Tag Archives: Stephen Golub

Benicia CA, Stephen Golub, Valero Benicia Refinery, Valero Energy Corporation

Stephen Golub: What’s Behind Valero’s “Current Intent” to Close the Benicia Refinery?

Eight factors that may be influencing Valero to shut down the Benicia Refinery

 Stephen Golub, A Promised Land – America as a Developing Country

By Stephen Golub, Benicia resident and author, “Benicia and Beyond” column in the Benicia Herald, April 27, 2025

Before addressing the heart of this article, I want to flag a couple of important matters…

First, my sympathies for our many Catholic neighbors and friends in Benicia affected by the passing of Pope Francis. I’ll confess to not being a religious person. But that didn’t stop Pope Francis from touching my life and billions of others (Catholic or not) in terms of the inspiration and compassion he displayed.

Second, even as we consider the ramifications of the focus of this column – the transition Valero is undertaking – I want to emphasize my hope that Benicia can and will help those most immediately affected: the workers who stand to lose their jobs and the businesses that stand to lose substantial income. I realize that there are restrictions on how the Air District can spend the tens of millions of dollars in fines it negotiated with Valero by virtue of its over 15 years of undisclosed poisoning of our air. I hope those restrictions can be interpreted or simply changed to allow some help for those suffering most from Valero’s decision.

Which brings me to the column’s focus: What is behind Valero’s April 16 notification to the California Energy Commission (CEC) of “of its current intent to idle, restructure, or cease refining operations” and its executive vice president’s April 24 follow-up statement that “Our current intent is to close the refinery”? I obviously am not sitting 1,700 miles away in the corporation’s San Antonio headquarters, where the decision was made. But based on a number of in-person and online discussions, I’ll offer some somewhat informed speculation.

To start with, let’s cut to the chase: When a company decides to fire folks, it’s the company’s decision and responsibility, no one else’s.

Let’s also bear in mind that we don’t know for sure what Valero’s going to do, in view of its framing everything in terms of “current intent.” Intents can change.

Finally, let’s hope and expect that Valero will very soon confirm that it intends to fully clean up the refinery of pollutants, toxic wastes, etc. that it may have deposited (whether intentionally or unintentionally, legally or illegally) in the facility, on the grounds and in surrounding waters and other areas. Cleaning up one’s mess is what we expect even of little children. It’s certainly a requirement for a major corporation.

Perhaps its April 16 statement that it has “expected asset retirement obligations of $337 million as of March 31, 2025” is an indication of that clean-up intent; perhaps not. Regardless, we need that clean-up commitment quickly, in clear, non-technical language.

So, what contributed to this decision, or at least to the “current intent”? Again, I certainly don’t know for certain. But I know more than I did a week ago. Because this is so important to Benicia, I delve into this matter a bit more deeply than I did in last week’s column. So, based on both personal and online discussions, it seems that some combination of these international, national, state and market factors may well have been at play:

A negotiating tactic. Returning to the “current intent” consideration, it’s very possible that the threat of closing the refinery, coupled with the rising fuel prices that the decreased fuel supply could cause for Californians, is a ploy to force the state to relax certain regulations. If so, it may be working. A few days ago, Gov. Gavin Newsom instructed the CEC to “redouble” efforts to ensure that California refineries “continue to see the value in serving the California market…”

California regulations. Newsom’s letter seems directed at a core concern of Valero and other refinery operators: that they see California regulations as being too burdensome. While I can understand their concern from a business perspective, I also like the fact that those regulations contribute to cleaner air, healthier kids, less dangerous operations, price-gouging prevention and other benefits. For instance, a recently adopted California law requires California refineries to maintain minimum levels of fuel inventories, which in turn helps prevent surge pricing.

The cost of upgrading the refinery’s operations. As Benicia well knows, there have been frequent operational, safety, health and emissions issues at the refinery. As explained in a recent KQED interview with a UC Berkeley energy economist, “the Benicia refinery’s many production and emissions problems would likely require significant, costly upgrades to address,” so Valero probably decided that it was not worth investing in those upgrades.

