Category Archives: California Regulation

Solano County Says Valero Benicia Refinery Violated State Regulations in March Shutdown

Valero Benicia Refinery facing stiff fines

KQED California Report, by Ted Goldberg, September 5, 2019
The Valero refinery in Benicia. (Craig Miller/KQED)

Solano County inspectors documented a long list of shortcomings and inadequate procedures at Valero’s Benicia oil refinery that contributed to a major pollution release from the facility earlier this year, newly released county documents show.

The county’s Department of Resource Management documented violations of eight separate state regulations. The infractions included failure to fix important sensors in a refinery furnace unit, infrequent inspections of key equipment, and failure to have an operating plan in place to deal with unexpected refinery conditions.

Solano’s probe relied in part on Valero’s root cause analysis of the shutdown, which found that one of the worst refinery incidents in the Bay Area in years was caused by a mistake made months earlier.

Both reports focused on tubes in the refinery’s furnace that heat up crude oil before it’s routed to other parts of the facility for processing. County and refinery officials say those furnace tubes were damaged during maintenance work last November, which caused the devices to fail and contributed to the plant’s malfunctions in March.

The Valero complex ended up belching out a massive amount of black sooty smoke, which led to health concerns for people living nearby.

The refinery’s subsequent closure contributed to a statewide spike in gasoline prices and prompted investigations by several government agencies, renewing attention on the refinery two years after a power outage caused a major release of toxic sulfur dioxide in the area.

Valero spokeswoman Lillian Riojas declined to comment directly on the company’s violations. Instead, she pointed to the company’s May filing with the Securities and Exchange Commission in which it reported it’s facing more than $342,000 in fines in connection with the incident. The company told the SEC it expects to face $242,840 in proposed penalties from Solano County and $100,000 from the Bay Area Air Quality Management District.

Valero’s root cause analysis, completed in July, examines a series of problems that led to the refinery malfunctions.

Company inspections during the refinery shutdown found that furnace tubes were bulging and leaking. Valero says when the facility was restarting a unit last November, a safety valve improperly “lifted,” allowing crude oil to bypass one of the refinery’s furnaces.

Valero says “it was not appreciated at the time” that allowing the bypass “exposed the furnace tubes to elevated temperatures.” Extreme heat gradually deformed the tubes and allowed a solid substance called petroleum coke to form inside. Valero’s analysis concedes that the deteriorating conditions were “not timely identified and mitigated, leading to the tubes’ subsequent failure” and the March refinery malfunctions.

Solano County’s investigation reported that carbon monoxide and oxygen sensors in the refinery furnace were not operational for at least three years.

“Proper functioning sensors would have provided an indication that the furnace was malfunctioning to Valero staff, allowing them to act sooner to correct the condition and prevent additional release,” said Terry Schmidtbauer, the county’s assistant director of resource management, in an email.

“The issue with the furnace upset the system,” Schmidtbauer said.

Those system issues became more evident in early March as two other refinery components experienced problems. One was a fluid coker, which heats up and “cracks” the thickest components of crude oil processed at the refinery. Another, a flue gas scrubber, removes fine particles before gases are released from the facility’s smokestacks.

Malfunctions with those devices led to an increase in carbon monoxide levels, according to Valero, To reduce those levels, refinery crews ended up increasing the temperature on the furnace tubes, thus accelerating their deterioration.

There was little liquid in the tubes, which puts them at risk of damage, according to Professor Eric Smith of Tulane University’s Energy Institute, who specializes in refinery operations.

“One result is thermal degradation of the metal tube,” said Smith, who reviewed company and county findings. “Another effect is that the liquid that does make it through the tube is converted into petroleum coke.”

That dynamic led to the release of sooty smoke and resulted in elevated levels of particulate matter and a health advisory.

County inspectors discovered several problems with lines that carry petroleum coke. On the day the refinery was shut down, one was leaking. Valero staff told Solano officials in April another line had failed five times in the last three years.

The county’s Department of Resource Management has ordered Valero to make a series of changes, some of which it has already completed. They include orders to reduce petroleum coke releases, new procedures for preventing the overheating of furnace tubes and increased training.

