Repost from the Benicia Herald
[Editor:  See also the Benicia Herald’s “Community, environmental groups react to crude-by-rail decision.”  – RS]

Council denies Valero Crude-By Rail Project

Benicia City Council has unanimously denied a use permit for the controversial Valero Crude-By-Rail project, citing a federal board decision as well as a June 3 derailment that spilled 42,000 gallons of crude oil and caused a fire that burned 14 hours.

But the matter didn’t end Tuesday with the vote. The Council has asked its legal staff to rephrase its findings in a document the panel will see for approval Oct. 4. Valero Benicia Refinery will have 30 days after that to decide how to proceed.

Valero had appealed to the Council a Feb. 11 Planning Commission decision to deny both an environmental report on the project as well as the use permit the refinery had sought.

After several meetings, several members of the Council said they needed answers to their questions, some posed by constituents, before they were ready to vote.

Meanwhile, Valero sought a declaratory order from the federal Surface Transportation Board, and the Council agreed to wait until Tuesday to give the Board time to respond.

At 2 p.m. Tuesday, city staff learned the federal board denied the refinery’s request and instead issued guidelines. While Benicia has little say in the governance of railroads, the board concluded the Planning Commission decision “does not attempt to regulate transportation by a ‘railroad carrier.’”

Because Valero isn’t a rail carrier and its employees, rather than those from UP, would be offloading the crude into the refinery, the board said the Planning Commission’s decision had not tried to regulate the railroad.

“If the offloading facility were eventually to be constructed but the EIR or land use permit or both, including mitigation conditions unreasonably interfering with UP’s future operations to the facility, any attempt to enforce such mitigation measures would be preempted,” the Board’s decision said.

Scott Lichtig, California’s deputy attorney general, expressed a similar opinion in his April 14 letter.

“Because the project applicant Valero is not a rail carrier and not acting pursuant to STB authorization, ICCTA (Interstate Commerce Commission Termination Act) simply has no application to Valero and its proposed refinery upgrades,” he wrote.

Councilmember Christina Strawbridge, who said she had been doing her own “homework” about the matter and who had been carefully weighing both sides, said it was a derailment in late spring that made her reject the refinery’s application. Later, the other councilmembers joined her in voting against the refinery’s project.

The Council decision is the latest step in the project that proposed extending Union Pacific Railroad track into Valero Benicia Refinery land so than up to 70,000 barrels of oil could be brought in daily by train rather than by tanker ships.

The refinery, which produces about 10 percent of the gasoline consumed in California, originally applied for the use permit in late 2012. It not only proposed the rail extension, but also replacing and moving tank farm dikes and a concrete berm and moving underground infrastructure. The project also called for new roadwork.

A mitigated negative declaration was written and circulated between May 30 and July 30, 2013, but the city decided that document wasn’t thorough enough to meet California Environmental Quality Act requirements for such a project and ordered a draft Environmental Impact Report (DEIR) instead. That document was circulated between June 17 and Sept. 15, 2014.

After hearings and public comments, that report was revised and circulated Aug. 31 to Oct. 30, 2015, and a final environmental report was given public airing this year at Benicia Planning Commission meetings Feb. 8-11.

During that time, those who opposed the project citing environmental concerns staged protests, including walks to the five Bay Area refineries on both sides of the Carquinez Strait.

They argued that a derailment could damage Suisun Marsh, sensitive lands, such as Sulphur Springs Creek, the marshland between Benicia Industrial Park and the Carquinez Strait near Valero’s property and small and large towns next to tracks uprail from Benicia.

Detractors also insisted that the project would affect Benicia Industrial Park traffic, particularly on Park Road and ramps on Interstate-680.

They cited nearly two dozen train derailments, in particular the July 6, 2013, Lac-Megantic tragedy in which a runaway unattended Montreal, Maine and Atlantic (MMA) Railway train loaded with Bakken Formation sweet crude oil overturned in the small Quebec city.

