Tag Archives: Valero Benicia Refinery

Contaminated Oil That No One Wants Is Heading to Asia: California allows rare export exemption

Repost from Bloomberg Business News
[Editor:  A local resident observed that the photo below was taken at the docks here in Benicia, California — home of Valero Benicia Refinery.  The Bloomberg story says that the contaminated oil originated with Chevron and was stored at Plains All American in Martinez.  But maybe there’s more to the story?  Maybe Valero was an additional source or storage facility for the ship’s contents?  My source says that the tanker Hellespont Protector has been seen about twice over the last few months, and is a new one around here. (Background on current efforts of the oil industry to overturn the 1975 U.S. crude-export ban.)  – RS]

Contaminated Oil That No One Wants Is Heading to Asia

By Lynn Doan and Dan Murtaugh, April 26, 2015 4:00 PM PDT
Hellespont Protector
Oil tanker Hellespont Protector, said to be chartered to export California oil, was anchored in the San Francisco Bay on April 20, 2015. Photographer: Lynn Doan/Bloomberg

One million barrels of oil. Enough to fill more than 60 Olympic-sized swimming pools. And there it sat in tanks outside San Francisco — for three years — despite crude prices that topped $100 a barrel.

This isn’t the prized “light, sweet” kind of crude that is pumped out of the ground in Texas, or even the thick, sticky stuff from Alberta’s tar sands. Rather, it’s what’s known as “orphaned oil” that is so contaminated with organic chlorides that it can corrode the insides of even the biggest refineries.

Now, it’s on the move — and guessing exactly where is turning into a sort of parlor game for some in the oil market. All that is known is that Chevron Corp., which flushed the oil from a pipeline in September 2012 and has seen its value drop by $50 million since then, is loading it onto two tankers bound for Asia.

“It’s really kind of a bizarre incident,” said Gordon Schremp, a senior fuels specialist at the California Energy Commission who was notified by industry representatives of the planned exports.

It’s a rare shipment, considering most crude is barred from leaving U.S. borders. It just so happens that an exemption has been in place since 1992 allowing limited amounts of California oil to leave the country.

Export Exemption

The only reason exports don’t happen very often is because California’s refiners keep almost all the state’s oil for themselves.

The saga began on Sept. 17, 2012, when Chevron told shippers that its pipeline delivering California crude to San Francisco-area refiners was contaminated. Chevron ended up pushing an estimated 1 million barrels through the pipe to get rid of the chlorides.

And so the tainted oil sat in tanks at a Plains All American Pipeline LP terminal in Martinez until this month, when all the red tape, including getting an export license from the Commerce Department, was finally cut, Schremp said.

When the contamination was discovered, heavy crude from California’s San Joaquin Valley cost $97 a barrel. It’s now $46. The difference, multiplied by 1 million barrels, is more than $50 million. And that’s not counting the cost of storing the oil for more than two years, which could add millions more.

In Limbo

West Texas Intermediate futures, the benchmark for U.S. crude, rose 9 cents to $57.24 a barrel at 11:53 a.m. local time on the New York Mercantile Exchange. Prices dropped about 44 percent in the past year.

Kent Robertson, a spokesman for Chevron, declined to comment on the exports. Brad Leone and Meredith Hartley, spokesmen for Plains, didn’t respond to requests for comment.

Oil tanker Hellespont Protector, one of the two vessels chartered to carry the crude, was anchored in the San Francisco Bay on Friday, shipping data compiled by Bloomberg show. The other, Energy Champion, is headed for Qingdao, China, a place with no refineries. It may be a stopover, or it may not be headed to a refinery at all.

Schremp, who wasn’t told where the outcast barrels are headed, said they could be used as fuel for large ships or burned in a power plant.

If refiners know about the contamination ahead of time, they can blend in additives as a cure, but it’s an expensive solution that erodes the value of the crude, said David Hackett, president of energy consultant Stillwell Associates LLC in Irvine, California.

