Attorney General Harris: Benicia Has Power to Reject Oil Facility
By Jean Tepperman, April 15, 2016
California Attorney General Kamala Harris
In a strongly-worded letter sent Thursday to City of Benicia officials, California Deputy Attorney General Scott J. Lichtig wrote that Valero, the City of Benicia’s planning staff, and an outside attorney advising the city have all incorrectly interpreted the law, and that Benicia has the duty to regulate land use, and must weigh in on a proposal to expand a controversial Valero oil facility.
As the Express reported earlier this week, Valero’s original proposal was presented in 2013 as a simple plan to build a couple of rail spurs from the main railroad line to its refinery, and the city announced its intention to approve the plan without doing an environmental impact review. A torrent of opposition greeted this announcement, however. As a result, the city was forced to conduct three environmental impact reviews and hold public hearings. Then, last February, Benicia’s planning commission unanimously reversed approval for the project. Now the oil facility is pending a final decision by the city council.
But Valero and Bradley Hogin, a contract attorney advising the city, have claimed that the federal government’s authority over railroads means that local governments are not allowed to make regulations that affect rail traffic — even indirectly. And when they’re deciding on a local project, cities are not allowed to consider the impact of anything that happens on a rail line. The legal doctrine Hogin is referring to is called federal preemption. Assuming the city is preempted from blocking it’s oil-by-rail project, Valero has asked the Benicia City Council to delay consideration of the project while it seeks an opinion from the Surface Transportation Board, the federal agency that regulates railroads.
The Attorney General’s letter sent yesterday included a simple response to this interpretation of the law: “we disagree.”
The letter from Harris’s office not only disagreed with Valero and Hogin’s legal opinions, but also stated that to the contrary, the California Environmental Quality Act (CEQA) actually requires the city to consider indirect impacts of the project.
“A failure to include all of a project’s potential environmental impacts . . . or to disregard that information in making a decision like the one regarding Valero’s [project], not only would defeat the purpose of CEQA, but would be an abuse of discretion,” Lichtig wrote.
Harris’ letter explained at some length that federal authority over railroads applies only to railroads. The Surface Transportation Board, the federal agency that regulates railroads, “preempts state or local regulation only if the activity at issue is performed by a rail carrier,” the letter said.
Because Valero is proposing to build the project on its own land — rail spurs and related equipment to connect its refinery to the main railroad line — the Surface Transportation Board has no jurisdiction, Harris concluded.
The attorney general’s letter “clearly shows that Valero’s request for a delay was a distraction, designed to delay the inevitable vote to deny this project,” commented Andres Soto of Benicians for a Safe and Healthly Community.
The city council is planning to reconsider the Valero project on April 18 and 19. Opponents expect the letter to strengthen their case that the council should immediately vote to deny project approval, rather than wait on the federal Surface Transportation Board to weigh in, as Valero has requested.
“This letter has immense implications for similar oil-train fights in San Luis Obispo and around the country, where the issue of federal preemption has been at the forefront of local permitting battles,” wrote Ethan Buckner of STAND.earth, another organization that is opposing the Valero crude-by-rail project.
Benicia Oil-by-Rail Battle Hinges on Legal Controversy
Opponents of oil-by-rail shipments want the city to block a proposed Valero facility, but Valero says the city lacks this power.
By Jean Tepperman
Andres Soto said Benicia shouldn’t wait on federal regulators to reject Valero’s oil-by-rail project. BROOKE ANDERSON
An oil-by-rail facility that Valero wants to build at its Benicia refinery has been stalled by opponents concerned about environmental impacts and safety issues for over three years now. But Valero and an attorney working on contract for the City of Benicia claim that the city cannot stop the project because federal railroad law preempts the city’s powers. Project opponents say this is a flawed interpretation of federal law, however, and that Valero’s new oil facility should be cancelled.
Valero’s original proposal was presented in 2013 as a simple plan to build a couple of rail spurs from the main railroad line to the company’s refinery, and the city announced its intention to approve the plan without doing an environmental impact review. A torrent of opposition greeted this announcement, however. As a result, the city was forced to conduct three environmental impact reviews and hold public hearings. Then, last February, Benicia’s planning commission unanimously reversed approval for the project. Now the oil facility is pending a final decision by the city council.
Supporters say the crude-by-rail project is necessary to preserve Valero’s — and Benicia’s — economic viability and the nation’s energy independence. Opponents say it will cause increased air pollution and environmental destruction, and that expanding oil-by-rail transportation increases the risk of catastrophic accidents like explosions and fires due to derailment.