Solano County’s Schmidtbauer said the department was still assessing what penalties it will levy against the refinery.

Local air regulators issued 12 notices of violation against Valero. Ralph Borrmann, a spokesman for the air district, said the agency’s probe is not yet complete.

An investigation by California’s Division of Occupational Safety and Health, Cal/OSHA, is expected to wrap up in the coming weeks, according to agency spokesman Frank Polizzi.

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    California’s top oil regulator sacked after doubling fracking permits

    California Gov. Gavin Newsom orders dismissal of state’s top oil regulator

    By Janet Wilson, Palm Springs Desert Sun, July 11, 2019, 11:09 p.m. ET
    California Gov. Gavin Newsom presents his revised 2019 budget proposal May 9, 2019, in Sacramento, California.
    California Gov. Gavin Newsom presents his revised 2019 budget proposal May 9, 2019, in Sacramento, California. (Photo: Andrew Nixon / Capital Public Radio)

    PALM SPRINGS, Calif. – California Gov. Gavin Newsom on Thursday directed his secretary of natural resources to fire Ken Harris, the state’s top oil regulator, after learning from The Desert Sun/USA TODAY and watchdog groups that fracking permits have doubled without his knowledge since he took office and that seven supervisors charged with regulating the industry own shares in major oil companies.

    Ann O’Leary, chief of staff to Newsom, sent a letter to Wade Crowfoot, California’s secretary for Natural Resources, asking him to immediately make several changes in the Department of Conservation, including firing Harris.

    Harris is the head of the Division of Oil, Gas, and Geothermal Resources, also known as DOGGR. He could not be reached for comment Thursday evening.

    O’Leary also told Crowfoot to “continue at full pace the investigation you have already started related to the allegations that employees at DOGGR have holdings in energy companies, which could constitute actual or apparent conflicts of interest, and take the maximum disciplinary action appropriate under law.”

    Conflicts of interest: Watchdog groups urge California governor to fire oil regulators

    Ken Harris, Californiia Oil and Gas supervisor and head of the Department of Conservation’s Division of Oil, Gas, and Geothermal Resources.
    Ken Harris, California Oil and Gas supervisor and head of the Department of Conservation’s Division of Oil, Gas, and Geothermal Resources. (Photo: Calfiornia Dept. of Conservation)

    In the meantime, she directed him to ensure that all employees and contractors who own oil or gas stocks recuse themselves from all permitting decisions pending individual reviews based on new conflict rules that are being formulated.

    On Wednesday, The Desert Sun reported the pace at which fracking permits are issued has doubled since Newsom took office in January, and thousands of permits for new and re-used oil and gas wells also have been approved, angering environmental and public health groups who hoped for a phase-out of the state’s billion-dollar industry following the retirement of Gov. Jerry Brown.

    The Desert Sun also reported on the findings of two watchdog groups, Consumer Watchdog and FracTracker Alliance, who uncovered records showing that top state regulators and engineers held investments in Exxon Mobil, Chevron, BP, Valero and other petrochemical giants.

    Almost half of the 2,300 well permits issued in 2019 have benefited oil companies invested in by agency officials, the consumer groups said.

    Consumer Watchdog and FracTracker Alliance uncovered the regulators’ personal investments and permit data through public records requests, and the two groups shared the documents with The Desert Sun and the USA TODAY Network.

    “This is a good start,” said Jamie Court, president of Consumer Watchdog. “This shows the governor wants to change the culture at the agency to make sure it’s free of conflicts and safety comes before the oil companies’ interests. The next move has to be to hold accountable Mr. Harris’ supervisors, who were well aware that this was an agency that was permitting wells with the oil companies’ interests first in its mind and the public last.”

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      Oil and gas production in California – Extraordinary?

      Repost from Legal Planet

      Guest Bloggers Deborah Gordon and Frances Reuland: Is California Extraordinary? Its Oil Resources Certainly Are

      Facts About California’s Oil and Greenhouse Gas Emissions

      Despite ongoing federal rollbacks to environmental regulations, California has the right to set its own clean air standards because it is truly extraordinary. Truth be told, the compelling circumstances that first set in motion California’s vehicle emissions standards remain entirely valid. And there are four recent conditions, related to California’s oil supply, production, and refining, that bolster California’s case against the Administration’s threat to strip California of its clean car clout.

