Benicia is a “mini-petrostate” — What’s Next?By Grant Cooke, Benicia Resident and President Ag Tech Blends, September 24, 2020
I recently warned that Benicia faces a self-induced calamity. If the town doesn’t come to grips with the reality that it’s game over for the oil industry and that the tax revenue from Valero will end, the town’s future will be grim.
I suggested that by mid-century most, of it not, all Bay Area refineries—Valero included—would be shut. It may be sooner, as recently, Governor Gavin Newsom announced an executive order that would phase out gasoline-powered cars and pickups by 2035.
Most likely the big oil companies will do their best to delay this, but the direction is clear, California is turning away from fossil-powered vehicular transportation. Electric and hydrogen powered vehicles will be the norm sooner, instead of later.
The impact on Benicia and the other towns—Martinez, Rodeo, Richmond—will be significant. Unless those towns plan ahead—a troublesome chore for municipal governments—services will be drastically cut.
Secondly, if the refineries lock the gates and walk away, the cities will be stuck with the bill for cleaning up the hazardous waste that has accumulated for decades on the refinery property.
A couple of other points to consider. The first is the horrendous conflagrations that are besetting our state. Anyone who lives in California and doesn’t accept that climate change is real and life-threatening needs to talk to some of the state’s farmers who live that reality daily. Farmers know the weather and they know the ravages they are facing as the climate changes.
Climate change is not complex. It is caused by excess greenhouse gases caused by excess fossil fuel use. School kids can explain it.
The second is further from Benicia, but relevant. Over the last few weeks, a peace accord has been struck between Israel and the United Arab Emirates. Now Bahrain has joined and eventually Saudi Arabia and Iraq will also.
This is something I never dreamed I would see—peace in the Middle East. After all the trillions of dollars spent, the tragic deaths and wounded US soldiers, the horrific dismemberments by ISIS, and the millions of civilians who lost their homes, villages or lives; the wars are ending.
The stated reason for the accord is that the moderate nations are sick and tired of the Sunni and Shia extremists and decided that working with Israel with its military might and US backing is the lesser of two evils. These guys are ever pragmatists.
On the other hand, the unstated, but probably more significant reason, is the moderate nations, particularly UAE and Bahrain, have leaders who understand that they have to move away from oil-dependent economies. With a growing population of well-educated, underemployed and potentially restless citizens, change has to happen. The Middle East needs economic diversification with renewable energy, science, modern Western technology, risk capital and innovative thinkers, or the moderate nations are doomed.
This too is Benicia’s dilemma. Basically, the city is a mini petrostate with 45 percent of its tax revenue coming from Valero or related businesses. The city’s problem of dependency on oil tax revenue is the same as the Middle East nations, or Louisiana, or any other municipality that fails to plan for a non-carbon world. At least UAE and Bahrain have come to that realization.
If UAE and Bahrain can think this through, maybe Benicia can. The first step is to resist Valero’s and the union’s PAC to take over the city government in the November election. If the town’s oil interests and supporters control the city, planning for a diversified tax base won’t happen.
Vote for Steve Young and anyone else who is willing to refuse campaign contributions from Valero and the union PAC. That’s a simple step.
The next steps are going to be harder. The first is to bring the problem out in open. Ask Valero for their plans as the oil refinery winds down. What will be the decline in tax revenue? How much have they put aside for environmental cleanup? How many of their folks live in Benicia and what will be the job losses?
Supposedly, Valero says that it will be the “last man standing” or the final oil refinery left in the Bay Area. I doubt it. My bet is that Chevron in Richmond will hold out the longest because their corporate headquarters are in the Bay Area. Valero is a Texas company, which probably means they will be one of the first to shut.
The second step is that Benicia has to do what Bahrain is doing, namely diversify the tax revenue by moving from a fossil fuel to a knowledge-based economy. The world is full of examples of cities—Bristol, Vancouver, Melbourne, Singapore, come to mind—that have remade their economies.
