Tag Archives: Valero

KCBS Radio report on Valero meeting

Repost from KCBS Radio 740AM, 106.9FM

Valero Confirms Plans For Crude Oil By Rail At Benicia Community Meeting

March 25, 2014 1:14 PM
Refinery at Sunrise

The Valero refinery in Benicia. (James Irwin/CBS)

BENICIA (KCBS) – On the day a Bay Area state senator was voicing concerns over the transport of crude oil by rail, the Valero refinery in Benicia has announced at a community meeting it wants to do just that.

There was standing room only where about 200 people showed up for the meeting on Monday night at the Ironworkers Union Local 378 hall to hear Valero outline its crude-by-rail project.

[Audio with interview of Jan Cox-Golovich and others.]

Many who attended were skeptical of the plan which critics claim will result with two trains a day made up of 50 tanker cars each.

“It’s been proven that Bakken crude is a lot lighter and it’s very volatile and there’s been explosions and derailments and spills,” Jan Cox Golovich, a member of Benicians for a Safe and Healthy Community.

But another attendee, Frank Sykes, said that using railcars would avoid a Cosco Busan or Exxon Valdez accident and that it would bring hundreds of jobs.

“I believe in Murphy’s Law—if it can happen, it will happen—but can’t live your life like that because nothing will ever get done,” he said. “If something was to happen out in the water ways, there’s a lot more damage that could be done.”

Environmentalists, however, point out that many rails lines traverse along the state’s rivers.

The meeting was peaceful but it was clear Valero has a long way to go to placate community members. Valero spokesman Chris Howe said the company understands there is opposition but said everyone will get a chance to weigh in.

“The environmental impact report is due out in the early part of next month, we’re expecting; the city will have a comment period,” he said

“It’s clear that the opponents of our project have a view; we scheduled this meeting tonight to bring some credentials experts.”

Vallejo Times-Herald covers Valero meeting

Repost from The Vallejo Times-Herald

Valero addresses Benicia concerns about crude-by-rail project

By Irma Widjojo/Times-Herald staff writer
Published By Times Herald, 03/25/2014

BENICIA – For the first time the public attended an informational meeting Monday about Valero Benicia Refinery’s proposed crude-by-rail infrastructure improvement project.

About 150 people packed the Ironworkers Union Local 378 hall to have questions answered about the controversial project. The meeting was hosted by the Valero’s Community Advisory Panel.

The project was unveiled early last year, but has been delayed pending city’s environmental impact report.

The project seeks to add three rail tracks and an off-loading track on Valero’s property to allow crude oil to be transported into the refinery. Currently, crude oil is delivered into Valero Benicia through pipeline and ships.

During the meeting, officials presented the project to the audience and answered submitted questions.

Many residents have expressed rail-safety and environmental concerns about the project. Company officials contend that the railroad traffic — up to 100 tank cars per day — would not affect the region’s air quality, and safety standards would be met.

Officials also said that the railroad addition would make the refinery more competitive by allowing it to process more discounted North American crude oil.

“It would not increase crude delivery, just make it more flexible,” John Hill, vice president and general manager of the refinery, told the crowd.

Another point of contention was the type of crude oil that would be transported into Benicia by rail.

An opposition group, Benicians for a Safe and Healthy Community, said the project will allow the delivery of the highly flammable Bakken crude from North Dakota. Concerns also have been raised about the possible use of Canadian tar sands oil, regarded as more polluting than other crudes.

However, officials said there will be no change in the delivered type of crude. They said the refinery can, and will be able to, handle any blend of crude oil as long as it meets density and sulfur requirements for its facility. They did not disqualify Bakken crude as a possible part of a blend.

The California Environmental Quality Act review finds there are a few factors that need mitigation to eliminate impacts, according to the presentation. For example dirt control during construction, avoiding construction during nesting season, storm management plans, and prohibition of crude rail crossing during lunch hour and peak hours.

The city’s draft environmental impact report is due to be released to the public next month. Following that, Valero will invite the public to another meeting.

