Category Archives: Tar sands crude

Until California curbs its oil refineries, it won’t meet its climate goals (Benicia & others are heroes)

Repost from the Los Angeles Times
[Editor: Significant quote, Benicia in final paragraph – “In the absence of action at the state level, it has fallen to localities to prevent refineries from at least increasing crude oil imports to their facilities. Over the last decade elected officials in half-a-dozen communities from Benicia to San Luis Obispo County have blocked refinery infrastructure projects that would allow more crude oil imports. They’re the real heroes of California’s climate saga — too bad they won’t be the ones in the spotlight at the summit.”  – RS]

Until California curbs its oil refineries, it won’t meet its climate goals

By Jacques Leslie, Sep 11, 2018 | 4:15 AM
Until California curbs its oil refineries, it won't meet its climate goals
The Phillips 66 refinery in the Wilmington neighborhood of Los Angeles. (Rick Loomis / Los Angeles Times)

While Gov. Jerry Brown and other California leaders bask under an international spotlight at this week’s Global Climate Action Summit in San Francisco, there is one highly relevant topic they’re not likely to bring up: oil refineries.

That’s because refineries are crucially absent from California’s climate change strategy. The state has justifiably gotten credit for addressing climate change issues that the nation won’t — promoting renewable energy, cap-and-trade greenhouse gas emission limits, and electric vehicles — but it has backed off from challenging refineries, the centerpieces of California’s oil supply infrastructure.

Concentrated in Los Angeles’ South Bay and the San Francisco Bay Area, the state’s 17 refineries comprise the largest oil processing center in western North America. Unless emissions from those refineries are curbed, the state has no chance of meeting its long-range climate change goals.

Greg Karras, a senior scientist at Huntington Park-based Communities for a Better Environment, calculates that without restraints on refineries, even if emission reductions from all other sources hit their targets, oil sector pollution through 2050 would cause the state to exceed its overall climate goals by roughly 40%.

“Refineries have been largely exempted from the state’s cap and trade program, which charges fees for emissions.”

That’s primarily because refineries have been largely exempted from the state’s cap and trade program, which charges fees for emissions. Last year, the legislature extended the program for another decade, from 2020 to 2030, but only after bowing to the oil industry’s wishes. To win a needed two-thirds majority, cap and trade supporters exempted the industry from fees for all but a tenth of refinery emissions through 2030. The legislation also prohibited regional air districts from imposing their own limits on refinery carbon dioxide emissions, a severe blow to communities suffering from pollution from nearby operations. Instead of curbing refineries, these provisions gave them a decade-long free pass.

To make matters worse, the oil that is being processed is bound to get dirtier, resulting in a higher rate of greenhouse gas emissions throughout the fuel-production chain. Oil used by the state’s refineries already contains the highest intensity of greenhouse gas pollutants of any refining region in the country. As drillers pump the dregs from the state’s nearly spent fields, that intensity is increasing.

With California oil extraction in decline, its refineries will want to import more crude oil from other states and nations. That could include tapping the Canadian tar sands, notorious for its off-the-charts, climate-busting pollutants. Completion of the stalled Trans Mountain pipeline expansion in Canada would facilitate what Greenpeace calls a “tanker superhighway” from Vancouver to California ports. California refineries have tried to win approval for rail terminals and ports that would receive tar sands oil but have so far been blocked by local governments.

The refineries’ contributions to greenhouse gas emissions don’t end with their own production, of course. When the fuel they produce is used, it’s one of the primary contributors to climate change. As California shifts to renewable energy and electric vehicles, less refined fuel will be consumed here and more will be exported to other states and nations.

As a result, the state could become, in Karras’ words, “the gas station of the Pacific Rim.” And as exports grow to countries like India with lax environmental standards, refineries won’t even need to meet California’s more stringent regulations on fuel composition; instead, they will export more pollution.

The main reason state leaders have done little to limit oil supply is obvious: The oil industry remains a formidable adversary, wielding its financial and lobbying might to head off restraints. For virtually all Republican state legislators and a substantial number of Democrats, oil supply is too hot a topic to touch, Karras told me.

