Today, May 9, I read in the Mercury News the article headlined, “Is Gavin Newsom changing his tune with the oil industry?” It happens that yesterday I’d been discussing this possibility with Matthew Green (at KQED News). In his April 26th article, Matthew had conjured that Valero could be throwing a Hail Mary for regulatory relief, for at least indeterminate years’ survival of its Benicia refinery.
I’d followed up with his football analogy imagining who Valero’s wide receiver would be. Based on what I’d been hearing about possible legislative changes to authority governing refineries and other heavy industrial polluters, it wasn’t difficult to think Valero and its lobbyists with the Western States Petroleum Associates would be targeting the Governor, whose political career hangs on the state’s economy.
Newsom would be defended by CARB (Cal-EPA’s California Air Resources Board). In such scenarios in play, Valero’s long shot could end up “incomplete” or be intercepted; or somebody at scrimmage gets “off sides” yardage penalty. Whatever’s the case, right now the state’s plays aren’t over and neither are Valero’s. The only certainty, the game being played is a nail-biter for Benicians. But wait a minute.
The fire that happened Monday ignited at a furnace, as stated in the Air District’s Notice of Violations released this week. That particular furnace happens to heat the oil feed to 1000 degrees F, before it enters the distillation tower, the “FCCU”— the Fluid Catalytic Cracking Unit or “cat cracker” which is the primary processing unit distilling gasoline, kerosene (jet fuel), diesel and other products, which then go on to be further refined throughout the facility. Without the furnace and FCCU there is no oil refining. Was the FCCU tower damaged in the fire?
It was uncanny that the fire was occurring just as our mayor was being interviewed on KQED’s Forum, when he was discussing the vexing financial problem for the City of Valero’s announcement. Certainly, in that very moment, the fire was adding complexity to Valero’s decision-making which they’d left hanging, purportedly til next year, April 2026. But, given that “idling” is one of three proposed options announced to the CA Energy Comm (CEC), I assume that the refinery is at least temporarily forced into idling as a result of the fire.
Will Valero decide to make significant capital investment now to fix the furnace and, if damaged, the FCCU, in order to keep operating for another year? I sure don’t think the City should have to wait weeks and weeks for a “root cause analysis” investigation to be completed to hear Valero’s decision. If their decision is to restore operations and do a temporary fix, OR permanently idle the facility now, this decision has immediate ramifications for the City and community, and certainly for Valero employees, operators, contract workers.
Putting optimum idealizations aside, under current circumstances, we here in Benicia are hardly experiencing the beginnings a “just transition” We’re going to endure an ABRUPT transition.
In the meantime, we have to stay vigilant and resolutely care about safety and health risks posed by a very vulnerable facility in its apparent final phases of operational existence.
We must look ahead: closure and cleanup, and the huge prices they exact, are near-term issues now that finally demand public attention.
Marilyn Bardet Good Neighbor Steering Committee BCAMP Board Member BISHO Working Group Valero Community Advisory Panel
The Valero refinery in Benicia on Sept. 21, 2023. The potential closure of the massive Benicia oil refinery by next April would have a huge impact on both the city’s economy and the state’s oil supply. (Martin do Nascimento/KQED)
A week after Valero announced plans to “idle, restructure or cease” operations at its massive Benicia oil refinery by next April, company executives said that while the plant’s closure was more than likely, it was not yet a foregone conclusion.
In an earnings call Thursday, Valero executives left open the possibility of a Hail Mary, saying they had plans to meet with state and local officials to discuss potential options.
“I do think there’s a genuine interest in California to avoid the closure,” Richard Walsh, Valero’s executive vice president, said during the call. But he quickly added, “Our current intent right now is to close the refinery.”
A week after Valero announced plans to “idle, restructure or cease” operations at its massive Benicia oil refinery by next April, company executives said that while the plant’s closure was more than likely, it was not yet a foregone conclusion.
In an earnings call Thursday, Valero executives left open the possibility of a Hail Mary, saying they had plans to meet with state and local officials to discuss potential options.
“I do think there’s a genuine interest in California to avoid the closure,” Richard Walsh, Valero’s executive vice president, said during the call. But he quickly added, “Our current intent right now is to close the refinery.”