But according to Bradley Hogin, a contract attorney advising the city, the federal government’s authority over railroads means that local governments are not allowed to make regulations that affect rail traffic — even indirectly. And when they’re deciding on a local project, cities are not allowed to consider the impact of anything that happens on a rail line, claims Hogin. The legal doctrine Hogin is referring to is called federal preemption.
But other attorneys call Hogin’s interpretation of federal laws “extreme” and say that the city has every right to block the project if it so chooses. Environmentalists have also pointed out that Hogin has represented oil companies against environmental and community groups in the past. Project opponents say Hogin is biased in favor of Valero, and is not giving the city accurate legal advice. When asked if Hogin’s previous work suggests that he could be biased, Benicia City Attorney Heather McLaughlin said no. “I think he has had great experience in the refinery industry and I think that’s been helpful for us,” she said.
Hogin’s legal argument that cities are preempted from influencing oil-by-rail projects has major national implications. As the shipment of crude oil via railroad has grown in recent years, so have the number of derailments, oil spills, fires, and explosions, including the 2013 explosion that killed forty-seven people in Lac Megantic, Quebec. As a result, communities across North America have demanded that local authorities stop rail shipments of crude oil through their towns. In addition to Benicia, San Luis Obispo County is currently in the midst of a battle over crude by rail.
“Hogin is making a case that would affect cities across the nation dealing with crude by rail,” said Marilyn Bardet, a founder of Benicians for a Safe and Healthy Community. “They [are trying] to create a legal precedent here.”
Many lawyers, including California Attorney General Kamala Harris, say the exact extent of federal preemption of local authority is still being worked out in the courts. In her legal opinion on the Valero project’s environmental review, Harris cited several cases in which local governments were allowed to implement health and safety regulations involving railroads.
Several lawyers submitted opinions and testified in Benicia City Council hearings held on April 4 and 5 challenging Hogin’s interpretation. And in one of the hearings, Berkeley City Council member Linda Maio told her Benicia counterparts that the city council has the right to make its own land-use decisions. “This is in your town and you’ve been elected to see to the health and safety of your citizens,” said Maio.
Valero and its critics have been arguing about the extent to which Benicia’s authority is preempted by federal law since last summer. After the planning commission rejected Valero’s project in February, the company showed up at the March city council meeting with a surprise request: that the council delay voting on the project until Valero has a chance to make an appeal to the federal Surface Transportation Board (STB), which regulates railroads.
That didn’t sound right to Benicia resident Andres Soto, who works for Communities for a Better Environment, an environmental group opposed to the project, so Soto called the STB and talked to staff attorney Gabriel Mayer. In a report Soto submitted to the city council, he wrote that Mayer told him that the STB is not the final authority on federal preemption, and that the state and federal courts serve that purpose.
Soto also said that the STB deals with disputes among railroads, and since Valero is not a railroad, it’s unlikely the agency would take its case. Many speakers at last week’s hearings urged the city council to deny Valero’s bid for a delay and reject the project immediately.
But project supporters emphasized the economic benefits of bringing crude oil by rail to Benicia. Berman Olbadia of the Western States Petroleum Association, an oil industry lobbying group, said that Valero creates jobs and generates tax revenue. Michael Wolf, of Ageion Energy Services, said that oil by rail reduces California’s dependence on foreign oil.
Later, however, Greg Karras, senior scientist at Communities for a Better Environment, said North American crude would create serious new problems that the environmental reviews for the Valero project did not address. Canadian tar sands produce very heavy oil with an extra load of toxic chemicals, said Karras. In addition, refining tar sands oil would dramatically increase the refinery’s emissions of carbon dioxide, the main pollutant causing global warming. The other major type of North American crude from North Dakota’s Bakken fields produces highly explosive oil. Trains carrying Bakken crude have been involved in a number of fires and explosions.
People from “uprail” communities have also turned out at Benicia hearings to oppose the Valero project. “The oil trains will pass through our downtown and pass my house,” said Frances Burke, a resident of Davis. “We will have the fumes and particulate matter from increased daily trains. I’m also a potential victim of a deadly accident, explosion, or derailment.”
Benicia resident Bardet said the project site is especially dangerous because the crude-oil-offloading tracks would be “adjacent to crude oil storage tanks and Sulphur Springs Creek, in a flood-plain zone and active fault zone, and also directly across from the industrial park along East Channel Road.” According to Bardet, derailment or fire involving flammable crude oil could have catastrophic results.