Improved profits. That UC Berkeley economist has also indicated that, by reducing supply, shutting down the Benicia facility could increase profits for Valero’s Southern California refinery.

A declining market. Even as the refinery’s possible closure disrupts the California fuel market in some powerful and potentially painful short-term ways, the writing is on the wall for decreased reliance on fossil fuels – particularly in California but also beyond it as electric vehicle sales increase and international trends come into play. Valero understandably needs to plan in terms of decades instead of just years. The declining market could contribute to its reluctance to make upgrades at the refinery.

Tariffs. Though planned tariffs on various imports are such a bouncing ball that it’s tough to keep track of where they stand, the 10 percent that the Trump Administration has threatened to impose on Canadian oil imports (more than a quarter of U.S. refinery demand) could lower Valero’s and other firms’ profit margins. This could influence a cost-benefit analysis of whether operating the refinery makes economic sense. Similar tariff calculations could apply to equipment and other imports important to refinery operations.

A failed sale of the refinery. There is much speculation, some apparently informed by Valero personnel, that the corporation saw a sale of the refinery fall through last year. This could explain relatively recent personnel changes the corporation made at the facility, in anticipation of the planned purchase. In the wake of the failed sale, Valero might have decided that for various reasons outlined here it did not want to continue operating the refinery – or, again, that threatening to close it could push changes in California policies. Or perhaps it even felt that publicly announcing its plans could trigger new investors’ interest in purchasing the operation.

A problematic property. Some of the many factors I’ve sketched here could add up to the refinery being difficult to maintain or sell. Prospective buyers might have seen too many problems to make the purchase of the property financially viable. Continued operations could force the facility to make a fateful choice: on the one hand, conduct expensive upgrades in light of necessary health, safety, environmental and operational requirements; on the other, additional scrutiny of the ways it might dangerously fall short without such upgrades.

Once again, I’m speculating here rather than offering expert opinion. But in understanding how Benicia moves forward, it’s important to consider how we got here.

One thing is clear: Whatever the precise mix of causes, this decision was many months if not years in the making. It springs from major state, national, international and financial trends and factors reaching way beyond anything Benicia’s government has or hasn’t done.

Without holding out excessive hope for our neighbors and friends whose livelihoods are put at risk by the San Antonio headquarters’ decision, one other thing that seems clear is that it is not yet absolutely clear what Valero will do.

In any event, I hope that this list of potentially contributing causes helps a bit as we grapple with our current challenges and start to consider our community’s future.

Benicia resident and author Stephen Golub, A Promised Land

CHECK OUT STEPHEN GOLUB’S BLOG, A PROMISED LAND

…and… here’s more Golub on the Benicia Independent

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Stephen Golub: Benicia Strong: Understanding and Rising to the Challenge of Valero’s Decision

Valero Benicia Refinery to “idle, restructure, or cease refining operations” by next year

 Stephen Golub, A Promised Land – America as a Developing Country

By Stephen Golub, Benicia resident and author, “Benicia and Beyond” column in the Benicia Herald, April 20, 2025

Valero’s Wednesday notification to the California Energy Commission “of its current intent to idle, restructure, or cease refining operations” at its Benicia refinery by the end of April 2026 hit the City and California like a ton of oil-laden bricks.

My heart goes out to the Valero workers and Benicia businesses whose livelihoods are at risk as a result of this decision. As Benicia Council Member Kari Birdseye put it so well in my interview with her, with sentiments echoed by Mayor Steve Young and Council Member Terry Scott,  “If people are going to lose their jobs and businesses their incomes as a result of this move, addressing this has  got to be a priority for the City’s leadership.”  All also strongly sympathize with the nonprofits who may be denied future Valero funding.

This is an unfolding story, to put it mildly. In an attempt to pierce the haze generated by the Valero statement, here is a very initial attempt at some questions and answers – subject to change down the line as all parties clear the air on this development.

Is the refinery closing?

