Category Archives: Valero Benicia Refinery

Solano County Says Valero Benicia Refinery Violated State Regulations in March Shutdown

Valero Benicia Refinery facing stiff fines

KQED California Report, by Ted Goldberg, September 5, 2019
The Valero refinery in Benicia. (Craig Miller/KQED)

Solano County inspectors documented a long list of shortcomings and inadequate procedures at Valero’s Benicia oil refinery that contributed to a major pollution release from the facility earlier this year, newly released county documents show.

The county’s Department of Resource Management documented violations of eight separate state regulations. The infractions included failure to fix important sensors in a refinery furnace unit, infrequent inspections of key equipment, and failure to have an operating plan in place to deal with unexpected refinery conditions.

Solano’s probe relied in part on Valero’s root cause analysis of the shutdown, which found that one of the worst refinery incidents in the Bay Area in years was caused by a mistake made months earlier.

Both reports focused on tubes in the refinery’s furnace that heat up crude oil before it’s routed to other parts of the facility for processing. County and refinery officials say those furnace tubes were damaged during maintenance work last November, which caused the devices to fail and contributed to the plant’s malfunctions in March.

The Valero complex ended up belching out a massive amount of black sooty smoke, which led to health concerns for people living nearby.

The refinery’s subsequent closure contributed to a statewide spike in gasoline prices and prompted investigations by several government agencies, renewing attention on the refinery two years after a power outage caused a major release of toxic sulfur dioxide in the area.

Valero spokeswoman Lillian Riojas declined to comment directly on the company’s violations. Instead, she pointed to the company’s May filing with the Securities and Exchange Commission in which it reported it’s facing more than $342,000 in fines in connection with the incident. The company told the SEC it expects to face $242,840 in proposed penalties from Solano County and $100,000 from the Bay Area Air Quality Management District.

Valero’s root cause analysis, completed in July, examines a series of problems that led to the refinery malfunctions.

Company inspections during the refinery shutdown found that furnace tubes were bulging and leaking. Valero says when the facility was restarting a unit last November, a safety valve improperly “lifted,” allowing crude oil to bypass one of the refinery’s furnaces.

Valero says “it was not appreciated at the time” that allowing the bypass “exposed the furnace tubes to elevated temperatures.” Extreme heat gradually deformed the tubes and allowed a solid substance called petroleum coke to form inside. Valero’s analysis concedes that the deteriorating conditions were “not timely identified and mitigated, leading to the tubes’ subsequent failure” and the March refinery malfunctions.

Solano County’s investigation reported that carbon monoxide and oxygen sensors in the refinery furnace were not operational for at least three years.

“Proper functioning sensors would have provided an indication that the furnace was malfunctioning to Valero staff, allowing them to act sooner to correct the condition and prevent additional release,” said Terry Schmidtbauer, the county’s assistant director of resource management, in an email.

“The issue with the furnace upset the system,” Schmidtbauer said.

Those system issues became more evident in early March as two other refinery components experienced problems. One was a fluid coker, which heats up and “cracks” the thickest components of crude oil processed at the refinery. Another, a flue gas scrubber, removes fine particles before gases are released from the facility’s smokestacks.

Malfunctions with those devices led to an increase in carbon monoxide levels, according to Valero, To reduce those levels, refinery crews ended up increasing the temperature on the furnace tubes, thus accelerating their deterioration.

There was little liquid in the tubes, which puts them at risk of damage, according to Professor Eric Smith of Tulane University’s Energy Institute, who specializes in refinery operations.

“One result is thermal degradation of the metal tube,” said Smith, who reviewed company and county findings. “Another effect is that the liquid that does make it through the tube is converted into petroleum coke.”

That dynamic led to the release of sooty smoke and resulted in elevated levels of particulate matter and a health advisory.

County inspectors discovered several problems with lines that carry petroleum coke. On the day the refinery was shut down, one was leaking. Valero staff told Solano officials in April another line had failed five times in the last three years.

The county’s Department of Resource Management has ordered Valero to make a series of changes, some of which it has already completed. They include orders to reduce petroleum coke releases, new procedures for preventing the overheating of furnace tubes and increased training.

Solano County’s Schmidtbauer said the department was still assessing what penalties it will levy against the refinery.

Local air regulators issued 12 notices of violation against Valero. Ralph Borrmann, a spokesman for the air district, said the agency’s probe is not yet complete.