College student Jaime Gonzalez said the project would further proliferate fossil fuels, which accelerate climate change, and that future generations will bear more of the burden. “The consequences would fall on the shoulders of my generation,” he said.
Hearings will continue April 18 and 19 in Benicia, and the city council will then decide whether to wait for Valero’s federal appeal, or vote to approve or deny the project.
Benicia City Council on March 22, public comment – Valero’s request for a delay
Valero’s request for delay in the appeal process to acquire a declaration from STB on the scope of preemption interferes with local politics with far-reaching ramifications.
On March 15th, at the opening hearing of Valero’s appeal of the Planning Commission’s long deliberations and unanimous decisions to deny certification of the FEIR, and to deny the Crude-By-Rail Project a permit for construction, it was very clear that Valero’s attorney John Flynn surprised everybody — our City Staff, and all of you, Mayor and councilmembers, and the public — by announcing a request for an indefinite delay in the appeal process, to enable Valero to solicit an opinion from the Surface Transportation Board, an agency under the Federal Dept. of Transportation, on the scope and breadth of preemption law. What a surprise indeed, since the role of the STB is to exclusively address rail carrier companies’ concerns and controversies, not those raised by oil companies.
We can’t forget how you expressed your dismay and discomfort:
Councilmember Hughs, you’d remarked how you were “caught off guard”, showing by your words and expression the effect of Valero’s unexpected request on the whole council. Councilmember Campbell, you’d reacted with stronger language, declaring that Valero’s request felt like “a threat.”
You’d each asked Mr. Flynn why Valero had waited so long to petition the STB, especially if the STB’s opinion were considered crucial to public discussion of Valero’s project. Afterall, our City Staff, ESA consultants, or Valero’s attorneys, could have solicited the STB two years ago when the Draft EIR was being developed. Letters submitted to the City by Valero’s attorneys, Mr Flynn and Mr. Walsh, were included in the Revised DEIR’s Appendix H. Those letters made explicit their case that Preemption renders the requirements of CEQA, the California Environmental Quality Act, largely irrelevant with regard to any significant direct or indirect impacts cited in the DEIR that would be associated to Project-related rail operations. Valero has repeatedly made this case over the last three years.
So, why do they appear to express such doubt in their own legal opinions now?
Whatever reply the STB might deliver to Valero at any future point in time would not stand to legally resolve the controversy over preemption’s authority, nor ipso facto neutralize requirements of CEQA, which call for thorough discussion of significant impacts of a project, for feasible and effective mitigations plans that would reduce or eliminate those impacts, and also, very importantly, for feasible alternatives to the Project. It’s worth remembering that the FEIR declared that the Environmentally Superior Project would be the “No Project Alternative.”
We must ask: why is soliciting STB for an opinion so necessary to “everyone” right now, as Valero’s attorney asserted?
When questioned, Mr. Flynn admitted that it could take one month for their office — presumably with green light from corporate, in San Antonio — to prepare and file their official request to the STB, and that it could take anywhere from 3 – 6 months to receive a reply, with no guarantee that one would be forthcoming even then. Presumably, Valero would be summarizing, on their own terms to STB, the views of legal experts who have testified against the broad view of preemption that Valero stands by.
In the wake of their unwelcomed request for delay, general confusion has been sown for our City Staff, this council, and our community at large and for all those communities “uprail.”However, huge political stakes have been put into play by Valero’s delay maneuver. There are many questions raised by their request, and far-reaching local and statewide political ramifications, should you approve a delay.
We know that the controversy swirling around preemption is relevant to the decisions to be made in other cities and regions in California and across the US faced with proposed crude-by-rail projects, including in San Luis Obispo County.
Most important to our City and our community:
It appears that Valero is willingly going out on a limb to interject their interests into local politics for the upcoming campaign season, and to reach beyond it.
Do you feel the set up?
Valero’s delay appears to aim to suspend or neutralize further discussion of the Project in the political arena, based on a dubious need to hear from STB, thus to focus almost exclusive attention on Preemption while avoiding discussion of local impacts under land use jurisdiction of the City of Benicia.
So let’s take stock of where we stand right now.
The City retains authority under CEQA over the land use decision governing the siting of the Project on Valero’s private property and the significant impacts that can be fairly anticipated associated to its proposed location.