Not necessarily. Again, the Valero notification offers three options:  “to idle, restructure, or cease refining operations.”  Only one of these is closure, though that could involve Valero taking on immense clean-up cost. “Idle” is inherently temporary. “Restructure” can potentially mean all sorts of things, including  sale to another company or  focusing on biofuels or plastics production. Note too that Valero frames the statement in terms of its “current intent,” which gives the Texas-based corporation  some wiggle room.

Why is Valero doing this?

It could be a negotiating tactic, aiming to extract concessions from California regarding regulations, legislation,  policies or costs that the corporation finds unduly burdensome. In a related vein, it could be geared toward avoiding expensive upgrades necessitated by environmental, health or safety requirements that would have protected Benicians. As UC Berkeley energy economist Severin Bornstein put it in a KQED interview:

“California is phasing out its gasoline consumption and refiners see that coming,” Borenstein said, noting that the Benicia refinery’s many production and emissions problems would likely require significant, costly upgrades to address.

“So I think they looked at that and said, ‘Is it worth making that investment?’ and decided it probably isn’t,” he said.

Ironically, the rationale could even include increasing profits in certain respects. As per that KQED interview:

“Borenstein suggested that the company, which owns another refinery in Southern California, may also have calculated that shuttering production at its Benicia facility would raise gasoline prices statewide, helping its other refinery make more money.”

Did Benicia’s recently adopted Industrial Safety Ordinance play a role in this move?

Not according to Valero’s own statement on its decision, which attributes the move to far broader concerns, such as “years of regulatory pressure, significant fines for air quality violations, and a recent lawsuit settlement related to environmental concerns.

Recall, too, that the ISO would cost Valero a few hundred thousand dollars per year, in contrast with the company making $11.6 billion in profits in 2023 and 2024, a good chunk of that from its Benicia refinery. For Valero to quit Benicia because of the ISO would be very roughly equivalent to someone quitting a $50,000 per year job because of, at most, a $10 annual tax, or a business clearing $250,000 per year deciding to close down because of a $50 fee.

There’s one alternative though hopefully unlikely explanation that would partly attribute Valero’s decision to the ISO: The corporation has something to hide from the slightly increased scrutiny the ISO would spur of its emissions, operations, incidents and accidents. Again, hopefully this is not the case, but if Valero is seeking to avoid such scrutiny because it would reveal health, safety or environmental threats to Benicians, that in and of itself should be of great concern to us.

Let’s also bear in mind that the ISO  is a necessary response to a plethora of Valero violations, incidents and accidents dating back over 20 years, both in Benicia and beyond. These include but are by no means limited to Valero pouring toxic emissions hundreds of times the legal limits into Benicia’s air for 15 years without informing us, as well as repeated violations in Texas that were so severe that even the very conservative Attorney General in that very oil-friendly state saw fit to sue the corporation several years ago.

Finally, note that in preparing the ordinance Benicia bent over backwards to try to compromise and address Valero’s legal and operational concerns, resulting in an ISO in some regards more accommodating than other Bay Area refinery-hosting communities have and that other Bay Area refineries manage to live with. It’s hard to believe that a Benicia move so mild could trigger a Valero decision so massive, particularly in view of the far larger California forces and policies at play. In any event, the Benicia City Council twice voted unanimously for  the ISO.

Where do we go from here?

A few tentative thoughts:

  1. As Council Member Scott, who has extensive experience and expertise with corporate transitions and planning explains, “We can’t just look in the rearview mirror toward what Valero’s done; we need to peer through the windshield toward current and emerging opportunities.”
  2. More specifically, for instance, Benicia has about $64 million coming to it by virtue of the Bay Area Air District’s settlement with Valero over those 15-plus years of pouring poisons into Benicia’s air. These extraordinary circumstances could call for extraordinary solutions, involving interpreting Air District rules broadly or amending them to allow Benicia to adapt to this situation by, for instance, allowing aid to affected individuals and businesses, budgetary support or planning for the inevitable post-refinery economy.
  3. As Mayor Young emphasizes, in moving forward we need to address “the real world impacts on Valero employees and Benicia residents and businesses…even as we realize that this Valero move is in response to state decisions and policies rather than Benicia’s ISO.”