During the derailment, the fuel caught fire and exploded, killing 47 and destroying 30 buildings.

Union Pacific and Valero representatives stressed UP’s safety record. UP spokespersons said the railroad has stronger safety practices that, among other things, requires employees to remain with an idling train. The refinery promised it would use improved, reinforced rail cars to carry its crude blend.

Refinery emergency personnel trained with Benicia municipal emergency responders to learn about the rail cars’ configuration.

Supporters reminded the Council that Valero employs about 500, and backs community projects. In addition, its projects mean jobs, not only at the refinery but for contracted industrial workers.

They also worried that denial of the project might cause the company to close the refinery, which could harm Benicia’s economy. Valero sales and utility user taxes represents more than 20 percent of Benicia’s General Fund.

Train and refinery spokespersons kept reminding the Council that because railroad operations are part of interstate commerce, they are under federal regulation, not local control.

Then a train, traveling below the area’s speed limit, derailed June 3 near the Oregon-Washington border. Although the Union Pacific locomotive was pulling the improved oil cars, the accident spilled 42,000 gallons of crude rail and ignited a fire that lasted 14 days. That began raising new questions about the safety of the reinforced tank cars and Union Pacific’s track inspection methods.

Federal investigators said Union Pacific was to blame, since it didn’t find broken bolts along the track, although a UP spokesperson, Justin Jacobs, had said the railroad’s May 31 inspection had detected no broken or damaged bolts.

During the long consideration of the divisive issue, Councilmembers themselves found themselves under fire. In previous months, Mayor Elizabeth Patterson, who sent emails about her personal findings about related matters, had her “e-alerts” and her objectivity questioned.

Tuesday night, Councilmember Alan Schwartzman responded to a recent Benicia Herald letter from project opponent Andres Soto, who had suggested Schwartzman had taken Valero money for his campaign. Schwartzman denied the accusation and criticized Soto’s behavior at past meetings. ”It’s disrespectful,” he said.

Councilmember Mark Hughes supported Schwartzman, saying he, too, had had his integrity questioned.

“Show a reasonable level of respect,” he urged, adding that Benicians didn’t like that style of campaigning.

But in Tuesday’s vote, they were unanimous.

After Councilmember Tom Campbell moved to deny the use permit, Councilmember Christina Strawbridge described the depth of her own research of various sides of the issue. What finally led her to oppose the permit was the June derailment and fire in Oregon.

Saying others, including those voting on the Phillips 66 Santa Maria rail extension, were waiting to see how Benicia would vote, she said railroads and those regulating them weren’t addressing derailments.

“This is a safety issue,” she said, adding that she would vote to deny the use permit.

Schwartzman said the matter was complex, and he had wanted to make a decision that wouldn’t embroil the city in a lawsuit. While he appreciated Valero’s decision to use safer tanker cars, he said, he couldn’t ignore the Oregon derailment. “I can’t vote for the project.”

Hughes said he agreed with the Surface Transportation Board’s guidance that the city couldn’t address railroad operations. He observed there was no such thing as a perfectly safe project. He said risk management consisted of looking at the probability something bad would happen, then at the consequences resulting from that happenstance.

Given UP’s and Valero’s safety record, especially the refinery’s plant-wide culture of safety, Hughes suggested the chance of a catastrophe was low. However, the consequences of an incident made him uncomfortable.

“There is too much uncertainty for me,” he said. The recent derailment gave him a signal.

“It was not something I could live with.”

Patterson said she, too, had made an extensive study of the matter, and said she was vilified when she tried to share her research. She said she had concerns about who would pay for a disaster cleanup, and worried how it would affect the city’s small businesses.

“I could not certify a flawed EIR,” she said, suggesting the Council deny the appeal and approve its findings at a future meeting.

In addition, she asked city staff to urge state and federal regulators to improve the way they regulate rail safety.

“That’s exactly what I want to do,” Campbell said.