An investigation by California’s Division of Occupational Safety and Health, Cal/OSHA, is expected to wrap up in the coming weeks, according to agency spokesman Frank Polizzi.

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    Refineries asking for exemption from state power shutdowns during high fire danger – Valero Benicia lawsuit on hold

    KQED, THE CALIFORNIA REPORT

    California Oil Industry Sounds Alarm Over Utilities’ Power Shutoff Plans

    By Ted Goldberg, Aug 20, 2019

    A refinery in the Los Angeles suburb of Carson burns off flammable gases after a September 2005 power outage blacked out much of the L.A. area. (David McNew/Getty Images)

    The industry group representing oil companies in California says if the state’s utilities shut off power to refineries during periods of high fire danger, the facilities could be knocked offline, resulting in major pollution releases and increased gasoline prices.

    The Western States Petroleum Association asked California regulators in early May for exemptions from power shutoff plans that the state and electrical utilities have adopted to reduce the chances of power lines starting fires during extremely windy and hot conditions.

    The industry group warned that an outage as short as a minute could result in refineries going off line for up to three weeks, triggering a series of ugly consequences.

    “An uncontrolled shutdown of a refinery from a de-energization action would result in immediate emergency load shedding, flaring and a heightened risk of a catastrophic event,” the association wrote in a letter to the California Public Utilities Commission.

    The filing has prompted an angry reaction from a leading environmental group, which says it fears the oil companies will use a power shutdown as a justification for harmful emissions.

    “It’s outrageous that action to protect against wildfire risk might result in dangerous pollution,” said Clare Lakewood, a senior attorney at the Center for Biological Diversity. “Refineries shouldn’t be allowed to use this as an excuse to contaminate the air we breathe.”

    When asked recently about the petroleum association’s concerns, a PG&E representative said the utility would work to restore power faster for refineries after the shutoffs.

    “We are continually working to analyze our systems, refine our procedures and further assess how we can minimize the impacts of a public safety power shutoff. This includes working towards the ability to be able to prioritize the re-energization of critical infrastructure like oil refineries,” said Jeff Smith, a PG&E spokesman.

    Two weeks after the association’s filing, the commission approved PG&E’s shutoff plans. Oil companies did not get the break they wanted.

    But the association’s concerns have not faded. The head of the industry group continues to call on the state’s utilities to keep the power flowing to refineries even during periods of high fire danger.

    “Unplanned shutdowns imposed by a utility can result in health, safety and environmental impacts,” Catherine Reheis-Boyd, the group’s president, said in a statement.

    “If a utility’s actions disrupt the fuel supply chain, this could significantly impact affordable fuel costs for businesses and consumers in California,” Reheis-Boyd said. “Utilities need to make sure that they are investing adequate resources to protect critical facilities to ensure that any de-energization event is used as an absolute last resort and does not cause more harm to Californians.”

    PG&E Shutoff Plan Scrutinized

    The industry’s concerns were highlighted last week when state lawmakers scrutinized PG&E’s shutoff plans. State Sen. Scott Wiener. D-San Francisco, mentioned the refineries while questioning a PG&E executive.

    “We saw the oil industry, and I’m not usually aligned with the oil industry, but their letter was very compelling. That’s pretty problematic for that to happen,” Wiener said during a state Senate subcommittee hearing last Wednesday.

    PG&E says it recently met with the industry to discuss its concerns, but it has not signaled an intention to alter its shutoff plans.

    Sumeet Singh, the PG&E vice president overseeing the company’s wildfire safety program, told the panel that the transmission system serving refineries is built with redundancy in mind.

    “When you look at our transmission system, by nature, especially the 100-kilovolt and above … there’s quite a lot of reliability that’s built into it,” Singh said. That means “if you lose a line, you have another” line as a backup, he added.

    Singh also suggested that the oil industries can take PG&E to court “if they fundamentally believe that the decision that we made was inaccurate, inappropriate, targeted in some way, led to some harm.”

    2017 Power Outage at Valero Refinery

    An oil company lawsuit against the utility would not be unprecedented. A May 2017 power failure at Valero’s Benicia plant triggered a major release of toxic sulfur dioxide and prompted emergency shelter-in-place orders.

    The CPUC blamed PG&E for the outage, but declined to punish the company. Valero filed a lawsuit against the utility, seeking more than $75 million in damages. That lawsuit is currently on hold pending the outcome of PG&E’s bankruptcy proceedings.

