Attorney general letter disagrees with Valero, Benicia city staff
By Irma Widjojo, 04/15/16, 5:43 PM PDT
Benicia >> The Office of Attorney General Kamala Harris has sent a strongly worded letter to the City of Benicia regarding Valero Benicia Refinery’s proposed crude by rail project.
In the letter, dated Thursday, Harris’ office disagrees with the city staff and Valero’s conclusion that Interstate Commerce Commission Termination ACT, or ICCTA, prohibits the city from taking rail-related impacts into account while deciding on the project.
The issue of preemption has been the crux of the discussion regarding the project. In March, the Planning Commission has denied the use permit application and declined to certify the project’s Environmental Impact Report, or EIR.
In its appeal, Valero states that it agrees with the city staff’s conclusion that the city is legally prohibited from making that decision based on the 11 “unavoidable and significant” rail-related impacts, which were included in the report.
In the letter written by Deputy Attorney General Scott Lichtig, the office said the conclusion is incorrect.
“… ICCTA does not preempt or constrain the city’s discretionary decision-making authority where, as here, the city is exercising that authority with respect to a project taken by an oil company that is not subject to the jurisdiction of the Surface Transportation Board,” the letter states.
In 2014, the office also sent a letter to the city urging it to correct “deficiencies” in the draft EIR.
“In fact, for Benicia to turn a blind eye to the most serious of the project’s environmental impacts, merely because they flow from federally regulated rail operations, would be contrary to both state and federal law,” according to the most recent letter.
On Monday, or if necessary Tuesday, the city council is set to meet to make a decision on Valero’s appeal and its request to postpone the decision making until the company receives a possible declarative order from the State Transportation Board regarding the issue of preemption in the project.
Many public members have spoken in support or opposition to the project in the beginning of the month, and the public comment session will continue on Monday.
When everyone is heard, Valero will have five minutes to make its case, followed by questions from the council before it makes its decision.
Valero is seeking the permit to build infrastructure on site to allow the company bring in two 50-car trains a day carrying up to 70,000 barrels of North American crude oil. The company’s oil is now being transported into the city by marine vessels and pipeline.
Each meeting is set for 7 p.m. at City Hall, 250 E. L St.
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.
Repost from The Pioneer, Cal State East Bay [Editor: Excellent, balanced coverage. Be sure to see new quotes from Benicia Principal Planner Amy Million, Benicia resident Beverly Edmonds, Benicia Economic Development Manager Mario Giuliani, Andrés Soto of Benicians for a Safe and Healthy Community and Valero’s PR Manager Sue Fisher Jones. – RS]
Crude oil by rail a possibility in Benicia
By Kali Persall and Vanessa Pineda, Managing Editor and Contributor, April 6, 2016
Photo by Kali Persall/The Pioneer
A controversial proposal by the Valero oil refinery that would bring in thousands of tons of crude oil a day has some Benicia residents seriously questioning whether it’s time to peel the “It’s Better in Benicia” bumper stickers from the backs of their cars and relocate.
Originally proposed in 2013, the project would bring 70,000 barrels of crude oil into the Benicia oil refinery facility by roughly 100 railroad tank cars daily. It would not increase the amount of crude currently brought to the refinery through pipeline and marine vessels, but instead would replace 81 percent of the oil imported by ship. According to Valero, the refinery can process up to 170,000 barrels of oil per day.
Trains have been known to derail, and in cases where crude oil was on board, have killed people, ruined the environment and destroyed the value of entire towns. Benicia residents are divided on whether the transportation developments are necessary and worth the risk to the environment.
The Benicia City Council heard Valero’s appeal for the project on March 15, which was initially rejected the city planning commission, after four nights of hearings and public comment, on Feb. 11 where over 145 people signed up to speak, according to Amy Million, principal planner of the city. The planning commission reviewed the final Environmental Impact Report (EIR) before unanimously concluding that the potential risks to the environment in the event of a derailment or unloading accident were too significant to justify approval.
After hearing Valero’s appeal a month later, the city council is currently deliberating whether or not to approve the crude by rail project.
Three proposed possible train routes between the Southern California border, Roseville and Benicia would follow the Union Pacific railroad and pass through various cities throughout the state before arriving in Benicia. According to the Revised Draft EIR, project-related train traffic on the train routes would generate nitrogen oxide emissions that could turn into ozone, which could exceed air quality standards in air districts along the routes. This is considered one of the 11 significant unmitigatable impacts on which the planning commission based its decision to deny the proposal.