Wherever it lands, chances are it’ll be the first and last California oil that Asia sees for a while. California crude prices have been getting stronger and refiners across the Pacific have been flooded with supplies from much closer by.

Asked whether the rare cargoes are a bellwether for future exports of California oil, Schremp said, “It’s not like it makes perfect economic sense to move barrels that way into the world market — this was an export of circumstance.”

Yes, they are “Bomb Trains.” Even more importantly, they are “Global Destruction Trains”

Our Earth Day refocus on the larger issues

By Roger Straw, Editor, The Benicia Independent, April 22, 2015
tarsands_wis-sierra-club
This Sierra Club before-and-after photo of tar sands strip mining appeared with my 6/14/13 opinion in the Benicia Herald, “Do Benicians want tar-sands oil brought here?” – Roger Straw

My initial alarm over Valero’s proposal to build a crude-by-rail offloading facility here in my hometown came almost two years ago now, when I learned of the destruction in Alberta Canada caused by the mining and processing of tar sands.   It was plain to me that a decision to permit Valero Crude By Rail here, thousands of miles from those dirty bitumen mines, would position my hometown as a valued partner in the world’s most toxic oil extraction and transport operation.  I joined with others here in Benicia to organize so that we would have no part in that dirty game.

Lac-Mégantic, Quebec
Lac-Mégantic, Quebec

For me and for many along the rails in the U.S., our focus shifted gradually – or in some cases suddenly – to public safety issues surrounding Bakken shale oil train derailments and the resultant catastrophic explosions and fireballs.

Lately, I’m thinking that even though these safety concerns will not go away with the eventual passage of a few new laws and long-delayed safety regulations, we all might want to consider renewing and strengthening our original focus.

What we decide here along the tracks and in refinery towns has EVERYTHING to do with the situation in Alberta and the Upper Midwest where tar sands bitumen and shale oil is being produced.  People there, the land there, the wildlife, the air and water … these are the first and lasting victims of our thirst for cheap oil.

We hear so much about the oil boom’s contribution to “energy independence.”   Well, let’s focus on REAL energy independence: leave the oil in the ground, tax carbon, invest in clean energy.

The Benicia Independent has always been concerned with climate change, the air we breathe and the water and land that sustains life.  But our focus, like that of much of the media, has been primarily on the oil train derailments that have understandably shocked and frightened the public since July, 2013.  As editor and publisher, I’m serving notice this Earth Day, that the Benicia Independent is taking on a renewed commitment to cover the ongoing environmental damage and the increased risks of pollution if we permit oil trains.

You will begin to see more stories about proposed carbon taxes, polar ice, the destruction of land and lives in Alberta and the Upper Midwest and more.

Note that I fully expect my work to be dominated from time to time by the NEXT BIG EXPLOSION, and the NEXT ONE….  As long as oil trains rumble through our neighborhoods, city centers, mountains and wetlands and into our refinery industrial centers, we WILL see derailments.  And no matter the new federal safety rules and the efforts of the rail and oil industries, NOTHING can prevent the massive weight of a moving chain of these monstrous tank cars from coming off the tracks occasionally, accordion jackknifing, flipping and puncturing, setting off horrific explosions, and endangering human life and our natural world.  It will happen, and I will cover the news.

But for every day that you DON’T see a news report with fiery skies and black billowing smoke, please understand that the not-so-silent killer strip-mines and the fracking and horizontal drilling continue, too often unreported.  Far from most of us, but up close and real to the people who live there, our earth is groaning under the weight of our permitting decisions and our corporate desire for continued crude-oil profitability.

Here in Benicia, we will say NO to crude by rail.  It’s a tangible way to have a small say in the welfare of our town, our state, our nation and our beautiful planet earth.

Leave the oil in the ground.  Tax carbon.  Invest in clean energy.