Monday’s informational meeting left a few people unsatisfied.

Diana Walsh, a Benicia resident since 1998, said she came to the session, “hoping to be reassured.”

However, she said she didn’t find any new information.

“I’m very afraid (of the project),” Walsh said. “All we need is a tiny explosion. … I don’t want to live near that.”

“I wanted to feel relieved. But I think they were dismissing, or minimizing our concerns,” she added.

Jan Cox Golovich, of Benicians for a Safe and Healthy Community, said she was hoping the company would “acknowledge that there are things up in the air.”

The group has launched a website, SafeBenicia.org, and organized events to voice concerns over the project.

Like Walsh, Cox Golovich said the officials did not answer questions to her satisfaction.

“They’re just pushing through the project,” she said. “Have some respect for the community.”

Whatever their sentiment might be, many said they are looking forward to participating in the next meeting after the release of the report draft.

For more information on the project, contact Valero at 707-654-9745, or info@beniciaCBR.com.

Crude Oil: Follow the Money

Repost from The New York Times Business/Energy

Conflict in Oil Industry, Awash in Crude


caption="Workers drilling for oil outside Watford City, N.D. New production techniques have created a glut of crude oil in the United States." data-mediaviewer-credit="Andrew Burton/Getty Images" />Workers drilling for oil outside Watford City, N.D. New production techniques have created a glut of crude oil in the United States. Andrew Burton/Getty Images
caption=”Workers drilling for oil outside Watford City, N.D. New production techniques have created a glut of crude oil in the United States.” data-mediaviewer-credit=”Andrew Burton/Getty Images” />Workers drilling for oil outside Watford City, N.D. New production techniques have created a glut of crude oil in the United States. Andrew Burton/Getty Images

HOUSTON — T. Boone Pickens has personified the nation’s oil industry for more than a generation. So when he made an offhand comment at a conference here a few weeks ago expressing reservations about lifting the nation’s ban on exports of crude oil, he startled some of his old allies in the business.


Scott Sheffield, chief executive of Pioneer Natural Resources and one of the top oil executives in the state, picked up the phone to have a chat. “We had lunch and he made sense,” said Mr. Pickens, who has since revised his position.


Chalk one up for the oil producers, who have begun lobbying the Obama administration, Congress and the public to let them export the bounty of crude oil flowing out of new shale fields across the country.


Opposing them are their erstwhile cousins, the independent refiners, who insist that they need abundant, economical domestic supplies of oil so they can compete with foreign refiners.


It is a rare clash in a deeply guarded industry that involves arguments over national security, pricing at the pump and, after all is said and done, who will get a bigger share of earnings from the current drilling rush.


“What we have here is a food fight for the profits that will come either from exports of crude oil or exports of refined products,” said Amy Myers Jaffe, executive director of energy and sustainability at the University of California, Davis, who testified before Congress recently in favor of lifting the ban. “It’s like an argument inside a family business but one that could result in huge market distortions that can either hurt the consumer or our national security.”


Producers like Mr. Sheffield warn that a mounting glut of certain grades of oil in some regions of the country will eventually force a halt to unprofitable drilling if exports are not allowed.


“Nobody wants the collapse of the oil industry,” Mr. Sheffield said in an interview. “You would be importing crude oil from the Middle East all over again.”


On the other side of the debate are some of the nation’s biggest refiners, who argue against unlimited exports of crude oil even as they export increasing amounts of refined products like diesel and gasoline. To their way of thinking, the oil producers are merely trying to increase their profits at the expense of American consumers.


“They are seeking the highest price available,” Bill Day, a vice president at the Valero Energy Corporation, a large independent refiner, said of the producers. “If anything, unlimited exports would raise the price of American crude to the international level, which is why the producers want this step to begin with.”