There are several examples in the Bay Area—San Francisco, Walnut Creek, Livermore and Pleasanton.
The third step is probably the hardest still. The move to a robust knowledge-based economy with science, technology and innovation to produce wealth should be sub-regional—along the Straits. Benicia is going to have to cooperate with Vallejo.
Wealth is being generated all along 680 and both cities have to adapt quickly, or they will be left behind as Fairfield and Vacaville prosper by growing their knowledge and service-based economies.
Unfortunately, Benicia and Vallejo have flaws and neither has the ability to generate significant change. They do, however, have exceptional geography with beautiful waterfronts and spectacular views. They have more potential than other underdeveloped Bay Area cities, except maybe Richmond.
But neither can develop a robust new economy by themselves. They don’t have the resources or the willingness to overcome the differences that serious change requires.
There are no easy answers for remaking a city’s economy. It takes vision, hard work and a united citizenry with common goals and a willingness to change. Cities are like alcoholics; they usually don’t change their behavior until they reach rock bottom, or their livers give out.
The cities I mentioned that were able to remake their economies had remarkable good luck when a new company suddenly boomed—like Pleasanton with People Soft—or a brilliant and powerful leader like Willie Brown in San Francisco, who could wrench the existing power structure into action.
It is particularly hard for a small town like Benicia that has prospered along with a single industry and has a city council with decent folks but split agendas. Heaven knows there are small company towns—like Benicia—throughout the Rust Belt that are dead or dying because they waited until the gates were locked and the pink slips issued. Look what happened to Detroit.
The Bay Area is maybe the world’s center for science, technology, innovation and risk capital. It is an unparalleled combination that is being copied in China and on a smaller scale in Boston and Copenhagen. The mixture creates wealth like mountain snow creates mighty rivers. Despite the trillion-dollar successes of Apple, Google, Facebook and Sales Force, this era of magnificent knowledge-based companies is just starting. There are untold new wonders to be developed and decades to run.
It would be a pity if Benicia fails to participate.
####Grant Cooke is a Benicia resident and co-author of two books:
By Woodrow Clark II and Grant Cooke, published by Elsevier and available at Amazon:
President, AgTech Blends
During the 2016 resistance to Valero’s horrendous attempt to bring crude oil by rail into Benicia, I urged the city council to rethink its dependence on Valero for the bulk of its tax support. I suggested then that we move away from being a “company town” to one that embraced a more knowledge-based economic model with a diversified tax base.
I pointed out that as the world’s industrial nations shift from carbon-driven economies that threatened severe climate disruption and environmental catastrophe to a clean energy driven model, those mega-trend shifts would have significant impact on our little town.
I noted that the era of the Bay Area’s refineries was drawing to a close and that most—including Valero—would be closed before mid-century.
It was not a popular observation, even though at the time there was a rumor that all five Bay Area refineries were for sale, but title couldn’t change hands because the environmental cleanup was prohibitive. Besides, the oil industry’s business model of ever-increasing demand was suspect.
Well, then the nation’s leadership banked a hard right, the Environmental Protection Agency was gutted, the heavy oil interests broke free, and the carbon boys rode tall as the U.S. became a net exporter and one of the world’s major oil producers.
2019 saw the highpoint. Production was up 11 percent to new historic U.S. highs of over 12 million barrels per day. In 2018 Brent Crude’s price was over $70 per barrel. It slipped to $65 per barrel in 2019, but production was at a fever pitch.
And then it all collapsed. The Saudis and the Russians did a circular firing squad, OPEC stumbled, supply burgeoned, the novel coronavirus hit, and the U.S. economy tanked. At this spring’s lows, Brent Crude dropped to about $34 per barrel.
Now that the Saudis and Russians have given up their battle, Brent has budged a bit to $44 per barrel.
With the economic collapse so too has the demand for gasoline. Storage is full, demand is way down, supply is way up.
