Category Archives: Public permitting

Benicia City Council, Crude By Rail, Legal action, Local Regulation, Public permitting, Valero attorney John Flynn, Valero Benicia Refinery, Valero Crude By Rail

Valero attorney claims that Benicia APPROVED Crude by Rail on Sept. 20!!

By Roger Straw, October 3, 2016

Incredible: “The permit is therefore approved by operation of law.”

In yet another bizarre legal maneuver, Valero’s attorney John Flynn sent a letter to the Mayor and members of the City Council on October 3, claiming that by various acts of commission and omission, the City Council on September 20 failed to properly deny Valero’s permit, and that therefore the permit is “approved by operation of law.”

The logic is twisted, but stick with me.

Flynn is claiming that “the City Council’s action of September 20 violated both state and federal law” on a variety of grounds:

  • Timing – Valero claims that a decision with proper findings in support of denial was required by September 20, but the Council sent staff back to revise the findings in the draft resolution of denial.
  • Council members’ statements – Valero claims that Council members were required to verbally state the grounds upon which they voted to deny the project, and that they ONLY stated concerns about rail-related impacts, which Valero continues to claim are preempted from consideration under federal law.  Note here that Valero re-states its failed argument that even ON-SITE rail impacts are preempted.
  • Reliance on a letter received on September 20 – Valero claims that the City may not rely on information in a letter from the law firm Adams Broadwell Joseph & Cardozo in framing its arguments for denial. Poor Valero states that it (and the public) didn’t have a chance to rebut the letter. This from the company which sent two last-minute unrebuttable letters which City staff included in the Council’s agenda packet!
  • Reliance on the Surface Transportation Board letter – Valero claims that Council relied on the STB’s dismissal of Valero’s petition in its decision, and that Valero and the public never had an opportunity to comment on the STB’s decision. Valero demands that the City not refer to anything in the federal agency’s decision when drafting findings for denial.
  • Council’s request for staff to edit its draft resolution of denial – Valero claims that any editing of the draft resolution would amount to “post hoc rationalizations.”  Baloney. It’s done all the time.
  • The letter goes on and on, but I will leave it to the City Attorney and others to flesh out Valero’s twisted bullying tactics.

IMPORTANT: The letter concludes by foreshadowing a lawsuit against the City:

“The transcript of the September 20 hearing will no doubt clearly establish for a Court that the only grounds invoked by the Council for denying Valero’s application were rail-related grounds, and that any other grounds invoked in the written findings proposed by staff and by Adams Broadwell are no more than baseless afterthoughts, in a desperate bid to deny Valero’s permit application, despite the lack of any legal or factual bases for such a denial.”

Benicia City Council, Crude By Rail, Public permitting, Valero Benicia Refinery, Valero Crude By Rail

Benicia City Council to consider findings for FINAL denial of Valero CBR

By Roger Straw, October 4, 2014

benicia_logoBenicia City staff released the AGENDA for the October 4 City Council meeting, including an important staff report, CONFIRMATION OF THE RESOLUTION TO DENY THE USE PERMIT FOR THE VALERO CRUDE BY RAIL PROJECT.

EXECUTIVE SUMMARY:
At the September 20, 2016 City Council meeting, the Council denied the use permit for the Valero Crude By Rail project and requested a revised resolution be brought back for final approval at the October 4th Council meeting. Per the Council’s direction, the proposed resolution incorporates some General Plan policies as well as issues raised by the state Attorney General, the Bay Area Air Quality Management District and Caltrans.

The agenda also included the following important documents:

It will be an important Council meeting tonight. Plan to attend if you can – 7pm in Council Chambers, 250 East L Street, Benicia.

