or the extent of a local government’s authority over interstate rail transportation, which is the purview of federal government.

The same issue is at play in SLO. The hearings on the Phillips 66 project featured discussions over the county’s ability to set limits or conditions on the project.

“In the interest of efficiency of the commission as well as the planning staff, we believe it would be prudent to further continue the hearing on Phillips 66’s Rail Spur Extension Project until March 2017, so that all parties can benefit from the direction expected from the Surface Transportation Board,” the letter from Phillips read.

Andres Soto is a member of Benicians for a Safe and Healthy Community, an organization of residents who oppose Valero’s proposed project. Soto told New Times he was concerned that the impact of a decision that favored Valero would have far-reaching consequences.

“It would gut local land-use authority across the country,” he said.

Whether Phillips 66 gets the delay will be up to the SLO County Planning Commission. The commission will take up the request at the Sept. 22 meeting.

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