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Shell Martinez moves to clean up its act; will NOT receive crude by rail

Repost from The Martinez News Gazette
[Editor: Unconfirmed reports suggest that the light, sweet crude delivered to Shell by ship will first be transported across Canada by rail.  – RS]

Shell Martinez to shut down flexicoker, reduce green house gas emissions

Rick Jones | May 18, 2014

MARTINEZ, Calif. – In a major undertaking billed as the “Greenhouse Gas Reduction Project,” Shell is proposing to upgrade and modernize its Martinez refinery to significantly reduce greenhouse gas emissions, save water, improve efficiency, and stay relevant in the changing energy landscape, Shell representatives said Tuesday.

In a presentation to the News-Gazette staff, Shell Martinez Refinery General Manager Paul Gabbard stated the renovated refinery will become “cleaner, safer and more efficient – with less impact on the environment and our community.”

Also in attendance at the presentation was Steve Lesher, manager of communications and sustainable development; Teresa Makarewicz, health and safety director and Erin Hallissy, public affairs representative and communications.

The $450 million upgrade project will allow Shell to refine more light, sweet crude oil. With current production and transportation methods, heavy crudes have a more severe environmental impact than light ones, the representatives said. Heavy crude refining techniques require more energy input than light crude.

“In my view, in my career it’s rare when a project makes so much business sense and it makes environmental and community sense at the same time,” Gabbard said. “It’s a very nice marriage of what the world wants us to do and what we think we have to do anyway.”

The Global Warming Solutions Act of 2006 (AB 32) requires businesses to reduce greenhouse gas emissions to 1990 levels by the year 2020. Gabbard said this project gets the Shell Martinez Refinery on track for that goal.

According to Shell, the project will cut greenhouse gas emissions at the refinery by 700,000 metric tons a year – the equivalent of taking 100,000 cars off the road.

Water use at the refinery will be reduced by 15 percent, saving 1,000 gallons a minute.

A significant environmental impact of heavy crude is carbon dioxide output, which can be as much as three times that of light crude of the same quantity.

“The climate change, AB 32, required us to go more carbon friendly,” Gabbard explained. “It changes our business model. We’ve had this business model for 30 years and now we are going to change it up. What are we going to do for the next 50 years? It dovetails, in our view, to exactly what the world, state and community wants us to do.”

The project will create over 300 temporary construction jobs for local workers represented by local trade unions, reps said.

Major events conducted at the refinery where 1,500 workers are brought in for maintenance will go from four per year down to three per year, Gabbard pointed out.

The refinery, which will mark its 100th year in Martinez in 2015, receives heavy crude which requires refinement that is heavy in carbon emissions.

Gabbard said the plant will shut down the flexicoker, built in 1983, one of the major operating units in the facility. The ever-present blue flare from the coker’s column will no longer be seen.

The modernization will cut sulfur dioxide emissions by up to 25 percent, with no increase in NOx (nitrogen oxide). Electricity use will decline, and the upgrade does not expand the refinery nor increase the amount of oil processed.

“The amount of crude we bring in, the amount of product we send out, won’t change,” Gabbard said.

What will change is the amount of crude being brought in by tankers. The pipeline from the Central Valley of California brings the heavy crude type; Shell has been receiving less and less from that source as the oil fields dry up. With the change to a lighter crude, the amount of crude coming to Martinez via pipeline will drop further.

With the transport of crude by rail a significant issue in the East Bay, Gabbard was quick to say that Shell does not and will not receive crude by railway.

“We are not going to [receive] rail crude, we are not building rail crude facilities,” Gabbard said. “There will be no crude rail unloading for Shell in Martinez.”

The refinery’s physical footprint will decrease by eliminating a major processing unit. Due to higher assessed value, Shell’s property taxes will increase.

The proposed project will go through full county review, including an Environmental Impact Review (EIR). On June 3, Shell will meet with the Contra Costa County Board of Supervisors to seek approval of the EIR consultant. Preliminary paperwork has already been submitted to the county. The hope is to conclude the permit process by May 2015.

Construction could start mid-2016, with the project being completed by 2018.

Shell anticipates using local labor for the project by mid-2015.

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