MORE ON TAR SANDS …

Sightline Daily

Understanding the North American Tar Sands
Jan 14, 2015 Last year, Portland’s KBOO Community Radio profiled what is “the largest industrial project on Earth”: the North American tar sands. Typically, one hears of the “Canadian tar sands,” as if the issue is one that lives only north of the US national border and need not concern American citizens. But reporter Barbara Bernstein’s documentary, “Fighting Goliath,” revealed an alarming and very real threat…

Oil Change International

Tar Sands
Tar sands are found underneath Canada’s great boreal forest and consist of heavy crude oil trapped in a mixture of sand and clay. To extract oil from tar sands, companies must destroy fragile forest ecosystems and then use a very energy-intensive upgrading and refining process to turn that sludge into transportation fuel….

Natural Resources Defense Council

Stop Dirty Fuels : Tar Sands
In Canada, the oil industry is transforming one of the world’s last remaining intact ecosystems into America’s gas tank….

Forest Ethics

Canada’s tar sands is one of the largest industrial projects on the planet, and its environmental footprint is growing by the second. At a time when the world needs to transition to cleaner energy, the tar sands is the poster child of what we should not be doing. It’s time to put a healthy environment above corporate profit and the endless drive for more oil….

[More Google links on tar sands …]

Tar Sands Basics

ostseis.anl.gov/guide/tarsands/
Argonne National Laboratory
Tar sands (also referred to as oil sands) are a combination of clay,
sand, water, and bitumen, a heavy black viscous oil. Tar sands can
be mined and processed to extract the oil-rich bitumen, which is
then refined into oil.

Oil sands – Wikipedia, the free encyclopedia

en.wikipedia.org/wiki/Oil_sands
Oil sand is either loose sand or partially consolidated sandstone
containing a naturally occurring mixture of sand, clay, and water,
saturated with a dense and extremely viscous form of petroleum
technically referred to as bitumen  (or colloquially tar due to its
similar appearance, odour, and colour).

Stop Dirty Fuels: Tar Sands

www.nrdc.org/…/dirtyfuels_tar.asp

Extracting tar sands, and turning bitumen into crude oil, uses vast amounts of energy and water, and causes significant air and water pollution, and three times …

What are the Tar Sands? | Rainforest Action Network

www.ran.org/what-are-tarsands
Rainforest Action Network
The Keystone XL pipeline is a disastrous project of tar sands oil
companies that will do serious damage to our country and
climate.  If built, the spill prone …

Canada’s oil sands: The steam from below | The Economist

www.economist.com/…/21615488-new-technologies-are-…
The Economist
Sep 6, 2014 – ONE of the bleakest scenes of man-made
destruction is the strip mining of oil sands in the forests of
Alberta, Canada. The sand is permeated …

Tar sands – Friends of the Earth

www.foe.org/projects/climate-and-energy/tarsands

Tar sands are found underneath Canada’s great boreal forest and consist of heavy crude oil trapped in a mixture of sand and clay. To extract oil from tar sands, …

Canada’s tar sands: Muck and brass | The Economist

www.economist.com/node/17959688‎ – The Economist

But golf courses and suburban housing make the place liveable, and some locals have grown attached to Alberta’s tar sands and Fort McMurray, the town at the centre of them. “I’d like …

Unconventional Crude – The New Yorker

www.newyorker.com/magazine/…/unconventional-crud…‎ – The New Yorker

The tar sands begin near the border of Saskatchewan, around the latitude of Edmonton, and extend, in three major deposits, north and west almost to British Columbia. All in all, they …

How Much Will Tar Sands Oil Add to Global Warming?

www.scientificamerican.com/…/tarsands-and-keyston…‎  – Scientific American

The Opposite of Mining: Tar Sands Steam Extraction Lessens Footprint, but Environmental Costs Remain · Oil Sands Raise Levels of Cancer-Causing Compounds in Regional Waters.

What are Oil Sands? – Canadian Association of Petroleum …

www.capp.ca/…oil…/oilsa

Canadian Association of Petroleum Producers

Oil sands are a mixture of sand, water, clay and bitumen. They are found in several locations around the globe including Venezuela, USA, Russia and Canada.