Benicia is strong, smart and resilient. Over the past several years, we made it through Covid and earlier budget challenges together. There’s no sugar-coating the fact that the current challenge could well impose pain. But if we pull together rather than point fingers, and pay special heed to the needs of the persons and businesses most affected, we can emerge stronger than ever.

More on this next week.

[Note: As a member of the Benicia Industrial Safety and Health Ordinance working group, I was involved in efforts to get the ISO adopted.]

Benicia resident and author Stephen Golub, A Promised Land

CHECK OUT STEPHEN GOLUB’S BLOG, A PROMISED LAND

…and here’s more Golub on the Benicia Independent

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Stephen Golub: Yes we can!…But what is Valero afraid of?

Islands of Hope

 Stephen Golub, A Promised Land – America as a Developing Country

By Stephen Golub, Benicia resident and author, “Benicia and Beyond” column in the Benicia Herald, April 6, 2025

The  waves of national bad news just keep on coming. But there are certain islands of sanity and hope in our political seas.

Some of it started on April 1 – no fooling! In Wisconsin, Democrat Susan Crawford beat her conservative opponent for the swing seat on the state’s Supreme Court by 10 points, despite Elon Musk and his minions pouring over $21 million into trying to defeat her. Also consider that day’s congressional  special election results in Florida: In two deep Red districts, the Republican margin of victory collapsed compared to November – from over 30 percent to less than half of that.

And of course, there were the April 5 pro-democracy/anti-Trump protests in over 1,200 U.S. cities, as well as across Europe.

Then there’s the island of waterside sanity and beauty otherwise known as Benicia. Capping a struggle that stretches back nearly a decade  and most recently entailed eighteen months of arduous efforts by Council Members Kari Birdseye and Terry Scott and Fire Chief Josh Chadwick, on April 1 the City Council unanimously approved an industrial safety ordinance (ISO).

By seeking greater accountability and transparency from the Valero Refinery and other local facilities handling hazardous materials, the ISO helps protect the health and safety of our kids, our seniors and all of us. It also ends Benicia’s odd situation as the only Bay Area refinery-hosting community that lacked such an ordinance.

The April 1 Council meeting featured dozens of ISO supporters in attendance and salient points highlighted by several of them. For instance, a Benicia-based doctor/medical professor noted the relatively high cancer and childhood asthma rates in Benicia and refinery-hosting communities elsewhere. He was careful to avoid blaming Valero in the absence of conclusive data, but voiced hope that an effective ISO could help protect Benicians’ health.

In addition, Birdseye passionately and persuasively pushed back on Mayor Steve Young’s suggestion that the Fire Chief’s examination of potential ISO fees for Valero and other covered facilities focus on recovering just 85 percent of costs. For his part, Scott eloquently articulated the reality that, even with the passage of the ISO, the fight isn’t necessarily over.

But for now, our small city’s struggle for an ISO – a fight that it once seemed we could not win – provides an invaluable lesson: Yes We Can.

So thanks to Birdseye, Scott, Young and in fact the entire Council for that unanimous pro-ISO vote. And thanks to current and former Valero employees, even if we disagree with them, for being good friends and neighbors; once again, the ISO fight is not with you, but with the Texas-based oil giant.

But speaking of that fight…

What is Valero Afraid of?

Over the past decade or so, Valero has dumped millions of dollars into political action committees and public relations efforts seeking to defeat City Council candidates who might support an ISO or otherwise stymy that kind of City oversight. Ironically, that  same money could have instead more constructively covered years of the refinery’s costs for abiding by an ISO, had one been adopted earlier.

Most recently, and to put the point mildly, Valero failed to constructively engage with the City’s efforts to seek its cooperation in crafting the ordinance. And it reportedly may pursue a lawsuit seeking to block the new law.

Why such strong opposition to such a modest measure?