Our City Attorney and Mr. Hogin are obligated to advise council on your options with regard to Valero’s request for delay. Your mandate is to preserve the independent and legitimate authority of our City on issues of land use, and thereby you must aim to preserve the welfare and wellbeing of our community.
In my view, and that of many others, you must proceed to a fair and objective determination on the most momentous and critical land use issue in decades to come before our planning commission and now this council. (Some say since WWII !)
We hope you will make a wise decision on April 4th and reject Valero’s bid for delay, with respect for public involvement and continuing public hearings on their appeal.
Thank you for your attention. — Marilyn Bardet, Benicia
Valero’s delay request – what will happen on April 4?
As of this writing, there is much confusion over Valero’s March 15 request at City Council to delay consideration of their appeal of the Planning Commission’s unanimous rejection of their Crude by Rail proposal.
Earlier today, several independent inquiries were sent to City staff asking what will happen next. City Attorney Heather McLaughlin responded to all in a single email, in which she attempted to give some direction to the public. Her answers left much still to be determined. We may learn more later, as she wrote, “Staff will be preparing a staff report for the April 4 [City Council] meeting. We hope to publish it by close of business on March 28.” [Staff reports and Council packets can be found on the City’s City Council page.]
McLaughlin listed questions and gave her answers in bold, below:
Could you please tell me if the City’s code describes the situation of a request for a delay of an appeal by an appellant contesting planning commission decisions made under a CEQA review of a project? If so, what are the rules governing such a request? If there are no rules that address such a request, what authority does the council have to either approve or ignore Valero’s request for delay in a hearing process? Section 1.44.040 (F) of the Benicia Municipal Code allows the City and the appellant to agree to extend the time for hearing an appeal. The City’s agreement would have to be made at a public meeting if the appeal, like here, is to a person or body that holds regular meetings. Regular meeting rules would apply like public comment before taking action.
Would Valero’s request for delay constitute an action under the purview of CEQA, since the CBR Project is still under CEQA review via Valero’s appeal at this point? No CEQA review would be required for delaying the project.
If the City Council agrees to Valero’s requested delay, would this mean that the public hearings and all submissions/comments under CEQA would be continued into the indefinite future until such time as Valero receives whatever word on preemption from the Surface Transportation Board? This decision would be up to the Council. Staff does not have a recommendation at this time.
Would information from the STB on preemption be considered “new information”, and if so, would that response from STB have to be incorporated in a revised FEIR under CEQA? Depending on what an STB decision might say, the City may or may not decide to revise the FEIR. The City Council will make this decision after considering any STB decision.
If the Council continues the hearings and takes public testimony on previously scheduled days (April 4th, 6th, 19th), would future hearings be held after Valero receives info from the STB? In other words, how would the public be informed of new information rec’d, (if any)? The City Council will have to take any future action on the project at one or more noticed meetings. There will be opportunity for public comment until the public hearing is closed.
Will the City Council hold two public hearings on the project to receive public comments – one regarding Valero’s request for a continuance and another on the project? The City Council will determine the process. Staff does not have a recommendation at this point.
Will the City Council first consider Valero’s request to delay the appeal before the public hearing on the appeal begins? Please see the answer to 6RK above.
Will the public have the opportunity to comment on Valero’s request for delay of the appeal? Yes. Public comment will be allowed before the Council decides.
If the request to delay the appeal is granted, will the scheduled public hearing on the appeal be cancelled? Please see response 3MB above.
If the request to delay the appeal is denied, will the public hearing then proceed as scheduled? Yes.
My summary: Every time the City Attorney says Council will decide and staff has no recommendation at this time, it means staff will probably confer (with Council members?) and make a more or less decisive staff recommendation, which the public will not know until March 28. This applies to questions 3, 4, 5, 6, 7, and 9. So – my opinion – there’s not much information here.
What we DO learn, without much surprise, is that:
Question 1: The City attorney upholds Valero’s right under city code to request a delay. See item F: “The time limits in this section may be extended if the applicant(s) and appellant(s) agree.”
Question 2: The City attorney holds that “no CEQA review would be required for delaying the project.” It might be good to get a CEQA expert’s opinion.
Question 8: Public comment will be allowed on the delay.
Question 10: If the delay is denied, hearings on the appeal will proceed as planned.
SO … It seems clear that significant important decisions will be made at the City Council hearing on April 4. Plan to attend – our Council members need to know how we feel about health and safety here in Benicia. You can RSVP on Eventbrite or on Facebook.
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