Category Archives: Refinery shutdowns

Valero Says It Faces $342,000 in Penalties Over Benicia Refinery Pollution Incident

By Ted Goldberg, May 14, 2019
KQED NEWS – California Report
The Valero refinery in Benicia. (Craig Miller/KQED)

Valero says it’s facing $342,000 or more in fines from county and regional agencies after a major air pollution incident earlier this year at its Benicia refinery.

In a filing last week with the federal Securities and Exchange Commission, the company says it expects to face $242,840 in proposed penalties from the Solano County Department of Resource Management and at least another $100,000 in fines to settle a dozen notices of violation from the Bay Area Air Quality Management District.

The reported penalty amount is about 1/100th of 1% of the San Antonio, Texas-based company’s reported adjusted net profit for 2018 — $3.2 billion.

“While it is not possible to predict the outcome of the following environmental proceedings, if any one or more of them were decided against us, we believe that there would be no material effect on our financial position, results of operators, or liquidity,” the company said in its filing.

The SEC document also reported a much larger penalty, $1.3 million, that Valero believes it faces in connection with an incident in the Texas city of Corpus Christi, where contaminated backflow from a company asphalt plant contaminated the area’s water supply for several days.

A local environmentalist who has followed the Benicia refinery’s recent problems said the penalties barely amount to a drop in the bucket.

“These fines don’t mean much to a giant oil company worth tens of billions of dollars,” said Hollin Kretzmann, an Oakland-based lawyer for the Center for Biological Diversity.

“It’s likely only a matter of time before we see another incident, so the communities near these dangerous refineries deserve better protection from toxic air pollution,” Kretzmann said.

Lillian Riojas, a Valero spokeswoman, said the company would not comment beyond its public filing.

Ralph Borrmann, a spokesman for the BAAQMD, emphasized that the Valero fines were not settled yet.

The district tends to spend several years negotiating settlements with local refineries, bringing together a handful of violations into a package long after they are the subject of media coverage.

For instance, the district announced in March that Shell had agreed to pay $165,000 to settle violations at its Martinez refinery that took place in 2015 and 2016.

Solano County’s investigation into Valero’s most recent incident is ongoing, according to Terry Schmidtbauer, the county’s assistant director of resource management, who emphasized that the agency has yet to produce or negotiate any final violations in connection with Valero’s March releases.

But Schmidtbauer said it was typical for his department to discuss tentative findings and potential penalties with companies it’s investigating, talks he said would be preliminary.

Two refinery components — a processing unit called a fluid coker, which heats up and “cracks” the thickest and heaviest components of crude oil, and a flue gas scrubber, which is supposed to remove fine particles before they’re released from the facility’s smokestacks — are under scrutiny in Solano County’s probe.

They began malfunctioning on March 11, resulting in the release of sooty smoke from the refinery. The releases intensified two weeks later when the facility belched out a large amount of black soot, leading to elevated levels of particulate matter.

The smoke prompted county officials to issue a health advisory for those with respiratory problems. Refinery managers shut down the facility.

Valero’s SEC filing came as the Benicia refinery began a gradual process of restarting after being off line for more than 40 days.

The resumption of operations at the facility coincided with a slow and very small drop in gas prices, after two months of increases. On March 24, the day Valero shutdown, the average cost of a gallon of unleaded gasoline in California was $3.49, according to AAA.

On May 7, as the Benicia refinery gradually got back on-line, the the average price was $4.10. On Tuesday, it had dipped slightly to $4.07

Energy experts have said Valero’s shutdown coupled with other refinery problems in California and the high cost of crude oil globally led to the state’s recent gas price hikes, which are currently the subject of a state Energy Commission investigation.

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    KQED: Valero Benicia one of three Cal oil refineries shut down – gas prices up, Chevron flaring

    Repost from KQED California Report

    Valero Could Restart Troubled Benicia Refinery by Mid-May

    By Ted Goldberg, Apr 15, 2019
    The Valero refinery in Benicia. (Craig Miller/KQED)

    Valero’s Benicia refinery, shut down since last month because of equipment malfunctions, could be back online by mid-May, Benicia city officials and state regulators say.

    Although the company won’t provide a date that it plans to restart the Solano County facility, Benicia Fire Chief Josh Chadwick said Monday he estimates the refinery will be back online in the next three to four weeks.

    Chadwick said a Solano County hazardous materials specialist assigned to Valero provided him with the estimated timetable. County officials did make the specialist available for comment.

    The California Energy Commission said Monday that the Benicia refinery is one of three California crude oil processing facilities that the agency expects to be restarted over the next several weeks. Shutdowns at the refineries — including two in the Los Angeles area — have helped drive up the cost of gasoline statewide.

    Valero powered down its Benicia facility on March 24 after failing to resolve malfunctions that led to the release of soot-laden smoke.

    The incident prompted Solano County to issue a health advisory for people with respiratory issues to stay indoors.

    A Valero representative said the company will not disclose its restart date.

    “I know we shared information about the status of the refinery on March 24, but beyond that, it is Valero’s policy to not comment on operations or possible outages/restarts at its facilities beyond what is publicly reported,” said Lillian Riojas, a company spokeswoman.

    The California Energy Commission has been in touch with Valero but does not release certain data about its operations due to regulatory restrictions, according to agency spokeswoman Sandy Louey.

    But Louey said refinery issues that have played a part in recent gas price increases — including the Valero shutdown — would be coming to an end in the coming weeks.

    “The Energy Commission can say that the three large refinery maintenance issues are scheduled to be resolved over a period beginning late April through the middle of May,” she said in an email.

    Besides Valero, the facilities involve two in the Los Angeles suburb of Carson: a Phillips 66 refinery that suffered a fire and a Marathon Oil refinery that’s been down for planned maintenance.

    The statewide average cost of a gallon of regular has increased 62 cents since Valero’s March 24 shutdown, according to AAA. It now stands at $4.006.

    “We’ve had major refinery issues all spring,” said AAA Northern California spokesman Michael Blasky.  “I’ve heard it referred to as a perfect storm in the industry, with a lot of refinery incidents of flaring or shutting down for days or weeks at time.”

    In fact, Chevron’s Richmond refinery experienced its seventh flaring incident of the year on Saturday, according to Contra Costa County’s chief environmental and hazardous materials officer, Randy Sawyer.  The incident caught the attention of the Oil Price Information Service.

    Monday’s price marks the first time the statewide average cost for a gallon of regular has topped $4 in close to five years, Blasky said.

    He said that while other factors have played a part in the rise — for instance, an increase in the price of crude oil worldwide — the refinery issues have been a major contributing factor.

    “I would hope, as refineries come back to their normal levels of production, that we start to see prices level out and hopefully start to come down by mid-May,” Blasky said.

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      Valero will not be back online until early to mid May

      April 14, 2019

      Valero Benicia Refinery emissions Mar23 2.21pm

      The Benicia Independent learned yesterday that Valero Benicia Refinery will remain in “partial shutdown” until early or mid-May.

      This news raises two concerns:

      1. The shutdown came after the refinery experienced a massive release of black smoke on March 11 containing particles of petroleum coke and other toxic chemicals including benzene.  On March 24, a repeat of the black smoke releases took place, a shelter in place was issued by the health department, and the refinery went into a partial shutdown.  One might ask, “What kind of malfunction could result in a two-month shutdown?  How serious of an incident was this?”
      2. The partial shutdown has already raised gas prices in California.  How will another month offline affect consumers’ gas prices?

      Roger Straw
      The Benicia Independent

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