 

Crude By Rail, Local Regulation, Public permitting, Public Safety, Valero Benicia Refinery, Valero Crude By Rail

Benician C. Bart Sullivan sends letter to Cal. Attorney General

By Roger Straw, September 2, 2016
[Editor:  This post originally appeared with an error that has since been corrected.  C. Bart Sullivan is not an attorney.  The error was our own, not that of Mr. Sullivan.  We apologize for our error.  – RS]

Local Benicia engineer C. Bart Sullivan petitions Attorney General Kamala Harris, points out serious flaws in Valero CBR design

On August 9, local Benicia engineer C. Bart Sullivan wrote the following letter asking for help from California Attorney General Kamala Harris.  Sullivan’s comments focus on the lack of adequate safety setbacks and potential catastrophic dangers within Valero’s facility and nearby facilities in the Benicia Industrial Park should the plan be approved.

This approach is highly significant, showing that even if federal law prevents the City of Benicia from denying a permit based on rail impacts (a highly disputed contention), there are nonetheless enough significant and serious flaws in Valero’s onsite engineering designs to allow the City to refuse the permit and deny the project.

Text of Mr. Sullivan’s letter follows.  Mr. Sullivan has allowed the Benicia Independent to reprint this letter with the understanding that it is “his personal opinion, informational only, and is not to be construed as legal advice.”

August 9, 2016

California Attorney General Kamala D. Harris
Office of the Attorney General
1300 “I” Street
Sacramento, CA 95814-2919

RE: Valero – Crude By Rail Project

Dear California Attorney General Harris:

Benicia needs your help. I am deeply concerned about the safety of the Valero Crude by Rail Project and the oral dismissal of your legal advice to the city of Benicia by the city contract attorney, Bradley R. Hogin, Esq.

Based on the fact that Valero is the largest private employer in Benicia, the city staff is in favor of the project, and due to the oral legal advice provided by Mr. Hogin implying the futility of any action by the city, from my perspective, it appears that Benicia City Council will vote to approve the project.

From my personal expertise as an engineer with refinery experience, and based on expert opinions of professional engineers who have reviewed the proposed project design, Valero’s proposed crude-by-rail project design is extremely dangerous. Specifically, the engineering design does not allow for sufficient safety setbacks (the distance between the rail cars and oil storage tanks, etc.) to mitigate the likelihood of a chain reaction explosion within the refinery. Thus, due to the massive explosive potential of each rail car and the close proximity of the rail cars to other explosive fuel sources, it is highly likely that an explosion of only one rail car within the refinery will escalate into larger explosions extending beyond Valero property and into the city of Benicia.

Therefore, because of the lack of safety setbacks and the number of proposed rail cars entering the facility on a daily basis, the likelihood of catastrophic explosions at the refinery in Benicia puts hundreds, if not thousands, of Benicia residents directly in harm’s way. Unfortunately, the city has no way to mitigate this terrible danger, let alone mitigate other safety and health issues such as additional health impacts from the predicted increase in local air pollution.

Valero has categorically asserted that Benicia City Council cannot look to these unmitigable health and safety issues to deny the project due to the law of federal preemption. Based on Valero’s assertion, I wanted to bring comments from Mr. Hogin and Mr. John Flynn, Esq., Valero’s attorney, to your attention.1

In his testimony to the Benicia City Council, Mr. Hogin,  advised that the city had no recourse under federal preemption to deny the project, summarily dismissed your letter of April 14, 2016, and did not provide the city with any legal advice on how to challenge the project under Constitutional law. For example, Mr. Hogin did not provide any legal advice concerning how the proposed project could be challenged under the 10th Amendment or the Dormant Commerce Clause (DCC) using the rational basis test for the legitimate noneconomic purpose of protecting the health and safety of Benicia residents.

For your convenience, the following are recorded oral statements by Mr. Hogin and Mr. Flynn. I am deeply troubled by these statements, which I consider to be biased legal advice given to the Benicia city council April 18, 2016.

During the Benicia City Council meeting, Monday April 18, 2016, Mr. Hogin stated:

“The Attorney General letter really missed the point. The issue here is whether a City can regulate rail impacts indirectly by imposing requirements on a shipper that address rail impacts, as opposed to impacts from the shipper’s facility, and the Attorney General opinion really doesn’t discuss that.