No Tar Sands | UK Tar Sands Network | What are tar sands?

www.no-tarsands.org/what-are-the-tarsands/

Canada’s tar sands are the biggest energy project in the world,
currently producing 1.9 million barrels of oil a day. Largely located
in Alberta, the tar sands …

Solano County study addresses rail plans, including crude-by-rail

Repost from The Fairfield Daily Republic
[Editor:  Download the 152-page Update from the STA website.  Although this article doesn’t mention it, significant attention is paid to crude by rail in the Update: see p. 8 on the Benicia-Martinez Railroad Bridge, p. 15 on the Valero Refinery, pp. 27-29 on Future Demand (including crude-by-rail), pp. 91-93 on Potential Projects, and   See also p. 130 on Positive Train Control and a reference on p. 131 to a possible “Benicia Narrows high-level rail crossing bypassing downtown Benicia.”  (Note PDF page numbering is 4 more than doc page numbers)  – RS]

Solano Rail Facilities Plan Update available for review

By Kevin W. Green, 4/18/15

SUISUN CITY — A draft Solano Rail Facilities Plan Update has been released for public review.

The governing board of the Solano Transportation Authority released the study this week for a 30-day period public comment.

The board last year approved developing an update to the rail plan, which was originally adopted in 1995. The board wanted to update priorities for rail stations and future service and rail freight priorities, according to a staff report.

In addition to focusing on passenger rail facilities along the main Union Pacific rail lines, it also addresses passenger rail potential in the Vallejo area and freight rail throughout Solano County, staff said in the report.

The four daily long-distance Amtrak services that connect the Bay Area with destinations to the north, south and east do not serve Solano communities directly, according to the study. As one of the largest service areas by population on those routes without a station stop, Solano should consider advocating a stop at the Suisun City or Fairfield-Vacaville stations, the study said.

Passenger travel from the Suisun City station on the Capitol Corridor, meanwhile, is about evenly split – with passengers heading east nearly equal to those going west, consultant David McCrossan said in presenting the plan update to the Solano Transportation Authority’s board.

The study includes anticipated growth in passenger rail service. Ridership growth of 10 percent to 20 percent is expected in the next 10 years, it said.

The opening of the new Fairfield-Vacaville station will likely add up to 15 percent to the total ridership within the county, the study indicated. Although the new station may initially share some of the catchment of the current Suisun City station, growing mixed-use development in the immediate vicinity of both stations will lift ridership levels overall beyond their current totals at each location, the study said.

The plan outlines various projects slated within the next 10 years. Included are station improvements, local station connections, passenger service levels, accommodating growing ridership, infrastructure safety enhancements and rail infrastructure capacity.

The infrastructure enhancements include crossing improvements at East Tabor Avenue in Fairfield, First Street in Dixon, Canon Road in Fairfield, Fry Road in Vacaville, A Street in Dixon and Midway Road in Solano County.

For more information about the rail plan update, contact the Solano Transportation Authority at 424-6075.

Vallejo Times-Herald: Thompson introduces act addressing crude by rail

Repost from The Vallejo Times-Herald
[Editor:  See also coverage in McClatchyDC News.  – RS]

Thompson introduces act addressing crude by rail

By Irma Widjojo, 04/15/15, 8:06 PM PDT

Another bill concerning the transportation of crude oil by rail was introduced Wednesday, following at least two others in the past month. With a pending Valero Refinery crude-by-rail project in the works, concerned Benicians and activists said though they acknowledge the effort in the bill, they’d like to see more.

U.S. Rep. Mike Thompson, D-St. Helena, coauthored the Crude-By-Rail Safety Act, which would “establish new, common sense federal safety standards for railcars transporting oil across the country,” according to a release from Thompson’s office.

The act would take on a number of factors, including maximum volatility standard for crude oil transported by rail, higher fines for violating volatility standards and hazmat transport standards. The act will also seek to remove 37,700 unsafe cars off the rail network and recommend other measures to increase the safety of crude by rail.