Valero CEO Lane Riggs cited California’s tough “regulatory and enforcement environment” as the main driver behind the company’s intent to cease operations at the sprawling North Bay facility. The sixth-largest refinery in the state, it currently produces up to 145,000 barrels of crude oil a day, accounting for about 9% of the state’s production.
“California has been pursuing policies to move away from fossil fuels for really the past 20 years,” Riggs said, calling the state’s regulations “the most stringent and difficult of anywhere else in North America.”
Benicia Mayor Steve Young doesn’t disagree with the assessment, but said he wishes the company had provided more lead time.
“We need to get moving on this quickly because 12 months is not a long time given the severity of the economic impact,” said Young, noting that nearly 20% of Benicia’s $60 million budget comes from the refinery. “I think that’s part of my frustration, is how little time we have to try to plan for some kind of an alternative.”
Shutting down the facility, he added, would also be a major blow to the hundreds of residents who work there, not to mention the scores of restaurants, hotels and other businesses that provide services to those workers in this city of some 27,000 residents.
The Valero refinery is also the exclusive supplier of jet fuel to nearby Travis Air Force Base, which it delivers through a direct pipeline.
“If that is stopped, what does that mean to the base?” Young said. “Travis uses an amazing amount of fuel to fly all their planes, much more than can be easily replaced, and certainly not replaced within a year. So I think that this becomes a matter of real concern to the Defense Department and it’s potentially a national security issue.”
Valero dropped its bombshell April 16 announcement roughly six months after regional and state air regulators fined the company a record $82 million for secretly exceeding toxic emissions standards for at least 15 years. And last month, city leaders voted unanimously to impose moderate new safety regulations on the facility.
Map by Matthew Green/KQED
“I suspect that compared to other refinery operators, they’re a pretty good business operator. But they’ve also had a pretty bad track record on public safety,” said Terry Mollica, who leads a group of residents that pushed for the city’s new safety rules to increase oversight of the refinery.
But Mollica said that he doesn’t think anybody in his group is particularly excited about the possibility of the facility closing altogether.
“There would be long-term and short-term impacts on the community,” he said. “People would lose their jobs. None of us want to see that happen particularly.”
Valero has owned and operated the Benicia refinery since 2000. The refinery was originally built in 1968 for Humble Oil, later called Exxon, and began operations the following year.
Its possible closure comes amid a growing exodus of traditional oil refiners in California. Phillips 66’s refinery in Rodeo and Marathon’s facility in Martinez both recently converted operations to biofuel production. Phillips 66 also plans to close its Los Angeles-area refinery — the seventh largest in the state — later this year.
And Valero executives, in this week’s earnings call, hinted that they may also soon consider “strategic alternatives” for the company’s only other California refinery, located near Los Angeles, which accounts for more than 5% of the state’s crude oil supply.
“California is phasing out its gasoline consumption and refiners see that coming,” said Severin Borenstein, a UC Berkeley energy economist. “We should be seriously concerned about how all that gasoline supply is going to get replaced.”
California has dramatically reduced its reliance on fossil fuels in recent decades, but most residents still drive gas-powered cars and will continue to do so for years to come, Borenstein said, even though the state already has some of the highest gas prices in the nation.
Gov. Gavin Newsom underscored that sense of urgency this week in a letter (PDF) to California Energy Commission Vice Chair Siva Gunda. He urged the commission to “redouble” its efforts to ensure refiners “continue to see the value in serving the California market, even as demand for fossil fuels continues its gradual decline over the coming decades.”
“I am directing you … to reinforce the State’s openness to a collaborative relationship and our firm belief that Californians can be protected from price spikes and refiners can profitably operate in California — a market where demand for gasoline will still exist for years to come,” Newsom wrote.
A customer prepares to pump gas into his truck at a Valero gas station on July 22, 2013 in Mill Valley. (Justin Sullivan/Getty Images)
Almost immediately after Valero’s announcement, Newsom was lambasted by state Assembly Republicans, who said the potential closure was among the growing number of “real-world consequences” of [his] war on California energy producers that was “becoming clearer by the day.”
In his letter, Newsom defended two different laws he signed in the last two years that give the state more oversight of the oil industry and regulate backup supply when refineries go offline in order to prevent market irregularities. He also asked state energy and environmental officials to produce a report by July 1 on “any changes in the State’s approach that are needed to ensure adequate supply during this transition.”