The Attorney General opinion only discusses cases where cities were addressing impacts from a transloading facility that was owned and operated by a private party.

In none of the cases where — that the Attorney General cites were any of the cities addressing rail impacts…”

Moreover, during the same Benicia City Council meeting, Mr. Flynn stated:

“As for the AG’s letter, I’m going to choose my words very carefully because I have a lot of respect for Kamala Harris and I have a lot of respect for her office, but that letter on the issue of preemption is dead wrong. Your attorney — the advice that you’ve been given by your attorney is exactly right. If you follow the advice that’s been given to you by Kamala Harris, you’ll be making a terrible mistake, a terrible legal error.

Somebody has suggested that Valero, because it’s a — it’s a refinery, doesn’t have any standing to ask for a Declaratory Order from the — from the Surface Transportation Board. That, also, is dead wrong.

You don’t have to be a railroad to get a Declaratory Order from the Surface Transportation Board, and that’s been proven on many occasions as a result of the fact that the Surface Transportation Board has, in fact, issued a number of declaratory orders as the result of requests made by nonrail carriers.

Valero is a shipper. A “shipper” is a term of art under federal law. So we do have standing to request that Declaratory Order.” (Emphasis added)

Even though Mr. Hogin briefly mentioned later in his discourse that the city could look to non-rail related impacts to deny the project, the above quoted transcript of the oral arguments do not reflect the serious and biased tone of the legal advice as orally presented to the Benicia City Council. Specifically, the oral presentation by Mr. Hogin implied that any legal recourse would be futile, and that the city of Benicia has no other option but to approve the project.

While the legal advice from both attorneys concerns me greatly, Mr. Hogin’s legal advice seems especially biased toward Valero’s position, and does not seem to be in the best interest of his client, the city of Benicia.

Thus, Mr. Hogin provided legal advice in a manner strongly advocating Valero’s position without formulating a defensible and well thought out argument for the case opposing Valero’s position for the city to consider.

Based on the above, I emphatically urge you and your staff to personally visit the city of Benicia to reiterate your position. I implore you to please help the city of Benicia realize that they have the power to protect their citizens, and without taking your advice they would be making a terrible legal error and would be breaching their duty to the people of Benicia and beyond.

Sincerely,

C. Bart Sullivan, E.E, J.D.

1 REPORTER’S TRANSCRIPT OF RECORDED PROCEEDINGS IN RE VALERO CRUDE BY RAIL PROJECT HEARING AND PUBLIC COMMENTS (http://www.ci.benicia.ca.us/vertical/sites/%7BF991A639-AAED-4E1A-9735-86EA195E2C8D%7D/uploads/City_Council_April_18_2016_Transcript.pdf)
Crude By Rail, Phillips 66 Nipomo Mesa refinery, Public permitting, San Luis Obispo County, Santa Maria Refinery, Truck transport

Phillips 66 oil-by-rail project may be in jeopardy – deadline Aug 15

Repost from The Tribune, San Luis Obispo

Phillips 66 oil-by-rail project may be in jeopardy

By David Sneed, July 22, 2016 8:06pm

HIGHLIGHTS
• Oil company faces Aug. 15 deadline to pay $240,000 in fees and supply information or SLO County will withdraw the application
• County also is critical of Phillips 66’s recent decision to begin trucking crude oil to the Nipomo Mesa refinery
• It is unclear whether a Sept. 22 Planning Commission hearing on the rail project will take place

The Phillips 66 refinery on the Nipomo Mesa has been trucking in oil since February as it continues to pursue a plan to accept oil by rail.
The Phillips 66 refinery on the Nipomo Mesa has been trucking in oil since February as it continues to pursue a plan to accept oil by rail. Joe Johnston Tribune

A controversial proposal by the Phillips 66 oil company to bring crude oil by rail to its Nipomo Mesa refinery is at a crossroads.