      In 1967, then governor Ronald Reagan adopted statewide vehicle emissions regulations to address California’s severe air pollution. Shortly thereafter, when the federal Clean Air Act was adopted, California was granted a waiver to set its own tougher vehicle emissions standards. Over the decades, California has repeatedly ratcheted up these regulations to also include greenhouse gas (GHG) emissions. In order to maintain its waiver, California’s emissions standards must be deemed necessary to meet “compelling and extraordinary conditions.” Historically, these referred to the state’s unique meteorology, geography, population, and air pollution levels.

      All of these still hold true: the sun shines strong, the weather is warm, mountains wall in emissions from cars and other sources, one in eight American drivers reside here, and the air is still very dirty.

      But there are four more extraordinary circumstances, all relating to California’s oil resources, that need to be factored into the case for preserving and strengthening California’s clean car program.

      These circumstances are bolstered by the fact that California’s gasoline and diesel markets are geographically isolated from other locations in the United States that produce refined products. As such, California is essentially self-sufficient, refining its own transport fuels. Little, if any, gasoline and diesel are obtained from outside the state to balance out supply with demand.

      All of the oil California produces ends up in its own refineries, and this is not an environmentally-friendly affair, especially in a state that has taken the lead on clean air and climate change. According to the Oil Climate Index (OCI)—an open source tool (developed by Gordon and her partners at Stanford and the University of Calgary) that compares the climate impacts of global oils—extracting and refining oil in California is dirtier than anywhere else in the United States. Weakening California’s vehicle emissions standards will force Californians to consume more of the state’s dirty oil longer into the future. This will increase pollution levels and elevate risks to public welfare in the state with the nation’s worst air pollution—69 percent of counties had unhealthy air on 33 days last year.

      California’s oil resources are extraordinarily strained

      As Texas, North Dakota, New Mexico, and overall U.S. oil production rises, California production is in decline. Since 1985, California’s crude oil production has dropped steadily: the state now produces under 500,000 barrels per day, less than half of its output 30 years ago. California’s aging oil fields, unstable seismic geology, and tight environmental rules all work to limit oil production. Successfully running its oil refineries at their current capacity of 2 million barrels a day to meet Californians’ gasoline and diesel demands requires the state to feed the entirety of its domestic oil into its refineries and then import 70 percent more oil. If realized, Trump’s plan to weaken the state’s clean car standards would increase gasoline and diesel demand, exacerbating the state’s already-strained oil resources and further pressuring security of its energy supplies.

      California’s oil resources are extraordinarily dirty

      California’s oils have some of the largest carbon footprints worldwide. Producing, refining, and consuming a barrel of California oil emits more GHGs than other global barrels. For example, the state’s largest oilfield, Midway Sunset, is estimated to be more carbon intensive than Canada’s oil sands. California’s South Belridge and Wilmington fields are also among the highest-emitting in the nation. Trump’s plan would increase California’s GHG footprint, countering the state’s climate goals.

      California’s oils are extraordinarily energy intensive

      Aging oils in California require significant amounts of energy to extract and refine, much more than newer resources in North Dakota, the Gulf of Mexico, and elsewhere. Fossil fuels, like natural gas and diesel, provide these extra energy inputs. A barrel of California’s Midway Sunset oil, for example, uses one-third of its total energy just to extract and refine it into petroleum products like gasoline and jet fuel. Likewise, California’s complex refineries consume nearly five times more energy to turn the state’s oil into marketable products than simpler refineries. Much more manpower and money are spent bringing California oil to market than elsewhere in the country.

      California’s oils are extraordinarily undocumented

      Unlike other states and countries, California does not document its oil quality. The problem is that California’s oil resources are more dangerous to handle than most global oils. In 2011, for example, a California oil field worker was buried alive when the ground gave way as steam was being cycled through the oil field. California’s complex oil was documented long ago by the federal government, but recommendations for oil data transparency have gone unheeded for over a century. These large information gaps introduce new environmental risks for California.