    The industry’s filing with the commission says the 2017 Valero outage proves the dangers an electricity failure poses to a refinery.

    Currently, the Valero refinery is not in an area designated by PG&E as one at high risk for a public safety power shutoff. Solano County inspectors and Benicia fire officials note that the refinery gets power from two separate lines.

    Terry Schmidtbauer, Solano County’s assistant director of resource management, which oversees the Benicia facility, says the likelihood of Valero losing power from a pre-emptive shutoff is low.

    “That being said, we are all aware of the past events where Valero did lose all power and had to shut down rather quickly. Such an event is not impossible, even if highly unlikely,” Schmidtbauer said.

    Both in 2017 and last March, when Valero shut down due to two refinery component malfunctions, the cost of gasoline in California increased.

    Schmidtbauer said after the 2017 outage, county inspectors told Valero to set up a procedure by which it would rely more on fuel gas and steam to generate electricity at the plant to run the refinery if it were to lose power from PG&E.

    A Valero spokeswoman did not respond to a request for comment.

    Contra Costa County’s refineries — the Chevron, Shell, Phillips 66 and Marathon plants — are expected to rely more on their cogeneration facilities and reduce refining in cases of power shutoffs, according to Randy Sawyer, the county’s chief environmental health and hazardous materials officer.

    “I am expecting that they will cut back on their operations so they can continue to operate somewhat on their own,” Sawyer said.

    Shell’s Martinez refinery has emergency backup systems, but they are not enough to power the entire plant, according to Shell spokeswoman Ann Notarangelo.

    “We do not have enough onsite generation to sustain plant operations in the event of a complete loss of power from PG&E,” Notarangelo said.

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      After Two Major Refinery Accidents, Valero and Benicia Take Steps To Work Better Together

      [Editor: In addition to coverage of the current news story, KQED’s Ted Goldberg presents here an excellent summary of Benicia/Valero issues over the last 3 years.  – R.S.]

      After Two Major Refinery Accidents, Valero and Benicia Take Steps To Work Better Together

      By Ted Goldberg, KQED, Jun 25, 2019

      The Valero refinery in Benicia. (Craig Miller/KQED)

      Benicia officials are set to consider a plan designed to keep the city and its residents better informed when the town’s largest employer, the Valero refinery, has problems.

      The City Council on Tuesday plans to vote on an agreement with the company aimed at establishing a stronger air monitoring network, improving communication and giving the public more access to information about the facility.

      The vote comes three months after a series of serious refinery malfunctions and in the wake of a battle over operations at the facility that spilled over into the Solano County city’s last council election.

      In March the refinery sustained its second major accident in two years.

      The malfunction led to a significant release of soot and smoke that prompted a brief health advisory and a more than 40-day shutdown of the facility — a closure that contributed to last spring’s increase in gasoline prices.

      Under the new proposal up for a vote on Tuesday, Valero would pay $278,000 a year to fund a division chief position at the Benicia Fire Department. The person who holds that job would work as a public liaison and be the point of contact for residents who have concerns or complaints about releases from the refinery. Valero would respond to the division chief’s “reasonable requests for information.”

      The proposal also calls for Valero to give risk management and safety plans to the city, provide the Fire Department with incident reports 72 hours after significant refinery malfunctions and hand over investigative reports to city officials. The city would also work to create a “single, easy” place where residents can find such reports.

      The agreement also promises improved air monitoring by Valero.

      Last November, the company completed installation of a set of air monitors along parts of the fence line of its refinery. But after the releases in March, the site that publishes the fence line data included a warning that all of its measurements should be considered “questionable until further notice” because several of its parts required adjustments.

      City staff say Valero plans to build, install and maintain more air monitors along its northwest boundary at a cost of $1.5 million. The company is also expected to spend $460,000 on adding “community” air monitors that would be located in the city.

      The measure has drawn mixed reaction from members of the City Council, which in the past has considered an industrial safety ordinance, or ISO, to give local officials more oversight of the refinery.

      Benicia Mayor Elizabeth Patterson called the proposal a “good first step” but wanted assurances the new air monitors would be effective.

      “We clearly need to improve our air quality and acknowledge all the sources of air pollution,” Patterson said in an email Monday.