Meanwhile, state policy calls for greenhouse gas emissions to drop by 80% of 1990 levels by 2050. Given the oil industry’s cap and trade refinery exemptions in place through 2030, the only way to achieve that level is to place drastic limits on refineries as soon as those exemptions expire, which is unlikely to happen. A more realistic approach would remove the oil industry’s exemptions and impose cuts of 5% a year on refinery emissions immediately — an urgent task that state leaders have shown no interest in carrying out.

In the absence of action at the state level, it has fallen to localities to prevent refineries from at least increasing crude oil imports to their facilities. Over the last decade elected officials in half-a-dozen communities from Benicia to San Luis Obispo County have blocked refinery infrastructure projects that would allow more crude oil imports. They’re the real heroes of California’s climate saga — too bad they won’t be the ones in the spotlight at the summit.

Jacques Leslie is contributing writer to Opinion.

    Canadian railways sign deal for more tar-sands crude by rail

    Repost from Reuters
    [Quote: “Increased crude shipping by rail…would represent progress in moving more Canadian oil to U.S. refineries.” ]

    Cenovus inks deal to move more crude on Canadian National Railway -source

    by Julie Gordon, Rod Nickel, September 7, 2018 / 11:18 AM

    VANCOUVER/WINNIPEG (Reuters) – Cenovus Energy Inc (CVE.TO), a major Canadian oil producer, has signed a deal to move more crude with the Canadian National Railway Co (CNR.TO), a source with direct knowledge of the matter told Reuters.

    Rail cars including crude tankers are seen at the Canadian Nationals (CN) Thornton Railroad Yards in Surrey, British Columbia, Canada, June 21, 2012. REUTERS/Andy Clark/File Photo

    The deal is one of many being quietly signed that, along with the expedited deliveries of new locomotives, will help boost Canada’s crude-by-rail shipments 50 percent by year end, a government consultant told Reuters separately.

    The source said the Cenovus-CN deal was inked days before a Canadian court last week overturned the approval of the Trans Mountain oil pipeline expansion.

    Shipper commitments put CN and smaller rival Canadian Pacific Railway Ltd (CP.TO) in position to collectively move more than 300,000 barrels per day by December, said Greg Stringham, a consultant who mediated talks among oil producers and railways for the Alberta government this year.

    Stringham did not directly address the Cenovus deal, but said new crude-by-rail “contracts are being signed. Not all of those been disclosed yet, but it is continuing.”

    Oil train cars are stopped in their tracks as smoke from a fire rises at the Port Metro Vancouver, British Columbia, Canada, March 4, 2015. REUTERS/Ben Nelms/File Photo

    The railways, burned a few years ago when booming demand for crude-by-rail vanished as oil prices fell and pipeline space opened, are now seeking rich multi-year, take-or-pay deals from producers.The 300,000 bpd would be 50 percent higher than June’s record 200,000 bpd and double 150,000 bpd achieved in December 2017. It is expected to further increase in 2019 as locomotive orders start to catch up with demand.

    The two railways and Cenovus declined to comment. The source declined to be identified as the deal is not public.

    Cenovus CEO Alex Pourbaix said in July that he was considering a multi-year commitment to move 50,000 to 60,000 bpd by rail.

    Cenovus shares rebounded to trade up as much as 0.86 percent soon after the news. Earlier in the day, they had fallen 6.4 percent after Goldman Sachs downgraded the stock to sell.

    CN shares were down 0.5 percent.

    SAFETY CONCERNS

    Increased crude shipping by rail, while still far short of Western Canada’s rail-loading capacity of nearly 1 million bpd, would represent progress in moving more Canadian oil to U.S. refineries. It remains a tiny fraction of the total 3.3 million bpd on average exported, mostly to the U.S., in 2017.

    But as crude shipments increase, so do safety concerns. In 2013, a runaway train carrying crude exploded in the Quebec town of Lac Megantic killing 47 people. In June, some 230,000 gallons of crude spilled into an Iowa river after a train derailed.

    The head of Canada’s transportation regulator said last month that stronger tank cars for transporting flammable liquids should be required sooner than a 2025 deadline.