After all, the ISO simply seeks to ensure that the City has the necessary information about Valero’s (and other covered facilities’) operations, incidents, violations and accidents, in order to help protect Benicians’ health and safety. This would be a distinct departure from the recent 15-year period during which the refinery spewed toxic emissions hundreds of times the legal limits into our air without notifying us.

Furthermore, over the past year the original draft ISO was modified in ways making it more amenable to Valero, so that the planned Oversight Commission facilitating the law’s implementation and public information does not have enforcement powers. And again, every other Bay Area refinery operates under the rubric of such an ordinance. So why can’t Valero?

I hope that Texas-based Valero will see fit to forego a lawsuit against the City, and instead strive  to be a good neighbor rather than in effect imposing punitive legal fees as we defend ourselves. But if it does launch litigation, I hope and expect that its current and former officials, managers and workers will be required to testify under oath about its operations, incidents, accidents and violations, not just in Benicia but across America. If it’s going to fight this common-sense measure so strenuously, we need to better understand what’s going on in the refinery to spark such ferocity and further necessitate the ISO.

I also hope that there’s no need to try to make Goliath suing David a national story, and that Benicia need not engage with other community, legal and environmental groups concerned about Valero’s violations and accidents across the country. In the absence of a lawsuit, I’d assume no one wants to pick such a fight.

As I’ve previously pointed out, even the very conservative Attorney General of Texas, one of the most oil-friendly states in the nation, saw fit to sue Valero in 2019 for years of serious, repeated violations – transgressions that had continued despite previous enforcement actions by Texas and federal authorities.

Though it would be naïve to consider the Texas AG a potential ally, even a quick perusal of the company’s track record turns up alarming Valero accidents spanning several U.S. locales. For instance, an  environmental/personal injury law firm is looking into fires at two separate Valero Texas refineries earlier this year. Similarly, in 2021 a massive fire at its Memphis refinery spewed oil onto the ground and into a stream, as well as thousands of pounds of toxic gas into the air. There could thus be ample room for joining forces with other concerned communities if necessary.

Though I’m a lawyer, I’m neither a litigator nor PR expert. But people who understand those fields far better than I do have explained that there are strong cases to be made in courtrooms and the court of public information if necessary.

Let’s hope it doesn’t come to that.

Instead of suing, be a good neighbor, Valero. That’s basically all that Benicia’s new ISO asks.

Benicia resident and author Stephen Golub, A Promised Land

CHECK OUT STEPHEN GOLUB’S BLOG, A PROMISED LAND

…and here’s more Golub on the Benicia Independent

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Stephen Golub: Australians and others are worried about America

Down But Not Under: In “No Worries” Australia, Worries About America

They’re feeling jumpy.

Also in Zimbabwe, Ireland, Lithuania, Russia (yes, even Russia)…

 Stephen Golub, A Promised Land – America as a Developing Country

By Stephen Golub, Benicia resident and author, “Benicia and Beyond” column in the Benicia Herald, Mar 23, 2025

My wife and I recently returned from a vacation in Australia, a land of beautiful beaches, other natural splendors, kangaroos galore and remarkably friendly people concerned about what America’s current course means for their country.

From Worries to Outrage to Sorrow

Chats with friends and other folks we met Down Under, along with glimpses of Australia’s national news, illuminated a lengthy list of worries in a land where “No worries” is a favorite catchphrase.

The lead TV news story one night was how Trump’s tariffs would hurt Australia’s crucial steel and aluminum exports. Arguments over how to handle him loom large in its national elections this spring.

His televised Oval Office confrontation with Ukrainian President Volodymyr Zelenskyy triggered considerable press coverage and doubts about America’s reliability: Australian “officials, politicians and diplomats woke up and watched, slack-jawed, as the spectacular theatre of the Trump-Zelenskyy confrontation played out in the Oval Office and on their screens.”

Many folks we met highlighted his erratic economic policies and statements as threats to the global economy, and more specifically to the Australian stock market and their retirement savings.