“Public safety is priority No. 1 when it comes to transporting highly volatile crude oil,” Thompson said in the release.

There have been four derailments of trains carrying crude oil in the United States and Canada in under a month earlier this year — in Illinois, West Virginia and twice in Ontario.

Thompson said he has been working on the Crude-By-Rail Safety Act for about a year. The proposed legislation was also authored by Reps. Doris Matsui, D-Sacramento, Ron Kind, D-Wis., and Jim McDermott, D-Wash., and Nita Lowey, D-NY.

“Folks in the district had concerns,” he said. “Explosions have people worried.”

The bill will still have to go through its due process before it could get signed into law, and that could take some time.

Activists said these procedures won’t come in time before another possible disaster strikes.

Marilyn Bardet, a Benicia resident and environmental activist, said that even if the policy was put in place, it wouldn’t be done before the pending Valero’s Crude-by-Rail project is underway.

“That is a huge concern,” Bardet said. “Valero talks about their safety record, but they are talking about the safety of the refinery. This is really the project of the railroad.”

Benicia is currently processing the use permit and Environmental Impact Report (EIR) for the project. The Recirculated Draft EIR is anticipated to be released for public comment June 30. It will have a 45-day comment period. After the comment period closes, the city will complete the final version, which will include responses to all comments.

Bardet said she’s glad to see an effort from congress to address the Department of Transportation and the issue, but said from her initial perusing of the act she found that there were missing components to it.

A few of her concerns that are not mentioned in the proposed act are speed reduction, plans on dealing with explosions and derailment in remote areas and the safety of bridges.

“There are derailments on a regular basis, and historically they have not been shipping oil in hundreds and hundreds of (train) cars across the country,” Bardet said. “They are doing this at the risk of people’s safety and the environment.”

A spokesman for Benicians for a Safe and Healthy Community, an advocate group against the crude-by-rail project, agreed with Bardet’s sentiment.

“In general we’re glad to see our federal representatives are paying attention to the critical issue that impact communities around the country,” Andrés Soto said.

However, Soto is doubting the passage of the bill.

“I think that there’s going to be a major challenge to get this legislation passed,” he said, adding that he would like to see more transparency from the refineries and railroad companies.

Thompson said he doesn’t know if he’s going to be met with pushbacks on the proposed bill.

“I’m trying to do what’s right, and not what’s easy,” he said.

Soto said the only way to ensure the community’s safety before a policy is set is by having a national moratorium on the transportation of these crude oils, especially of more volatile kinds like Bakken shale oil.

Benicia Mayor Elizabeth Patterson, an outspoken advocate of rail safety, calls the bill “a good start” and is “a comprehensive way to address rail safety.”

Speaking in a general context of the issue, Patterson said she is glad to see that “the dots have been connected between the issue of volatility of some of the products and transportation.”

She shared some of the few questions that the activists had, including waiting for a set of standards.

“What’s the rush?” Patterson said. “Why not take some time out and get our house in order in terms of federal regulations, and the response to accidents?”

She also said she would like to see funding in place for the response to accidents and training for local governments and public safety personnel.

“The response equipment doesn’t exist in most routes,” Patterson said. “The funding needs to be there.”

Paterson acknowledged that the bill is still in its early stages.

“I imagine there would be a lot of comments,” she said. “It’s a good first start, I wouldn’t want to see anything less. It shows that (Thompson) has been listening to the public, and he’s responded.”

To read the proposed act, visit mcdermott.house.gov/images/pdf/crudebyrailsafetyct.pdf.

A similar senate bill was also introduced last month by Sens. Maria Cantwell, D-Wash., Patty Murray, D-Wash., Tammy Baldwin, D-Wisc., and Dianne Feinstein, D-Calif.

U.S. Rep. John Garamendi, D-Solano, also authored a legislation, H.R. 1679, in March, which would prohibit the transport of crude-by-rail unless authorities have reduced the volatile gases in the oil prior to transportation.