The oil company has been given an Aug. 15 deadline to give the San Luis Obispo County department of planning and building additional information about the project — the company wants to install a rail spur connecting the refinery with the main line — and to pay more than $240,000 in fees or the project application will be withdrawn.

In a July 8 letter to the company, county supervising planner Ryan Hostetter wrote, “This letter serves to inform Phillips 66 that without the necessary information and funding, the county cannot complete processing the application as directed by the Planning Commission.”

As of July 22, the county had received only part of the information it has requested and none of the money, Hostetter said.

Phillips 66’s proposal to build the spur so it can bring in three trains per week, each carrying 2.2 million gallons of crude oil, has faced a storm of opposition. Communities on the rail line across California have weighed in, many saying they feared a disastrous derailment.

Phillips 66 did not respond directly to questions by The Tribune on Friday as to whether the company plans to meet the county’s Aug. 15 deadline to pay the fees and provide the missing information. Instead, it sent this statement:

“Phillips 66 presented a strong proposal, and we remain confident about the project,” the statement said. “We understand and respect the review and approval process with the county, and look forward to the next step in the EIR process.”

The county has also informed Phillips 66 that its recent decision to truck oil directly into the refinery is likely a violation of the county’s permit and will require a new permit as well as a trucking plan detailing the new oil-by-truck method. The refinery has been receiving crude oil by pipeline. The county found out about the trucking during an April 15 Planning Commission hearing on the rail spur project.

“Bringing in crude by truck is a modification of the refinery and, additionally, may have the potential to cause significant impacts,” Hostetter said in a June 30 letter to Phillips 66.

The refinery’s maintenance supervisor, James Anderson, responded to the county in a letter dated July 14 in which he denied the assertions that the trucking of oil is a modification of the refinery and disputes the notion that a trucking plan is required. The letter refers to the refinery’s official name, the Santa Maria Refinery.

“Phillips 66 does not need any new permits or modifications to its existing permits to deliver feedstocks by truck to SMR (Santa Maria Refinery) in the manner in which it is currently performed,” Anderson’s letter stated. “Such activity has been a long-standing practice, albeit intermittent, and is not part of the rail extension project.”

Hostetter said the July 14 letter answered some but not all of the county’s questions. No deadline was given for providing the information.

“They are not sitting on it, but we need more information to make a formal call on whether trucking is an allowed use or if they need a new permit,” Hostetter said.

Anderson’s letter went on to give some details about the refinery’s recent oil-by-truck activities:

▪ It began in February.
▪ The number of truck trips per day has ranged from 1 to 25.
▪ Trucks generally hold up to 150 barrels of oil. A barrel contains 42 gallons.
▪ The oil is delivered into an existing pipeline via a flexible hose.
▪ The oil generally originates within California.

Phillips 66 has proposed installing a 1.3-mile rail spur connecting to the main line as a way to expand its sources of crude oil and continue to support the 200 employees who work at the Nipomo refinery. The proposal calls for deliveries from three trains per week; each train would have three locomotives and 80 rail cars to haul 2.2 million gallons of crude oil.

Earlier this year, the county Planning Commission held five full days of hearings that drew thousands of people from around California. The commission has scheduled a hearing for Sept. 22, at which a final decision could be made.

At its most recent hearing, the commission asked for a variety of additional information from Phillips 66, such as how many trains per year would arrive at the refinery under the three-trains-per-week scenario, how many trains could arrive in one day and what impact that would have on air quality around the refinery.

Few of those questions have been answered. Whether the commission even has a Sept. 22 hearing and whether it will be able to make a final decision if a hearing is held, depends on how much additional funding and information Phillips 66 provides, Hostetter said. For example, the company has proposed only funding the project through the Planning Commission phase but not through the likely appeal to the Board of Supervisors.

County policy requires that development applicants pay all the county’s costs in processing their permit, including the cost to hire consultants and write an environmental impact report. The county has estimated the cost of processing the application through the Board of Supervisors appeal hearing to be $240,697.73.

If the county withdraws the application, Phillips 66 could reapply at a later date.