      California’s 30 million motor vehicles that far outnumber any other state are a major source of air pollution. Clean car rollbacks are a threat to the state’s environmental progress—and energy security. The state needs to fight hard to preserve its pioneering vehicle emissions standards on behalf of itself and several U.S. states and international provinces that have already adopted them. Beyond preserving the standards in place, state policymakers should also consider tightening their emissions standards if they are going to make real headway addressing climate change. In this historic fight, California can draw on its extraordinary status—namely its exceedingly dirty, depleting oils that are unusually energy intensive and fundamentally unknown.

      Deborah Gordon is the director of the Energy and Climate Program at the Carnegie Endowment for International Peace and a senior fellow at the Watson Institute for International & Public Affairs at Brown University. Frances Reuland is Carnegie’s James C. Gaither Junior Fellow in the Energy and Climate Program.

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        SB100 – California Assembly Passes Historic 100% Carbon-Free Electricity Bill

        Repost from the Sacramento Bee
        [From GreenTechMedia.com: “The world’s 5th largest economy will have to eliminate carbon emissions from electricity by 2045.”]

        Plan to power California with all renewable energy clears major hurdle

        By Taryn Luna, August 28, 2018 05:29 PM

        The California Legislature is poised to send a bill to the governor that would require all retail electricity to be generated from solar, wind and other renewable energy sources by 2045.

        Despite objections from utilities and oil companies, the Assembly voted 43-32 to eliminate fossil fuels in the state’s energy sector on Tuesday. Senate Bill 100, introduced by Sen. Kevin de León, must return to the Senate, and is all but guaranteed to reach the Gov. Jerry Brown’s desk before the legislative session ends this week.

        “When it comes to fighting climate change and reducing our reliance on fossil fuels, California won’t back down, ” de León said. “We have taken another great stride toward a 100% clean energy future.”

        Climate activists and environmental groups have hailed the plan as a critical step forward in the battle against climate change. The bill’s passage in California will serve as a symbolic strike against the Trump administration, which has steadily attempted to erode environmental protections, roll back fuel economy standards and weaken existing rules meant to reduce greenhouse gas emissions from coal-fire plants.

        Opponents have long argued that California’s efforts to combat climate change are futile and fail to make a substantial difference as the planet continues to warm. Some Assembly members warned the bill would hurt workers in the fossil fuel industry and raise prices for utility customers.

        “We pass all these goals for renewables, but at the same time our families back home will pay the cost with an increase in the electric bills every year as we try to achieve this,” said Assemblyman Devon Mathis, is, R-Visalia.

        The bill is opposed by Pacific Gas and Electric Company, San Diego Gas And Electric Company, Western States Petroleum Association, Agricultural Council of California and more than two dozen others.

        The proposal toughens regulations in a state seen as a global leader on climate change.

        State lawmakers set a goal two years ago of reducing greenhouse gas emissions to 40 percent below 1990 levels by 2030. Gov. Jerry Brown and legislative leaders last year extended the state’s cap-and-trade program, a market-based system that allows polluters to buy permits for the greenhouse gases they emit, through 2030. Lawmakers described the cap-and-trade program as the state’s best tool to encourage companies to reduce their carbon footprint and allow the state to reach its greenhouse gas goals.

        De León initially introduced SB 100 in 2017 and the Assembly held the bill, effectively killing it for the year. In addition to setting the no-carbon standard, the bill would revise interim goals along the way. The bill bumps up an existing target by four years to hit 50 percent renewable energy in 2027 and sets the state on track to meet the 60 percent threshold by the end of 2030.

        Former Gov. Arnold Schwarzenegger and former Vice President Al Gore wrote separate letters of support for SB 100. Lt. Gov. Gavin Newsom pledges to issue a directive on his first day of office, if elected, to put California on target to achieve 100 percent renewable energy. He has not publicly endorsed SB 100.

        Gov. Jerry Brown, who is hosting a global climate summit in San Francisco next month, has also remained silent on the proposal.

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