      “This looks like a decent attempt to deal with all the issues that have been presented regarding air monitors and ISOs,” said Councilman Tom Campbell.

      But Campbell pointed out that there’s no timetable for the proposed actions. He said if the Fire Department’s new division chief who worked as a public liaison is aggressive, the agreement would work.

      “The division chief is in our seat at the table,” he said.

      Councilman Steve Young called the proposal “an improvement” over current practices, but said it should be stronger.

      “There should also be warnings to the public prior to any planned instances of increased flaring, as happens during turnarounds or other major maintenance activities,” Young said.

      Councilmember Christina Strawbridge, the town’s vice mayor, called the agreement “well thought out and void of politics.”

      A spokeswoman for Valero declined to comment on the proposal.

      The March problems were the latest in a series of incidents in which the city and company have sometimes been at odds.

      In September 2016, the Benicia City Council rejected Valero’s plan to build a railroad terminal that would allow trains to deliver crude petroleum to the refinery.

      In May 2017, the refinery suffered a power outage that triggered the release of more than 80,000 pounds of sulfur dioxide.

      That 2017 episode led to an effort by some on the council to consider an industrial safety ordinance.

      Mayor Patterson, who complained that Valero and agencies that have oversight of its refinery have failed to provide the city “a seat at the table” when it comes to information about the facility’s problems, championed the measure.

      The City Council rejected the ordinance a year ago.

      But debate over the regulations set the stage for last November’s hard-fought election in which Strawbridge and another council candidate, both backed by a political action committee funded by Valero and its workers’ unions, beat an environmentalist candidate backed by Patterson.

      Strawbridge, who voted against Valero’s bid to build a crude-by-rail terminal, acknowledged in an email Sunday that “tension had escalated with the refinery since the city went through that process. It intensified with last year’s election.”

      The March malfunctions are the source of several ongoing investigations: Valero, the air district, state workplace regulators and Solano County inspectors are still looking into the incident.

      The releases exposed weaknesses in how the air in Benicia is monitored after a refinery incident.

      When soot began spewing from the refinery’s stacks, for instance, the Bay Area Air Quality Management District had to send a van to Benicia because it does not run a stationary air monitoring device in the city’s residential areas.

      Since then the agency has been working on finding a monitoring site, air district spokeswoman Kristine Roselius said Monday.

      District officials visited six potential sites and determined that it wants to place a new air monitor at Robert Semple Elementary School, which is three-quarters of a mile southwest of the refinery, Roselius said.

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        Benicia Fire Chief Josh Chadwick – PGE / Valero prepared for power shut-offs

        Questions on PG&E shut-offs prompt Benicia response

        Vallejo Times-Herald, June 15, 2019

        In response to question about PG&E’s public safety power shut-offs [PSPS’s] and their potential impact to the city of Benicia and the Valero Benicia Refinery, the Benicia Fire Department said Fire Chief Josh Chadwick has been working closely with the State Office of Emergency Services and PG& E to gather answers.

        Here is what is known at this time:

        • The power interruptions in Benicia on Monday and Tuesday were not related to a PG& E PSPS.

        • PSPSs are designed to shut power off in either the Elevated or Extreme California Public Utilities Commission (CPUC) Fire-Threat Districts. There are no CPUC Extreme Fire- Threat Districts in Solano County. The only Elevated Fire-Threat Districts in Solano are in North Vacaville near Lake Berryessa and in the West area of Green Valley.

        • Valero Refinery has two separate sources of power — one that comes in from the north and the other that comes in from the south. Their system is designed so that if one of the sources were to be shut off, the second source would be sufficient to keep the power to Valero uninterrupted.

        • Per PG& E, PSPS are essentially based on upcoming weather events and should not come without warning.

        • Unlike a sudden and unexpected power loss, with prior notice Valero has the ability to limit impacts through a controlled shut-down.

        • Portable generators would not have the capacity to provide sufficient power to supply the refinery.

        • There are numerous major commercial, industrial, and critical infrastructure facilities located throughout California which would be severely impacted by a loss of power. State OES personnel are currently working with the California Public Utilities Commission to address these facilities.

        To learn more about Public Safety Power Shutoffs, visit the PG& E PSPs webpage.

        Josh Chadwick, Benicia Fire Chief

        For more information, contact Josh Chadwick, Fire Chief at jchadwick@ci.benicia.ca.us or (707) 7464275.

         

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