On December 20, Benicia’s City Attorney announced that she had been advised by Valero’s attorney that the refinery is no longer planning to sue the City of Benicia over its failed Crude By Rail proposal.
While this is welcome news, worthy of celebration and thanksgiving, Valero’s decision surely was more nuanced than the simple reason given, that it wants to maintain good relations with the City.
Everyone in the city is happy about that – we all want good relations, and no one wanted the issue to drag on in the courts, at great expense in time and money.
But it must be noted that a Benicia lawsuit by Valero would have failed, on multiple grounds. Valero’s best legal advice must have been to quit, or risk additional losses. That advice would’ve been resisted if at all possible, not only for local refinery interests, but on behalf of the wider oil and rail industries.
Valero Benicia was a potential precedent-setting case, with implications for major corporate financial holdings all across the US and Canada. There must have been immense pressure on Valero to sue. The industries needed to win a case claiming that federal preemption laws are enough to overrule local land use regulatory authority.
But with immense activist opposition setting the pace; with California’s Attorney General weighing in and a dozen environmental attorneys, engineers and environmental analysts offering significant commentary during the review process; and with the Federal Surface Transportation Board denying Valero’s last-ditch petition, a lawsuit had little chance of success.
Valero lost that argument here, but no one should rest easy. The oil and rail industries will surely look for another situation where they can more successfully press their unlimited right to endanger health and welfare under federal preemption laws.
The growing movement against oil trains needs to remain active and alert.
As I prepare to head to the polls on Tuesday, my decisions have finally been made. Not all were difficult to make: it’s of historic importance that we NOT elect Donald Trump. I will be voting for our first woman president, Democrat Hillary Clinton.
My vote for Kamala Harris for Senate is a no-brainer: as California Attorney General, Harris was our highest-ranking ally in the David and Goliath battle against oil trains here in Benicia! (With many thanks to Deputy AG Scott Lichtig.)
Mariko Yamada will need every one of our votes if she is to beat the money-machine of her opponent, Bill Dodd. Dodd only recently became a Democrat, has accepted huge donations, and benefited from independent expenditures by big corporate interests, including the oil and gas industries. I’ve known Mariko for years – she is to be trusted. I once told her I’d vote for her for President of the U.S.!
At the Solano County Supervisor level, it gets a bit hairy for me. I respect, know and like both Mike Ioakimedes and Monica Brown. I share progressive Democratic values with both of them. Earlier, I endorsed Mike when he weighed in against Valero’s crude by rail proposal. As an influential longtime Benicia leader, his added voice was highly significant at that time when we were facing into a final City Council vote on crude by rail. Monica strongly opposed Valero’s proposal, too, but when I’m forced to mark my ballot, I’ve decided I’ll vote for Mike Ioakimedes. Sorry, Monica.
My focus has been almost exclusively on local Benicia races. I am actively supporting Mayor Elizabeth Patterson’s re-election, and Planning Commissioner Steve Young for City Council. I like several of the other candidates for City Council, but I’m focusing entirely on electing Steve. Here are my previous posts on Elizabeth and Steve:
Unlike THE DONALD and many of his right-wing cohorts, you and I will accept the outcome of a fair and impartial election and join forces with our newly elected leaders, working for a better future. See you on the other side of election day!
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.
California attorney general subpoenas refiners on gas prices
Associated Press, Updated 2:57 pm, Friday, July 1, 2016
The California attorney general has issued subpoenas to several oil refiners to learn how they set gasoline prices, which are consistently higher in California than in most other states.
Chevron Corp., Exxon Mobil Corp., Valero Energy Corp. and Tesoro Corp. confirmed on Thursday that they have received subpoenas in recent weeks.
The attorney general is making a sweeping request for information about gasoline supplies, pricing, and maintenance shutdowns that can temporarily create shortages and increase prices, according to people familiar with the investigation. The people spoke on condition of anonymity because they were not authorized to discuss details of the subpoenas.
The requests came from Attorney General Kamala Harris, a Democrat who is running for the U.S. Senate. Kristin Ford, a spokeswoman for Harris, declined to comment on whether her office was investigating.
Chevron spokesman Braden Reddall said the company received a subpoena from the attorney general’s office and would cooperate with the investigation.
Valero received a subpoena “and we will respond accordingly,” said spokeswoman Lillian Riojas.
Spokesmen for Exxon and Tesoro also confirmed the requests for information. None of the companies would discuss the matter further.
California perennially has among the nation’s highest prices for gasoline. This week, the average for a gallon of regular was $2.90 in the state compared with the national average of $2.29, according to the AAA auto club.
Some consumer advocates have charged that refiners drive prices higher by tactics such as frequent or overly long plant shutdowns.
Refineries are routinely taken offline for maintenance, and there have been longer-lasting outages after disasters such as the explosion in February 2015 at an Exxon refinery in Torrance, near Los Angeles.
Gordon Schremp, senior fuels specialist with the California Energy Commission, said 2015 saw an “extraordinary price spike in magnitude and duration in California,” which a commission advisory committee has been investigating.
“We are aware that they were doing this,” Schremp said of the attorney general’s investigation, “because off and on they’ve talked to us about what was going on with the 2015 market, important factors that can cause spikes in the markets.”
Industry officials blame high prices on California’s stricter clean-air requirements, which they say add costs and make it more difficult to import gasoline from other states when there is a price spike.
Rebecca Adler, a spokeswoman for the American Fuel & Petrochemical Manufacturers, called the allegations in the subpoenas baseless.
“We are confident that nothing will come of this,” she said.
The group Consumer Watchdog has repeatedly called on Harris to investigate oil companies over California gas prices and welcomed news of the investigation.
“It’s great that we have a law enforcement official asking questions about both supplying the market and equitable pricing within the market,” said the group’s president, Jamie Court.