Top 10 Stories of 2016: Benicia derails Valero’s oil-transport plan
By Daily Republic staff From page A1 | January 01, 2017
BENICIA — City Hall reverberated from the cheers when the City Council in September voted unanimously to turn down a Valero plan that would have allowed up to 70,000 barrels of crude oil to be shipped by rail to its refinery.
It is a topic that also made the Daily Republic’s top stories list in 2015.
Valero receives its crude oil by ship, and wanted to employ the less expensive rail option.
What ultimately became a simple land-use decision for the council, turned Benicia into one of the latest battlegrounds on the environmental and urban safety debate over transporting crude oil by rail.
Proponents noted the advances in railcar safety and emergency service preparedness, while opponents pointed to all the disasters – many deadly – that have occurred, some during the local debate.
Valero had applied for a permit to add additional rail, pipeline and to make other changes to its off-loading capabilities at the refinery, a request denied by the city Planning Commission in February. A series of public hearings were held before the City Council, but a decision was delayed while Valero took its case to the federal Surface Transportation Board, arguing the city lacked authority to make the decision.
The agency, just hours prior to the council’s decision, ruled that the city was not addressing a transportation issue, which would have triggered the long-held rail pre-emption laws, but rather was addressing the permit application only.
Valero, which represents about 25 percent of all local city tax revenue, has not indicated what its next move might be.
On December 20, Benicia’s City Attorney announced that she had been advised by Valero’s attorney that the refinery is no longer planning to sue the City of Benicia over its failed Crude By Rail proposal.
While this is welcome news, worthy of celebration and thanksgiving, Valero’s decision surely was more nuanced than the simple reason given, that it wants to maintain good relations with the City.
Everyone in the city is happy about that – we all want good relations, and no one wanted the issue to drag on in the courts, at great expense in time and money.
But it must be noted that a Benicia lawsuit by Valero would have failed, on multiple grounds. Valero’s best legal advice must have been to quit, or risk additional losses. That advice would’ve been resisted if at all possible, not only for local refinery interests, but on behalf of the wider oil and rail industries.
Valero Benicia was a potential precedent-setting case, with implications for major corporate financial holdings all across the US and Canada. There must have been immense pressure on Valero to sue. The industries needed to win a case claiming that federal preemption laws are enough to overrule local land use regulatory authority.
But with immense activist opposition setting the pace; with California’s Attorney General weighing in and a dozen environmental attorneys, engineers and environmental analysts offering significant commentary during the review process; and with the Federal Surface Transportation Board denying Valero’s last-ditch petition, a lawsuit had little chance of success.
Valero lost that argument here, but no one should rest easy. The oil and rail industries will surely look for another situation where they can more successfully press their unlimited right to endanger health and welfare under federal preemption laws.
The growing movement against oil trains needs to remain active and alert.
Federal action seen as boost to local, state control over projects
By Brian Nearing, Thursday, September 29, 2016 10:03 pm
ALBANY > A federal ruling on a oil-by-rail facility in California could hand state and local officials in New York and across the country a powerful legal tool to oversee the projects, which have been controlled primarily by federal rules.
The federal Surface Transportation Board this month sided with officials in Benicia, a small city near San Francisco, in a dispute with an oil refining company over a proposed storage terminal for crude oil brought in by tanker trains. The Valero Refining Company had argued it was exempt from a city denial because it was functioning as a rail carrier, and governed by federal transportation rules — a legal concept called “preemption” — but the federal board rejected the claim.
“Valero is not a rail carrier, nor is it acting under the auspices of a rail carrier,” according to the federal decision. Critics of oil train traffic directed in recent years to two oil terminals at the Port of Albany hailed the ruling as a victory for more state and local control.
“This puts the state Department of Environmental Conservation in a very strong position to require the oil terminals to explain the full impacts of their operations,” said Chris Amato, an attorney for the not-for-profit environmental group Earthjustice.
This month, the DEC announced it was requiring one terminal operator, Global Partners, to answer additional environmental questions on its request to construct a crude oil heating terminal that could be used to process Canadian tar sands oil.
“Nothing in the opinion suggests that DEC’s current course of action with respect the Port of Albany should be altered,” a DEC statement said.
Critics of earlier DEC environmental approvals for the Global and Buckeye oil terminals have been urging the state to rescind its approvals, but the state had responded that such authority rested with the federal government, not the state.