Category Archives: Martinez CA

Shell Martinez moves to clean up its act; will NOT receive crude by rail

Repost from The Martinez News Gazette
[Editor: Unconfirmed reports suggest that the light, sweet crude delivered to Shell by ship will first be transported across Canada by rail.  – RS]

Shell Martinez to shut down flexicoker, reduce green house gas emissions

Rick Jones | May 18, 2014

MARTINEZ, Calif. – In a major undertaking billed as the “Greenhouse Gas Reduction Project,” Shell is proposing to upgrade and modernize its Martinez refinery to significantly reduce greenhouse gas emissions, save water, improve efficiency, and stay relevant in the changing energy landscape, Shell representatives said Tuesday.

In a presentation to the News-Gazette staff, Shell Martinez Refinery General Manager Paul Gabbard stated the renovated refinery will become “cleaner, safer and more efficient – with less impact on the environment and our community.”

Also in attendance at the presentation was Steve Lesher, manager of communications and sustainable development; Teresa Makarewicz, health and safety director and Erin Hallissy, public affairs representative and communications.

The $450 million upgrade project will allow Shell to refine more light, sweet crude oil. With current production and transportation methods, heavy crudes have a more severe environmental impact than light ones, the representatives said. Heavy crude refining techniques require more energy input than light crude.

“In my view, in my career it’s rare when a project makes so much business sense and it makes environmental and community sense at the same time,” Gabbard said. “It’s a very nice marriage of what the world wants us to do and what we think we have to do anyway.”

The Global Warming Solutions Act of 2006 (AB 32) requires businesses to reduce greenhouse gas emissions to 1990 levels by the year 2020. Gabbard said this project gets the Shell Martinez Refinery on track for that goal.

According to Shell, the project will cut greenhouse gas emissions at the refinery by 700,000 metric tons a year – the equivalent of taking 100,000 cars off the road.

Water use at the refinery will be reduced by 15 percent, saving 1,000 gallons a minute.

A significant environmental impact of heavy crude is carbon dioxide output, which can be as much as three times that of light crude of the same quantity.

“The climate change, AB 32, required us to go more carbon friendly,” Gabbard explained. “It changes our business model. We’ve had this business model for 30 years and now we are going to change it up. What are we going to do for the next 50 years? It dovetails, in our view, to exactly what the world, state and community wants us to do.”

The project will create over 300 temporary construction jobs for local workers represented by local trade unions, reps said.

Major events conducted at the refinery where 1,500 workers are brought in for maintenance will go from four per year down to three per year, Gabbard pointed out.

The refinery, which will mark its 100th year in Martinez in 2015, receives heavy crude which requires refinement that is heavy in carbon emissions.

Gabbard said the plant will shut down the flexicoker, built in 1983, one of the major operating units in the facility. The ever-present blue flare from the coker’s column will no longer be seen.

The modernization will cut sulfur dioxide emissions by up to 25 percent, with no increase in NOx (nitrogen oxide). Electricity use will decline, and the upgrade does not expand the refinery nor increase the amount of oil processed.

“The amount of crude we bring in, the amount of product we send out, won’t change,” Gabbard said.

What will change is the amount of crude being brought in by tankers. The pipeline from the Central Valley of California brings the heavy crude type; Shell has been receiving less and less from that source as the oil fields dry up. With the change to a lighter crude, the amount of crude coming to Martinez via pipeline will drop further.

With the transport of crude by rail a significant issue in the East Bay, Gabbard was quick to say that Shell does not and will not receive crude by railway.

“We are not going to [receive] rail crude, we are not building rail crude facilities,” Gabbard said. “There will be no crude rail unloading for Shell in Martinez.”

The refinery’s physical footprint will decrease by eliminating a major processing unit. Due to higher assessed value, Shell’s property taxes will increase.

The proposed project will go through full county review, including an Environmental Impact Review (EIR). On June 3, Shell will meet with the Contra Costa County Board of Supervisors to seek approval of the EIR consultant. Preliminary paperwork has already been submitted to the county. The hope is to conclude the permit process by May 2015.

Construction could start mid-2016, with the project being completed by 2018.

Shell anticipates using local labor for the project by mid-2015.

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    Martinez Shell Refinery to refine more light Bakken crude

    Repost from Bloomberg

    Shell Considers Retiring California Coker Amid Shale Boom

    By Lynn Doan May 19, 2014

    Royal Dutch Shell Plc (RDSA), Europe’s biggest oil company, is considering retiring one of two coking units at its only refinery in California as the company seeks to run lighter crude at the plant.

    The company has applied to county regulators for a permit to shut the flexicoker at the 156,400-barrel-a-day Martinez refinery northeast of San Francisco, a move that would shrink the plant’s reliance on heavy oils and cut its greenhouse-gas emissions by 15 percent, Destin Singleton, a Shell spokeswoman, said May 16. The unit helps convert the denser crude into more valuable products such as diesel and gasoline.