Nitrogen Oxide (NOx) is a poisonous gas and air pollutant that is emitted by automobiles, industrial sources and fuels that contain nitrogen, such as oil, according to the United States Environmental Protection Agency. When mixed with volatile chemicals in the presence of sunlight, it can form ozone, also known as smog; a gas that can cause serious respiratory damages when inhaled. According to the EPA, ozone can cause coughing, throat irritation and even reduce lung function, and is one of two pollutants that pose the greatest threat to human health in this country.
Fifty nine letters opposing the project were published in the final EIR, many containing concerns about the harmful effects that rail transportation could have on the environment. Valero’s crude by rail project was proposed shortly after a 74-car freight train carrying crude oil derailed in Lac-Megantic, Quebec, a town of roughly 6,000. Forty-seven people were killed and nearly 6 million liters of oil seeped into the land, water and atmosphere during the fire that ensued, according to the Montreal Gazette. Many residents are worried that a similar disaster could occur in Benicia, a city of roughly 28,000.
“I have a two-year-old grandchild and I worry how this will affect him,” said 16-year Benicia resident Beverly Edmonds, 67. “Will he be living in this lovely place or a toxic, decimated shell of a town or will his health be affected by toxic fumes or the effects of a rail disaster?”
According to Mario Giuliani, the city’s economic development manager, oil refineries were the city’s saving grace when the Benicia Arsenal, a military reservation next to the Suisun Bay, closed down due to lack of funding and employment opportunities in the early 1960’s. According to the city of Benicia, the arsenal was a staging area for several wars and employed thousands of people before its closure in 1964. With the displacement of so many people, the town suffered a major economic downturn according to Giuliani.
According to The Benicia Herald, Humble Oil bought some of the vacant former arsenal land in 1967. Not long after, it changed hands again when it sold to the Exxon Oil Company. The refinery’s presence brought in the oil industry and anchored the economy in Benicia, replacing many, if not all or more, of the jobs that were lost after the arsenal closure, according to Benicia city officials. Valero bought the refinery from Exxon in 2000 and currently provides over 400 jobs. According to the EIR, the project would create 20 permanent full-time jobs and 120 temporary jobs.
From the $3 million in property taxes that the refinery pays the city annually, the city only keeps 24 cents on the dollar and the rest goes to the county, schools and other programs in the area, explained Guiliani.
According to Sue Fisher Jones, public affairs manager of Valero, the Benicia refinery is one of only two in California to earn the Voluntary Protection Program “Star Site” designation, which recognizes organizations that have implemented health and safety programs that successfully control occupational hazards. The refinery earned its title in 2006 and has since passed two recertification audits. The other refinery with this designation is the Valero located in South Los Angeles.
“I have lived in Benicia since 2003 (worked at Valero since 2005) and have never experienced a community Shelter-in-Place,” Jones told The Pioneer. Shelter-in-place is an emergency response plan in which people hunker indoors to avoid hazardous air pollution.
A Facility Profile Report by the EPA revealed that Valero released 1,068,877 pounds of chemicals into the environment in 2014. The total amount released in the United States for that year was 3.4 billion pounds.
Andrés Soto, spokesperson and steering committee member for Benicians for a Safe and Healthy Community (BSHC) helped form the organization around the time of Valero’s proposal in 2013. BSHC opposed the project from the beginning and recommended that it be reviewed under the California Environmental Quality Act (CEQA) which requires agencies to identify the potential significant environmental impacts of their projects in an EIR.
The EIR looks at all the potential scenarios and issues of a project and evaluates whether the applicants are equipped to handle them. For example, in the case of a derailment, emergency response teams benefit by knowing what specific type of crude oil is being transported in order to better tackle the specific situation. “The dirtier, the heavier the crude, the more sulfur, creating more noxious emissions,” explained Soto. Valero declined to release the specific type of crude oil to be transported, labeling it a trade secret, according to the EIR.
Giuliani believes that those who don’t support the project don’t necessarily oppose Valero specifically, but oppose the oil refinery process itself. “If they had proposed to bring water in instead, no one would’ve cared,” he said.
Citizens are also concerned about the effect the project will have on the value of property. According to an article in the San Jose Mercury News, a fire at the Richmond Chevron Refinery in August 2012 caused a 14.62 percent drop in property taxes. A 2006 study by Stephen Farber from the University of Pittsburgh confirmed that housing markets are sensitive to real or perceived risks associated with being located close to a site that contains hazardous material, such as a refinery.
Photo by Kali Persall/The Pioneer
“My husband and I probably have another ten good years,” said Edmonds. “At some point we will need to move to something much smaller and easier to care for, or to a retirement home. The money we get from our house will be essential for that.”