    Enbridge Inc’s (ENB.TO) oversubscribed Mainline pipeline rations space each month as oil producers expand production, driving a bigger discount in Western Canada’s heavy crude compared to the North American benchmark CLc1.

    The increased crude by rail volumes could not happen without new locomotives that the railways are placing into service faster than before.

    “Probably the biggest constraint that was identified was the lack of locomotives being available,” said Stringham, adding that the railways went to their suppliers and were able to cut delivery times from 24 months down to nine to 12 months. CN said on Wednesday that it had ordered an extra 60 locomotives from General Electric Co (GE.N), adding to a previous deal for 200 locomotives over three years. The original order will now be completed in two years, and the additional 60 are due in 2020, CN spokesman Patrick Waldron said. Those locomotives will be used for energy transport, along with intermodal, coal and agricultural products. Western Canada’s crude inventories reached 36.3 million barrels for the week ending Aug. 31, a record level since Genscape began monitoring in 2010 as oil production expands faster than transport capacity, analyst Dylan White said.

    Reporting by Julie Gordon in Vancouver, Rod Nickel in Winnipeg; additional reporting by Allison Lampert in Montreal; Editing by Denny Thomas and David Gregorio

      If California is so climate friendly, why are Bay Area air regulators allowing increased tar sands oil refining (and offshore drilling)?

      Repost from Red Green and Blue

      If California is so climate friendly, why are they upping tar sands oil refining (and offshore drilling)?

      By Dan Bacher, September 4, 2018

      As thousands get ready to march in the Rise for Climate Day of Action in San Francisco September 8 and the city gears up to host the Governor Jerry Brown co-sponsored Global Climate Action Summit next week, area climate and environmental justice advocates say local air regulators mandated to protect air quality and the climate are taking significant steps to allow increased tar sands refining and creeping refinery emissions in the Bay Area.

      No Fossil Fuels for California
      (Photo by Peg Hunter)

      Major public protest is expected tomorrow, September 5,  at the Bay Area Air Quality Management District (BAAQMD) Board of Directors meeting at 9:30 a.m. at the agency’s headquarters at 375 Beal St., San Francisco.

      The event will preceded at 8 a.m. by an Idle No More SF Bay-led prayer circle and teach-in outside BAAQMD headquarters, according to a press release from the Communities for a Better Environment, 350 Bay Area and the Sunflower Alliance.

      The local climate and environmental justice advocates say they plan to “sound the alarm about the widening gap between lofty California climate goals and the reality on the ground here in the Bay Area and other refining centers in the state.”

      A recent public records request reveals that BAAQMD staff issued an administrative permit on August 16, 2018 to increase production capacity at the Phillips 66 refinery by 61.3 million gallons per year.

      “This permit allows for increased heavy oil processing, or hydrocracking, at the Rodeo facility, and will enable the refiner to process the increased amounts of Canadian tar sands oil it proposes to bring in across San Francisco Bay via nearly tripled oil tanker traffic in a wharf expansion project,” the groups said. “ This small but highly significant step actually allows Phillips 66 to begin implementing its goal of switching its San Francisco Refinery over to tar sands.”

      “The Rodeo refinery is connected to its sister refinery in Santa Maria by pipeline; together they make up the larger San Francisco Refinery.  Two years ago, multi-community protest shut down a Phillips 66 proposal to increase tar sands deliveries by oil train to the Santa Maria facility,” the groups said.

      “The company is trying to sneak its expansion past regulators and the public by pretending each little increase is unconnected, but we aren’t fooled,” said Sejal Choksi-Chugh, Executive Director of San Francisco Baykeeper regarding the permit:

      The groups said the permit was issued without any public review or notice while Chief Air Pollution Control Officer Jack Broadbent was meeting with First Nations representatives and touring tar sands mining sites in Alberta, Canada.

      “The fact-finding tour, which included several BAAQMD board members, took place at the urgent request of members of Idle No More SF Bay, who urged local regulators to connect the dots between the destructive impacts of Canadian tar sands mining on carbon-sequestering boreal forest and First Nations peoples, soaring greenhouse gas emissions and local Bay Area air quality and public health,” they said.