    Shell is considering the shutdown as hydraulic fracturing and horizontal drilling unleash record volumes of light oil from shale formations across the middle of the U.S. California’s refiners, lacking pipeline access to the growing crude supplies, are bringing in the most ever by rail as they work to counter shrinking production within the state and from Alaska.

    “The reality is that we are looking at each individual refinery and making economic decisions as to what is the most optimal feedstock,” John Abbott, downstream director for The Hague-based Shell, said in an interview at Bloomberg’s headquarters in New York May 16. “This is one of the most competitive assets on the West Coast of the U.S. and in California.”

    Industry refining margins on the U.S. West Coast, a rough indicator of profitability, averaged $7.62 a barrel in the first quarter, almost twice the $4.07-a-barrel coking margin on the Gulf Coast, Shell said in a statement April 30.

    Train Deliveries

    While the Martinez refinery doesn’t have the equipment to unload oil from rail cars, it receives crude by pipeline from a complex in Bakersfield, California, that takes train deliveries, Singleton, based in Houston, said by e-mail. The refinery would continue to receive oil by pipeline and vessel using existing infrastructure once the coker is shut, she said.

    Heavy crude pumped from California’s San Joaquin Valley dropped 35 cents to $95.20 a barrel, data compiled by Bloomberg at 2:01 p.m. New York time show. Light crude from North Dakota’s Bakken formation gained 82 cents to $98.59 a barrel.

    Crude Mix

    “Overall, heavy crudes are a big part of our current mix,” Singleton said. “We’ll be processing the same crudes we refine today, but the mix will be lighter — meaning significant reductions in greenhouse gas emissions, less electricity use, and more efficient operations.”

    A delayed coker, which was installed at the refinery in the 1990s, based on air regulatory filings, will remain in service, she said.

    Refiners from Tesoro Corp. (TSO) to Valero Energy Corp. (VLO) are working to bring more shale oil to their plants on the U.S. West Coast by rail. Trains delivered 395,053 barrels of oil to California in March, a record volume for that month, the most recent data available from the state Energy Commission show.

    Shell is seeking permits to build a rail complex at its Anacortes refinery in Washington state that would allow the plant to unload oil from as many as six trains a week, regulatory filings show. The company has also said that it’s carrying upgraded crude to the West Coast from its Scotford oil-sands upgrader in Canada.

    Crude Imports

    Martinez imported 903,000 barrels of medium-to-heavy crude in February from Canada, the most recent data available from the Energy Information Administration show. The complex already processes some lighter crudes, like Bakken oil, along with heavier feedstock from California’s Central Valley, Singleton said.

    Contra Costa County regulators are expected to prepare a report on the environmental impacts of the coker retirement, and the public will have a chance to comment on the plan during that process, she said.

    Chevron Corp. (CVX)’s Richmond refinery, west of Martinez, is also applying to local regulators for a project that would change its crude slate. The plan would replace a hydrogen plant and increase capacity at the fluid catalytic cracker’s hydrotreater and sulfur-recovery system to run higher-sulfur oils.

    To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

    To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net David Marino, Richard Stubbe

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      Martinez to Benicia: Oil Refinery Protest Draws About 100 Demonstrators

      Repost from the East Bay Express
      [Editor: Many thanks to the East Bay Express for excellent coverage of this colorful and important event (below).  Benicia old timers were heard to say that sleepy little Benicia has probably NEVER seen a protest demonstration like this.  Check out two facebook pages for great photos of the day: facebook.com/stopcrudebyrail AND facebook.com/events/220829548127114/?ref=22.  – RS]

      East Bay Oil Refinery Protest Draws About 100 Demonstrators

      Jean Tepperman —  Mon, May 19, 2014

      Accompanied by a four-kayak flotilla and a fifth-generation Martinez resident on horseback, about one hundred environmental activists marched seven miles from Martinez to Benicia on Saturday to protest the local toxic pollution and global climate impact of Bay Area oil refineries. The march was spearheaded by a Bay Area group affiliated with Idle No More, an organization of Canadian First Nations people fighting development of the tar sands oil fields in Alberta and other environmentally destructive projects on their traditional lands.

      refinery_walk1_5-17.jpeg

      Kelly Johnson

      Specific targets of the protest were proposed expansion projects at the Chevron (Richmond), Valero (Benicia), and Phillips 66 (Rodeo) refineries, a crude oil transportation terminal in Pittsburg planned by energy infrastructure company WesPac, and the major investment of Shell (Martinez) in the Canadian tar sands mines. The Saturday march was the second of four planned Refinery Corridor Healing Walks — the first, from Pittsburg to Martinez, was held in April, and future walks are planned for June and July, ending up at Chevron in Richmond. The series of walks aims to “connect the dots” to “bring awareness to the refinery communities, invite community members to get to know one another, and to show support for a just transition beyond fossil fuels,” according to the group’s website.