Valero as a refiner makes money when oil prices slide. As long as supply increases and oil prices drop but demand for gas is constant, money is made, profits are up, bonuses and dividends are paid.
Back in June 2018, Valero was in its glory, and the stock price was a couple of cents under $127 per share. The fall was ugly. By April 2020, it broke down to around $31. It has since rebounded a bit—what the financial folks colorfully describe as a Dead Cat bounce—to the mid-$50s. Most likely, it will turn down again and the dividend will be reduced.
What’s equally as devastating to Valero and the oil industry, is that Covid-19 and the subsequent economic collapse has pushed clean energy forward into the nation’s recovery plans. A huge national infrastructure plan is on the horizon, much of it encompassing renewable energy.
This is the TESLA tsunami with its market cap of $144 billion, and the growing consumer recognition that e-vehicles are better, faster, and cleaner than gas-powered cars. E-vehicles and hybrids are the growing segment of the auto market.
About 13 percent of California’s vehicles are e-vehicles or hybrids, and the percentage is growing with the state’s goal of 5 million zero emission vehicles on the road by 2030.
Pickups and commercial vehicles like trucks and forklifts are turning to electric motors for their increased power and torque. Even in the mining industry, electric, autonomous vehicles are being phased in to reduce costs and improve efficiency.
Eventually, there won’t be any more diesel trucks idling in Oakland’s port, and the incidence of asthma will drop significantly in nearby neighborhoods.
The oil industry needs to look no further for discouraging news than the recent announcement by General Motors, the largest U.S. automaker, that it is converting most of its fleet to electric power. Led by Cadillac, GM intends to have 20 electric nameplates by 2023, including an electric Hummer and a rumored Corvette that will hit 200 mph to compete with the 2021 Ford Mustang Mach-E.
Further, Southern California’s Hyperion just introduced the XP-1, a mind-blowing mega car powered by hydrogen with a top speed over 220 mph and a range of 1,000 miles on a tank of hydrogen. Europe already has hydrogen-powered buses, and hydrogen fuel cell technology will only hasten the development of carbon-free vehicles.
Finally, and what really should worry Valero and Benicia, is that Phillips 66 just announced that they are converting the Rodeo facility from refining crude oil to a renewable fuels plant using cooking oil and food wastes to produce motor fuels. The conversion should be finished in 2024.
The oil industry is not known for its vision and if Phillips sees that the carbon era is over, most likely it is.
As the world transitions away from carbon energy, the remaining crude-based Bay Area refineries will suffer, and some will lock their gates. The money isn’t there for the environmental cleanup, so the cities—Benicia, Martinez, Pinole, Richmond—will be left without tax revenue and worse, holding the bag for the hazardous waste.
The November election is critical for our nation, and equally important for our town. Some city council candidates are being funded by the oil industry, in a last-ditch effort to cement political power and influence, preserve profits, and probably re-introduce a Crude-by-Rail agenda.
The oil industry and union Political Action Committee, or PAC, has in fact set aside $250,000 this year to steer the 2020 election to their chosen candidates. It would be tragic for Benicia’s if they succeed.
The future for Benicia is not in clinging to the century-long carbon industry that is in decline. Benicia’s future is, or at least should be, in the knowledge-based economy. Science, technology and innovation are the drivers that create wealth and municipal security in the Bay Area. That is where the future is, not in the gas pumps.
Benicia is facing a severe challenge. The carbon-based tax structure that supported its amiable lifestyle with a full range of municipal services is ending.
Allowing a last gasp effort by the oil industry to control the city’s future is a terrible idea. That game is, and should be, over.
I’m voting for and supporting Steve Young for mayor. (And no, Steve has not approved this message.)
Grant Cooke is a Benicia resident and co-author of two books:
By Woodrow Clark II and Grant Cooke, published by Elsevier and available at Amazon:
President, AgTech Blends
Mental health professional: “In the past two weeks, my practice has exploded.”San Francisco Chronicle, by Steve Rubenstein and Nora Mishanec, Sep. 11, 2020
In a year of wondering what could possibly come next, the next things just keep on coming.
