County supervisors declare end to moot oil project approved in 2014
BY JOHN COX, Jan 22, 2019
A pair of controversial oil projects killed years ago by poor market conditions was finally declared dead last week by the Kern County Board of Supervisors.
The projects, valued at $170 million, were supposed to transform the former Big West refinery on Rosedale Highway, in one case by turning it into a rail terminal that was supposed to take in two mile-long trains, or 150,000 barrels, per day of crude from across the continent. The related project would have upgraded the 67,000-barrel-per-day refinery, which has not operated since 2012.
After the board voted unanimously to approve the project Sept. 9, 2014, the plan came under legal attack by environmental groups that considered it polluting and dangerous. Prior to the vote there was a series of rail accidents in which trains carrying oil from North Dakota derailed and exploded, in one case killing nearly four dozen people in Canada. The Bakersfield project wasn’t limited to receiving only oil from North Dakota, which was considered uniquely volatile.
The environmentalists ultimately prevailed in court and, as part of a settlement released Sept. 19, a judge ordered the board to rescind its approval of the projects. Supervisors did so Tuesday by signing off on a consent-agenda list that included the oil projects.
Refining industry observers have said the projects likely would not have proceeded anyway. When oil prices plummeted in 2014, there was no longer enough operating margin — and apparently still isn’t — to cover the cost of transporting huge amounts of oil across the country. Separately, the company that proposed the project, Houston-based Alon USA, now part of Delek US Holdings Inc., headquartered in Tennessee, opted not to move forward with a broader overhaul of the refinery.
Environmental groups said the projects’ official end ensures local residents won’t be harmed by refining emissions or oil-train explosions.
“Families throughout Kern County can breathe easier knowing that this ill-conceived, extremely dangerous project has been stopped,” Angela Johnson Meszaros, an attorney with the environmental group Earthjustice, said in a news release.
Inslee statement on Trump administration’s decision to roll back crucial oil train safety regulation
September 25, 2018
“Today, the Trump administration repealed a crucial oil train safety regulation which will increase the risk posed by oil train derailments. We know all too well the horrific damage and potential loss of life that could result from the greater numbers of trains carrying crude oil through Washington and along the Columbia River. Today’s news signifies a reckless disregard for the life and property of all who live or work along the rail tracks that transport volatile Bakken crude oil.
“The Obama administration proposed thoughtful electronic braking system requirements that would help keep trains from speeding off the tracks. It is incomprehensible why this administration would pursue a biased cost-benefit analysis to make a case that this safety measure is too expensive and then dismiss such a common sense measure from further consideration. I fear the day we witness a destructive or deadly derailment that could have been prevented with readily available technology.
“This is yet one more example where this administration has abandoned its responsibility to protect our communities and left it to states to handle. We will continue to do all we can to ensure our communities are prepared and ready to respond, if necessary, and I will continue to lean on our federal partners to do the right thing and put the safety of our communities over the profits of the oil industry.”
Inslee has been advocating for stronger oil train safety measures for years. He issued a directive in 2014 directing various state agencies to conduct risk analyses and develop response plans in coordination with state and provincial partners, and has worked with legislators to implement additional inspection, safety and notification requirements. Inslee met with federal officials in June 2014 following a derailment in Mosier, Oregon, and sent a letter to the U.S. Department of Transportation and wrote an op-ed in 2016 pleading with federal officials to pursue numerous actions, including phasing out outdated tank cars, requiring lower speeds in populated areas and implementing electronic braking requirements.
Washington Agency Votes to Reject Vancouver Energy’s Massive Oil-by-Rail Terminal
By Justin Mikulka • Wednesday, November 29, 2017 – 10:29
In another major blow to the West Coast oil-by-rail industry, a Washington state agency voted unanimously to recommend Governor Jay Inslee reject the Vancouver Energy oil terminal. Proposed for construction in Vancouver, Washington, along the Columbia River, it would be the largest oil-by-rail facility in the country.