      At a gathering at the Martinez Regional Shoreline before the march, a winner of this year’s Goldman environmental prize, South African Desmond D’Sa, described the high rates of leukemia, cancer, and asthma in his home town of Durban and the community’s struggles against Shell Oil there, urging the crowd to “fight them (refineries) wherever they are.” Penny Opal Plant, of the East Bay Idle No More group, said she only recently began to conceive of the refinery corridor as a total area suffering from the “immense devastation” caused by oil refineries.

      Richmond residents have long protested pollution from Chevron, most recently the toxic explosion that sent 15,000 seeking medical treatment in August 2012. Benicia residents have also organized to oppose environmental hazards. In the last year, local groups have also formed in Pittsburg, Crockett-Rodeo, and Martinez to protest refinery expansion and transportation plans, including major increases in the amount of crude oil to be carried by rail through the Bay Area and beyond.

      Describing the dangers of mining, refining, and transporting oil, and looking ahead to a future free from fossil fuel, Opal Plant said, “We are Mother Earth’s immune response awakening. We’re born at this time to do this thing.”

      refinery_walk2_5-17.jpeg

      Kelly Johnson

      The group’s route first went through the Shell refinery, then over the bridge to Benicia, with a view of the Valero refinery there. From a hilltop vista point next to Carquinez Strait, Benicia activist Marilyn Bardet pointed out refineries and planned oil industry project sites, as well as the environmentally Suisun Marsh. Railroad tracks leading to the Valero refinery, she said, go right through the marsh. A spill of tar sands crude oil, she added, would be impossible to clean up because the oil is so heavy it would sink and cause irreparable damage.

      The next Refinery Corridor Healing walk is scheduled to go from Benicia to the Phillips 66 refinery in Rodeo on June 14.

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        CCTimes: concerns over crude by rail in Martinez

        Repost from The Contra Costa Times

        Martinez Environmental Group concerned over crude oil rail transport

        By Dana Guzzetti  |  05/13/2014

        MARTINEZ — Bill Nichols of the Martinez Environmental Group said the city is in “dire peril” because of trains transporting oil through the region.

        “Accidents have risen exponentially,” he said, at the May 7 City Council meeting.

        The Martinez group is part of a larger movement working to stop crude oil rail shipments partly because of the increased number of accidents in recent years. Explosions, fires and spills have occurred, sometimes in populated areas. Nichols cited a July 2013 accident in Canada resulting in 47 deaths.

        Trains have intersected Martinez since 1877 and the tracks are now used by the BNSF (Burlington Northern Santa Fe) and Union Pacific railroads. As well as passenger service, some freight trains contain oil and chemicals.

        Nichols said his concern about lighter Bakken crude is due to the fact that it is highly combustible, and because shale oil production has boomed at the Bakken formation in North Dakota. Heavier Canadian tar sands crude is also increasingly shipped from Alberta, Canada.

        Mayor Rob Schroder noted that the Martinez rail switching yard is not far from his home.

        “Of course we are very concerned. The safety of our residents is the most important part of my job,” he said. “It is not just Bakken oil, other trains carry chemicals.”

        The Bakken crude oil is desirable in the market partly because it does not require as much refining to make gasoline, and is therefore cheaper to produce. While that helps reduce American dependence on Middle East oil, there is little pipeline infrastructure in place and new pipeline construction has been resisted for environmental reasons.

        Oil producers turned to rail because it is environmentally cleaner, safer and more cost effective than trucking to refineries in the Bay Area and elsewhere, but not to Shell Martinez Refinery.

        Tesoro began receiving Bakken crude shipments at the Kinder Morgan terminal in Richmond and trucking them to the refinery near Martinez, according to a Reuters report.

        In March, Valero Energy Corp. revealed plans for a new rail terminal in Benicia to receive Bakken crude shipments, and Phillips 66 has plans for a project in Santa Maria which would facilitate train transport through Martinez to its Rodeo refinery.

        “In 2008, there were 9,500 trainloads (of oil) in the United States,” Nichols said. “In 2013, that number has increased to 413,000.”

        In spite of that volume, Lena L. Kent, BNSF spokeswoman later said, “BNSF experienced the fewest mainline derailments in its history in 2013, and the Federal Railroad Administration says that preliminary data indicates it may have been the safest year for the rail industry as well, following 2012, which had been the safest year in history for both BNSF and the rail industry.”

        At the meeting, Nichols’ lengthy presentation was full of alarming statistics, and he requested the City Council to take a stand against the shipments. He asked the council to appeal to other elected officials, including Gov. Jerry Brown and to do the same.

        Councilman Mark Ross subsequently observed, “It is important to pursue safety in the overall production and transport of oil, but there has to be a reduction in demand. It has only increased because it has become more profitable.”

        Ross serves on the Bay Area Air Quality Management District board, but said it only controls stationary sources.

        “It is up to the railroads and the federal government to make it safe. It is far short of what is needed nationwide,” Ross said. “The demand is going to be met … if they have to carry (crude oil) by buckets. It will have to be met.”

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