The debate began in earnest two months ago when Energy Secretary Ernest Moniz suggested at a New York energy conference that it might be time for the country to reconsider the export ban that was instituted in the 1970s, when OPEC oil embargoes threatened the American economy. Congress at the time made oil exports illegal except for some shipments to Canada. The ban on exports of Alaskan North Slope crude was lifted in 1996.


The topic has renewed interest thanks to the oil industry’s reversal of fortunes in recent years. Only seven years ago the country’s domestic oil production appeared to be in a downward spiral. But with the advent of new extraction techniques, entire new fields were opened, replacing oil imports from unfriendly or unruly places like Venezuela and Nigeria.


Suddenly parts of the Midwest and Gulf of Mexico regions are overflowing with superior grades of crude, leading to a slump in prices and a gap of as much as $10 between American oil benchmark prices and the dominant world Brent price.


Even under current restrictions, crude exports are growing quickly. Shipments to Canada have already roughly tripled since 2012 to around 200,000 barrels a day. Some analysts say they think that figure will double by the end of the year.


While the entire oil industry has profited from all the domestic production, which has increased by about 60 percent to eight million barrels a day since 2005, refiners have particularly benefited. American refiners became darlings of Wall Street by buying cheaper domestic crude and now export 3.4 million barrels a day of gasoline, diesel and other refined products, mostly to Latin America and Europe.


Not surprisingly, both the producers and the refiners say they are on the side of consumers and national security, and each side has academic and consultancy reports to back up its position.


The producers argue that if they could freely export, they would increase world oil supplies, forcing down the international Brent benchmark crude price, which in turn would reduce the price of gasoline at the pump. “The American consumer is held captive by the restrained market,” said Jack Ekstrom, a vice president at the Whiting Petroleum Corporation, a major producer in the North Dakota Bakken shale field. “When you have additional supplies coming on to market, the price naturally comes down.”


Executives at the refineries, which struggled for decades, counter that adding another million barrels of United States oil of daily supply to a global market of 90 million barrels a day will make little difference. Instead, they say, domestic crude prices will climb higher and with them gasoline prices.


“The export ban works,” Graeme Burnett, chairman of Monroe Energy, which operates Delta Air Lines’ refinery in Trainer, Pa., told a Senate Energy Committee hearing last month. “We still have a long way to go to protect against oil market volatility and achieve true energy independence.”


Refinery executives concede that they cannot argue against free trade when they are exporting products themselves. Michael C. Jennings, chief executive of the HollyFrontier Corporation, said in an interview that he could support ending the oil export ban as long as other regulations that he said penalize the refiners, including federal mandates for the refining of expensive biofuels, were also reformed.


Such sweeping energy reforms are not likely to be enacted by Congress soon. But in their talks with Commerce Department officials and members of Congress, refiners and producers appear to be closing in on some short-term compromises.


Some executives have suggested that Commerce Department officials could approve swaps of lighter American crudes to Mexico for their heavier sour crudes without violating current oil export regulations. That would give the producers another market and give refiners more oil to process.


There appears to be growing support for recharacterizing condensates, the hydrocarbon liquids used for petrochemical production, from crude to natural gas liquids, so they might be exported under current regulations. That would ease gluts in Rocky Mountain and South Texas fields where drilling has already slowed.


And perhaps more oil could be sent to countries with free trade agreements with the United States.


Such compromises, some executives say, could look something like the arrangements for export of liquefied natural gas from the United States. While gas producers supported exports and some chemical companies opposed them, the Obama administration responded by approving export terminals slowly to gauge the impact on domestic energy prices in the future.


“The middle ground could probably be accomplished without any additional legislation,” said Stephen H. Brown, a vice president for federal government affairs at the Tesoro Corporation, a major Texas refiner, “and I think that is what this administration is probably hoping for.”


Such actions by the Commerce Department, Mr. Sheffield said, could be a “relief valve that would push off the problem for another two years.”


But after that, he and other executives said, the country will probably again face a glut of high-quality crudes if current production trends continue.


A version of this article appears in print on February 13, 2014, on page B1 of the New York edition with the headline: Conflict in Oil Industry