“The California Energy Commission continues to be committed to working with stakeholders to explore options to ensure an affordable, reliable, and safe transportation fuel supply,” Sandy Louey, a spokesperson for the commission, said in an email in response to Newsom’s letter.
Young, whose city has long felt the health impacts of the refinery’s toxic releases, said he understands the motivation behind California’s ambitious regulations.
“I think certainly [California’s] done them for lots of good environmental reasons, and that obviously climate change is a real thing and burning fossil fuels is a direct contributor to it,” he said. “Did they go too far? I don’t want to say that. But it certainly has created an environment where oil companies feel that either they’ve been unfairly targeted or they are just seeing this as perhaps a way to negotiate some rollbacks of some of those things.”
Young acknowledged that the refinery’s closure would yield some “net benefit” to the health and safety of his community.
“And so from an environmental point of view, sure, it’s certainly possible to look at it as a silver lining,” he said. “But overall, given how quick this is unfolding, I’m certainly not celebrating it by any means.”
The Benicia City Council plans to vote on a controversial industrial safety ordinance next month despite fierce opposition from oil giant Valero and other industrial businesses that operate in the city.
Oil executives, employees and residents packed a City Council meeting Tuesday to weigh in on the proposal, which would create a citizens’ oversight commission, boost community air quality monitoring and empower city officials to issue fines for safety and air quality violations.
The new law would replace an existing agreement with Benicia. Valero has threatened to sue the city if it moves ahead with the ordinance.
“It’s a governmental overreach, significant governmental overreach — even in California!” Lauren Bird, general manager and vice president of the Benicia refinery, told the council. He touted the facility’s track record of responding to and containing plant malfunctions.
“ We work hard every day to maintain a safe operation,” Bird said. “Are we perfect? Absolutely not. But we work round the clock, 24/7, 365 days, multiple times a shift, multiple people, dedicated people who work hard, who are well trained, who are capable.”
Dozens of refinery employees and company supporters praised Valero for financial contributions to the community and warned against alienating the town’s largest taxpayer.
“ If you keep poking that golden goose, one day it’s going to fly away,” said Mark Hughes, a former council member. “And that’s not a threat, that’s not any inside information I have about Valero. It’s just the likely outcome of a company that constantly feels that it’s being pushed away.”
But Anthony Burnasconi said residents like him are paying too high a price for Valero’s community investments.
“Valero can build baseball fields and donate to the schools, and that is good,” Burnasconi said. “But Valero is also a multibillion-dollar corporation that can spill poison into our air.”
Last year, the regional air district fined the company $82 million for failing to report excess toxic emissions at the Benicia refinery. Those releases occurred between 2003 and 2019 and were not disclosed to the public until 2022.
“More important than the amount of money involved was the number of years that the problems had been ignored,” said ordinance proponent Terry Mollica, speaking after Tuesday’s vote. “Sixteen years of just sweeping the problem under the rug. That’s what people want the ISO to address.”
“Benicia showed up tonight,” said Councilmember Kari Birdseye, who, along with Councilmember Terry Scott and Benicia Fire Chief Josh Chadwick, refined the industrial safety ordinance over 14 months and held dozens of meetings with stakeholders.
“Whether they were for or against it, all of the testimony was very impactful and meaningful to our final decision, and I am over the moon with the 5–0 vote,” Birdseye said. “It showed that our council takes the health and safety of Benicia very seriously.”
Supporters of the ordinance held sunflowers while the dozens who came to speak against the ordinance sported Valero’s dark blue uniforms and T-shirts. Parents on both sides brought their children.
Resident Julian Christi put it simply, saying, “I just want to keep my family safe.”
His daughter Charlotte also addressed the council.
“I am 10 years old, and I’ve lived in Benicia all my life — it’s all I know,” she said. “I go to Joe Henderson Elementary, and I would like to say that I am also in favor of the ISO.”
Officials in Benicia and Solano County want to know why Valero’s oil refinery there was able to release excessive levels of hazardous chemicals for more than 15 years before regional air regulators discovered the emissions — and why those regulators failed for another three years to alert local communities to the potential danger.