One couple understandably fretted over their daughter’s plan to visit the United States in August, even wondering whether there would be a civil war here by then.

Several individuals voiced fear about how an unstable individual with his finger on the nuclear button would manage tensions with China.

In view of Trump’s actions undermining Ukraine and his desire to make Canada the 51st state, others doubted his commitment to our equally loyal ally Australia, particularly in view of mounting Chinese economic and military pressure. (That pressure includes an unannounced, unprecedented live fire drill by Chinese warships in waters not far from Sydney and Melbourne last month, forcing dozens of commercial flight diversions.)

On our way out his door for our flight home, an outraged Aussie friend, by no means a political type, showed us a clip of Fox News host Jesse Watters somehow finding it “personally offensive” that Canadians don’t want “to be taken over by the United States of America” since “that’s what everyone else in the world wants.”

A few Aussies went as far as to share their sentiments on the state of the United States: “We feel sorry for you.”

The sorrow was certainly understandable. In fact, it was the way I sometimes felt during my international development career, when visiting societies repressed and ripped off by corrupt, autocratic regimes. Except the people in those societies typically did not vote such regimes into office.

Not Just Aussies

It wasn’t just Australians who were upset by what America is doing to itself and the world. We met others similarly alarmed. A white Zimbabwean mining executive, apparently no flaming liberal, was aghast at what Trump was doing to democracy and world order.

And then there was the diverse array of fellow travelers (so to speak) with whom we spent several days touring parts of Australia’s beautiful southeastern island of Tasmania. The thirteen participants hailed from America, Australia, Ireland, Japan, Lithuania, Russia and the United Kingdom. Except for the polite-to-the-point-of-reticence Japanese, they were troubled by Trump’s ascendance.

My wife and I hadn’t intended to indulge in so much discussion of American politics on a trip through a place about as far from America as you can get. But it kept popping up. And we couldn’t resist soliciting their thoughts.

The (anti-Putin) Russian warned that she saw the United States going down a path similar to what Russia experienced at the start of Putin’s reign. In a different chat, and despite my own confusion, I tried to explain to our new Irish friend why so much had gone so awry in our country.

The Lithuanian expressed trepidation over the fact that if Putin could get away with attacking Ukraine, her tiny nation was at great risk. She shared that right after Trump’s election Lithuanians held out hope that, just maybe, he might stand up to such potential aggression against their homeland (a NATO ally). But before long, they concluded that “He’s just an [expletive].”

If there was one comment that cut across the Aussies’ and the foreigners’ reactions to Trump’s election, it was, “How did this happen?”

Down, But Not Knuckling Under

My wife and I returned to America glad to be back home even as we knew home to be in crisis. But we also arrived to a blizzard of emails from friends and neighbors here, about matters local and national.

The local focus was the increasingly promising fight for Benicia (the small Bay Area city where we live) to enact an Industrial Safety Ordinance that would force Texas-based oil giant Valero to be more transparent and accountable regarding its Benicia refinery’s accidents and emissions. Things can change, but our City Council is barely a week away from the vote that will likely seal that deal.

The emails’ national focus comprised discussions of meetings, rallies, strategies and steps to save our freedom and survive Trump’s political onslaught. These initial signs of activism, admittedly in need of much refinement but repeated across the country, constitute seeds of hope in a bleak landscape.

Having just returned from abroad, I wish more than ever that Trump supporters in the United States could hear from folks in other nations, as a counterbalance to Jesse Watters’ jingoism. I wish they could appreciate why, halfway across the world and in many places in-between, so many foreigners fear that what’s happening in America harms not just us but them. I wish they could grasp why those foreigners so strongly back the fight against authoritarianism here.

While it’s ultimately up to Americans whether our democracy sinks or swims, we should take heart from such overseas sentiments. We’re down, but we’re not knuckling under. Our battle to save democracy is just starting.

Benicia resident and author Stephen Golub, A Promised Land

CHECK OUT STEPHEN GOLUB’S BLOG, A PROMISED LAND

…and here’s more Golub on the Benicia Independent