      Pennie Opal Plant of Idle No More SF Bay said, “It is wildly irresponsible for Phillips 66 to add to the problems that are causing sick refinery communities and the climate disruption impacting us in California and around the world.  Phillips’ expansion proposal must be stopped and the Bay Area Air Quality Management District is the agency to stop it.”

      Jed Holtzman of 350 Bay Area stated: “BAAQMD has committed to a vision of a fossil-free Bay Area in 2050, starting now with steep reductions of the pollution that causes premature death in our communities and destroys the stable climate.  Yet its action to allow Phillips 66 to expand its refinery infrastructure ensures more local air pollution and more greenhouse gas emissions. Air District permits must be aligned with agency goals.”

      Area climate and environmental justice advocates said news of the secret permit was distressing to many of them.

      “This type of rubber-stamping of refinery permits demonstrates how BAAQMD serves at the pleasure of the fossil fuel industry, not the citizens who live in the Bay Area,” said refinery neighbor Nancy Rieser of C.R.U.D.E., Crockett-Rodeo United in Defense of the Environment.

      Ironically, the permit was issued nearly five years to the day after the Air District board passed a resolution condemning the KXL pipeline, noted Rieser.

      That resolution warned against the more intensive processing required by tar sands oil, which causes enormous quantities of toxic, criteria and greenhouse gas pollutants to spew from refinery smokestacks.  As the 2013 resolution made clear, “any increase” of these pollutants will cause negative impacts on the health of local residents.

      ”Tar sands bitumen is the most carbon-intensive, hazardous and polluting major oil resource on the planet to extract, transport, and refine. Despite this, the Air District staff is intentionally bypassing California Environmental Quality Act (CEQA) review and refusing to evaluate the climate impacts of its permit, which opens the gates to increased tar sands refining,” the groups said.

      “Staff argues that it must bypass CEQA, one of California’s greatest environmental protections, because the revised cap-and-trade program (AB 398) that Governor Brown so aggressively pushed for last summer has withdrawn the authority of all regional Air Districts to directly regulate refinery-emitted greenhouse gases.   California’s carbon pollution-trading program is now BAAQMD’s chief alibi for eliminating public and board review, and for refusing to protect the climate from oil pollution,” the groups said.

      Activists said they are also alarmed by the “gutting and indefinite postponement of a long-awaited particular-matter reduction regulation impacting the Chevron, Marathon (formerly Tesoro) and Shell refineries.”

      A letter submitted to the Air District by 25 environmental justice organizations on August 16 points to yet another “secret agreement”—this one signed with the oil industry by the District’s Chief Air Pollution Control Officer. The agreement commits the Air District to propose and advocate for weakened emissions limits.

      ”As the Global Climate Action Summit rapidly approaches, our air quality regulators and designated climate protectors need to stop coddling the oil industry and start demonstrating real accountability to the public. People’s lives depend on it,” the groups concluded.

      Read the Demand Letter to BAAQMD for Refinery PM Clean-Up at www.CBECAL.org.

      While California is often lauded as a “climate leader” and Governor Jerry Brown is praised as a “climate hero” in national and international idea, the reality is much different, as we can see in the  widening gap between lofty California climate goals and the reality on the ground in the Bay Area and other refining centers in the state.

      The reality is that Big Oil is the largest and most powerful lobby and the Western States Petroleum Association (WSPA) is the largest and most powerful lobbying organization. As a result of the enormous political influence of WSPA and the oil industry on the Brown administration and the Legislature, Governor Brown’s oil and gas regulators have approved over 21,000 new oil and gas permits in the past seven years — and Brown controls 4 times the number of offshore wells that Donald Trump does.

      WSPA and Big Oil wield their power in 6 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups: (5) working in collaboration with media; and (6) contributing to non profit organizations.

      This article on Big Oil Regulatory Capture is a must-read for everybody going to the BAAQMD meeting tomorrow, the Rise for Climate March on September 8, and the many other climate events planned for the coming week: Before the Rise for Climate March Sept. 8, read this: Big oil’s grip on California.