After eight months, they’re starting to add up, say mental health experts. And there’s lots of 2020 left, plenty of time for more next things.
“I’ve been hearing the word ‘apocalyptic’ a lot,” said San Francisco psychiatrist Scott Lauze. “I’m doing a tremendous amount of hand-holding these days. You can’t even rely on the color of the sky anymore.”
Lauze, in private practice for three decades, said he had never seen the call for his services take off like right now.
“In the past two months, there was a significant uptick in demand,” he said. “In the past two weeks, my practice has exploded.”
Pandemic, social unrest, heat waves. Wildfires. Smoke. Mass evacuations. Therapists call them stressors, and there has been no shortage of things to get stressed over.
And this just in: ash raining from the heavens, and darkness at noon.
“I couldn’t fall asleep,” said San Francisco nurse Valieree MacGlaun, who works the night shift and was walking home Friday on Divisadero Street from the VA hospital in her scrubs.
She said she feels overwhelmed, though her job is to help other people overcome feeling overwhelmed.
“This is my calling,” she said. “But you have to take care of yourself.”
Connie and Michael VonDohlen flew from their home in Tennessee to San Francisco on Wednesday to attend their daughter’s wedding, just in time for the dark orange daytime skies that made some locals say it felt like living on Mars. Streets were deserted. The VonDohlens, who don’t seem to shock easily, said they were shocked.
“We thought we had gone into the Twilight Zone,” Michael VonDohlen said. “I was expecting zombies to jump out from every doorway.”
“The fires, added to the pandemic, and the inability to escape — all that adds to the potential for hopelessness,” said emergency room psychiatrist Yener Balan, head of behavioral health services at Kaiser Permanente Northern California.
Calamity and malaise are part of the human condition, he said, and pondering the world wars endured by prior generations can put a virus or a wildfire in perspective.
Coronavirus live updates: SF urges people to stay inside due…
“As a species, we are resilient,” he said. “Many generations have seen this level of calamity.”
Taking care of oneself, living in the moment, checking in with family and friends, getting enough exercise and sleep — those are the keys to coping, Balan said. And turning off the TV and the computer when enough is enough — that helps, too. It also reduces exposure to the added stresses of a national election and its apocalyptic nuances.
“Just when you think you’re beginning to deal with one disaster, another one comes along,” said David Spiegel, a psychiatry professor at Stanford University. “Patients who have been stable are experiencing an exacerbation of depression and anxiety.”
The year 2020, he said, is turning out to be a “remarkable test of everyone’s ability to cope.”
Trying to cope in Alamo Square, while holding three dogs on a leash, was professional dog walker Michael Waddell. He used to wear a plain mask, for the virus. Now he wears a mask with an air filter, for the virus and the smoke. Different disaster, different mask.
Two in 5 U.S. adults say they are “struggling with mental health or substance abuse” since the pandemic hit, according to a report from the Centers for Disease Control and Prevention. And the “prevalence of symptoms of anxiety disorder” were triple those of last year, the report added.
Even if psychiatrists are doing more business these days, Waddell said, dog walkers aren’t. Business has largely fallen off as people staying home can walk their own dogs.
Waddell’s usual complement of dogs is six. Losing half his income, Waddell said, “has added more to my immediate stress than the smoke or the wildfires.”
Dogs, who have no problem living in the moment, help. So do hobbies, said Melissa Smith, who was waiting for 5-McAllister bus. She said her therapy was to try “old lady hobbies.”
“This is the perfect excuse to take up knitting,” she said. “It’s a good outlet for the frustration. You need something to channel your energy.”
Smith was on her way home, where the knitting was waiting.
“What better place to practice peace than the middle of a storm?” she said. “I just think, after this, we are all going to be so resilient.”