Washington State’s Energy Facility Site Evaluation Council (EFSEC) has been reviewing the project since 2013 — reportedly the longest review period ever for the council. However, its November 28 meeting and vote on the final recommendation for the Tesoro Savage–backed project only took 10 minutes.
“Given the reality of climate change, there is simply no reason to build new fossil fuel infrastructure, especially for the export of extreme oil,” said Matt Krogh of activist group Stand, one of many groups opposing the Vancouver Energy project. “The entire reason behind this proposal was to move crude oil from the middle of North America to overseas markets. Simply put, this oil is not for us — and the proposal would leave every single community along the rail lines with all of the risk and none of the reward.”
Proposed by Tesoro Savage Petroleum Terminal LLC (also known as Vancouver Energy), the facility is designed to handle 360,000 barrels of oil per day. Expectations are that the facility would receive both the highly volatile light Bakken oil as well as Canadian tar sands oil, with much of it traveling through the Columbia River Gorge. In 2016 an oil train derailed and caught fire in Mosier, Oregon, with some of the oil ending up in the Columbia River, which has already been suffering major declines of its once-historic salmon populations.
Despite lower oil prices, U.S. imports of Canadian tar sands oil reached record levels in 2017 and are currently at 3.3 million barrels per day. More of that oil has been moving by rail recently, and as overall tar sands production continues to rise, industry observers predict large potential increases in shipping more of it by rail over the next several years.
Rich Kruger, CEO of tar sands producer Imperial (the Canadian affiliate of ExxonMobil), recently commented on how rail was becoming more attractive as a way to get oil to America.
“Rail is increasingly competitive,” Kruger told Bloomberg. “There are times when we look at the pipeline alternative, [but] the variable cost aspect of rail is a more attractive means for us to get to the mid-Western or Gulf coast markets.”
West Coast Oil-by-Rail Plans
Should Washington Governor Inslee, who has 60 days to make a final decision, follow the recommendation to reject the Vancouver Energy oil terminal, it would throw a major wrench in oil industry plans for Canadian tar sands and Bakken oil in the West. As DeSmog reported in June, oil-by-rail remains part of the industry’s long-term plans to get oil to West Coast refineries.
Earlier this year the Washington Supreme Court voted unanimously to deny an oil-by-rail project in Grays Harbor because that project lacked a comprehensive environmental review that considered the Ocean Resources Management Act.
Growing awareness of the risks of oil train terminals has led many communities where they are proposed to back away from such projects.
Local Election Was Proxy Vote on Vancouver Oil Terminal
Because Vancouver Energy’s proposed oil-by-rail facility is sited in the Port of Vancouver, a recent electoral race for one of the port commission’s three seats became a proxy fight over the oil terminal.
The race was between Don Orange, owner of a local auto repair shop and opponent of the oil-by-rail project, and Kris Greene, an insurance agent who was backed by large amounts of money from oil and rail corporations. Oregon Public Broadcasting reported Greene raised “nearly $600,000, with 87 percent coming from Vancouver Energy and backers of the project” and also received support from a PAC, funded in part by rail company BNSF and Tesoro, which spent $160,000.
However, Orange also raised close to $400,000, with considerable support coming from the Washington Conservation Voters Action Fund.
Orange thought there was little question why so much money was pouring into a local election for a seat on a commission that pays around $10,000 a year.
“This is a choice of what our economy should look like,” said Orange. “It is a choice of having a vibrant small business economy or becoming a big oil town.”
The election’s results showed how the majority of the community felt about the oil-by-rail project: despite being outspent by Greene, Orange won over 64 percent of the vote.
Current port commissioner Eric LaBrant was shocked by the results, saying, “I’ve never seen anything like this in local politics … This election shows where the community wants to go and what kind of business the community wants to have there at the port.”
Still, the final decision on the oil terminal lies with the governor, and even then, the door remains open for either side to take legal action.