A Bay Area Air Quality Management District investigation launched in November 2018 found that one refinery unit produced pollutant emissions that were, on average, hundreds of times higher than levels permitted by the agency.
The emissions consisted of a variety of “precursor organic compounds,” or POCs, including benzene and other toxic chemicals.
An air district rule limits the release of such compounds to 15 pounds a day and a maximum concentration of 300 parts per million. The district’s investigation found that from December 2015 through December 2018, POC emissions averaged 5,200 pounds a day — nearly 350 times the daily limit. The average POC concentration recorded during the first year of that period was 19,148 parts per million, more than 60 times the level set by the agency.
Those findings led the air district to issue a notice of violation to Valero in March 2019. But it wasn’t until late last month that the agency went public and announced it would seek to impose an abatement order requiring the refinery to halt the excessive pollution releases.
“That was the first I had heard of it,” said Benicia Mayor Steve Young, one of four members of the city council who say they want to know why the community was not told earlier.
“We should have been notified by the air district when this was first discovered in 2019, and certainly while negotiations with Valero were going on,” he said.
The Solano County agency responsible for inspecting the Valero refinery and investigating incidents there says it was also left out of the loop.
Chris Ambrose, a hazardous materials specialist with the county’s Environmental Health Division, said in an email his agency “was never formally notified by or requested to participate in BAAQMD’s emissions investigation.”
A health risk assessment carried out by the air district in 2019 found that the refinery’s release of benzene and other pollutants posed an elevated risk of cancer and chronic health threats and violated several agency regulations.
Solano County Health Officer Bela Matyas told KQED that because the wind often pushes refinery emissions away from Benicia, the refinery’s prolonged pollution releases didn’t likely pose any extreme risk to residents.
“But it doesn’t excuse the process. It doesn’t excuse the failure to adhere to standards and it doesn’t provide any excuse for the fact that the city of Benicia was put at some risk as a result of these emissions,” Matyas said.
The air district, which plans to hold a virtual public workshop on the Valero releases on Thursday night, is defending its decision to not alert local officials earlier.
“To protect the integrity of the air district’s investigation and ensure that Valero is held accountable, we were not able to notify the city of Benicia until the investigation was concluded,” district spokesperson Kristine Roselius said.
“Going forward, the air district is committed to additional transparency around these types of ongoing violations, to putting companies in front of our hearing board in a public forum where information can be shared, and working to ensure these types of cases are brought into that forum as quickly as possible,” she said.
The hearing board Roselius referred to is an independent panel created under state law to rule on issues that arise at individual facilities that the air district regulates. The board is scheduled to consider the district’s abatement order at an all-day public session on March 15.
At issue is the infrastructure that produces hydrogen for the facility. Hydrogen is integral to several refining processes, but demand for it throughout the refinery fluctuates. When the supply of hydrogen in the system is higher than the demand for it, the refinery vents the unneeded gas into the atmosphere.
At issue is the infrastructure that produces hydrogen for the facility. Hydrogen is integral to several refining processes, but
The air district says that soon after it launched its investigation in late 2018, it discovered that Valero had known since 2003 that the refinery was venting hydrogen that contained a range of regulated pollutants, including benzene, toluene, ethylbenzene and xylene.
In 2019, Valero devised a workaround that reduced emissions significantly but still failed to bring them within allowable limits.
The air district’s proposed abatement order would set up a timeline for the company to design and build a new vent system to bring the facility into compliance, with the work completed no later than the facility’s next “turnaround” — the industry term for a refinery-wide maintenance shutdown.
The Benicia City Council has asked Valero executives and air district officials to answer questions at its March 1 council meeting.
Mayor Young, Vice Mayor Tom Campbell and council members Christina Strawbridge and Lionel Largaespada all say they want to know how the emissions went undetected for so long.
“I’d like to know how it was missed when Valero has had two or three full plant turnarounds since 2003 and the air board is out there every week,” Campbell said.
A Valero representative responded to a request for comment by referring KQED to a city of Benicia press release that includes the air district’s proposed abatement order.
The air district says it’s consulting with the U.S. Environmental Protection Agency to determine whether the Valero releases violated federal law. It’s unclear when the EPA learned of the refinery problems.
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