Category Archives: Tar sands crude

If California is so climate friendly, why are Bay Area air regulators allowing increased tar sands oil refining (and offshore drilling)?

Repost from Red Green and Blue

If California is so climate friendly, why are they upping tar sands oil refining (and offshore drilling)?

By Dan Bacher, September 4, 2018

As thousands get ready to march in the Rise for Climate Day of Action in San Francisco September 8 and the city gears up to host the Governor Jerry Brown co-sponsored Global Climate Action Summit next week, area climate and environmental justice advocates say local air regulators mandated to protect air quality and the climate are taking significant steps to allow increased tar sands refining and creeping refinery emissions in the Bay Area.

No Fossil Fuels for California
(Photo by Peg Hunter)

Major public protest is expected tomorrow, September 5,  at the Bay Area Air Quality Management District (BAAQMD) Board of Directors meeting at 9:30 a.m. at the agency’s headquarters at 375 Beal St., San Francisco.

The event will preceded at 8 a.m. by an Idle No More SF Bay-led prayer circle and teach-in outside BAAQMD headquarters, according to a press release from the Communities for a Better Environment, 350 Bay Area and the Sunflower Alliance.

The local climate and environmental justice advocates say they plan to “sound the alarm about the widening gap between lofty California climate goals and the reality on the ground here in the Bay Area and other refining centers in the state.”

A recent public records request reveals that BAAQMD staff issued an administrative permit on August 16, 2018 to increase production capacity at the Phillips 66 refinery by 61.3 million gallons per year.

“This permit allows for increased heavy oil processing, or hydrocracking, at the Rodeo facility, and will enable the refiner to process the increased amounts of Canadian tar sands oil it proposes to bring in across San Francisco Bay via nearly tripled oil tanker traffic in a wharf expansion project,” the groups said. “ This small but highly significant step actually allows Phillips 66 to begin implementing its goal of switching its San Francisco Refinery over to tar sands.”

“The Rodeo refinery is connected to its sister refinery in Santa Maria by pipeline; together they make up the larger San Francisco Refinery.  Two years ago, multi-community protest shut down a Phillips 66 proposal to increase tar sands deliveries by oil train to the Santa Maria facility,” the groups said.

“The company is trying to sneak its expansion past regulators and the public by pretending each little increase is unconnected, but we aren’t fooled,” said Sejal Choksi-Chugh, Executive Director of San Francisco Baykeeper regarding the permit:

The groups said the permit was issued without any public review or notice while Chief Air Pollution Control Officer Jack Broadbent was meeting with First Nations representatives and touring tar sands mining sites in Alberta, Canada.

“The fact-finding tour, which included several BAAQMD board members, took place at the urgent request of members of Idle No More SF Bay, who urged local regulators to connect the dots between the destructive impacts of Canadian tar sands mining on carbon-sequestering boreal forest and First Nations peoples, soaring greenhouse gas emissions and local Bay Area air quality and public health,” they said.

Pennie Opal Plant of Idle No More SF Bay said, “It is wildly irresponsible for Phillips 66 to add to the problems that are causing sick refinery communities and the climate disruption impacting us in California and around the world.  Phillips’ expansion proposal must be stopped and the Bay Area Air Quality Management District is the agency to stop it.”

Jed Holtzman of 350 Bay Area stated: “BAAQMD has committed to a vision of a fossil-free Bay Area in 2050, starting now with steep reductions of the pollution that causes premature death in our communities and destroys the stable climate.  Yet its action to allow Phillips 66 to expand its refinery infrastructure ensures more local air pollution and more greenhouse gas emissions. Air District permits must be aligned with agency goals.”

Area climate and environmental justice advocates said news of the secret permit was distressing to many of them.

“This type of rubber-stamping of refinery permits demonstrates how BAAQMD serves at the pleasure of the fossil fuel industry, not the citizens who live in the Bay Area,” said refinery neighbor Nancy Rieser of C.R.U.D.E., Crockett-Rodeo United in Defense of the Environment.

Ironically, the permit was issued nearly five years to the day after the Air District board passed a resolution condemning the KXL pipeline, noted Rieser.

That resolution warned against the more intensive processing required by tar sands oil, which causes enormous quantities of toxic, criteria and greenhouse gas pollutants to spew from refinery smokestacks.  As the 2013 resolution made clear, “any increase” of these pollutants will cause negative impacts on the health of local residents.

”Tar sands bitumen is the most carbon-intensive, hazardous and polluting major oil resource on the planet to extract, transport, and refine. Despite this, the Air District staff is intentionally bypassing California Environmental Quality Act (CEQA) review and refusing to evaluate the climate impacts of its permit, which opens the gates to increased tar sands refining,” the groups said.

“Staff argues that it must bypass CEQA, one of California’s greatest environmental protections, because the revised cap-and-trade program (AB 398) that Governor Brown so aggressively pushed for last summer has withdrawn the authority of all regional Air Districts to directly regulate refinery-emitted greenhouse gases.   California’s carbon pollution-trading program is now BAAQMD’s chief alibi for eliminating public and board review, and for refusing to protect the climate from oil pollution,” the groups said.

Activists said they are also alarmed by the “gutting and indefinite postponement of a long-awaited particular-matter reduction regulation impacting the Chevron, Marathon (formerly Tesoro) and Shell refineries.”

A letter submitted to the Air District by 25 environmental justice organizations on August 16 points to yet another “secret agreement”—this one signed with the oil industry by the District’s Chief Air Pollution Control Officer. The agreement commits the Air District to propose and advocate for weakened emissions limits.

”As the Global Climate Action Summit rapidly approaches, our air quality regulators and designated climate protectors need to stop coddling the oil industry and start demonstrating real accountability to the public. People’s lives depend on it,” the groups concluded.

Read the Demand Letter to BAAQMD for Refinery PM Clean-Up at www.CBECAL.org.

While California is often lauded as a “climate leader” and Governor Jerry Brown is praised as a “climate hero” in national and international idea, the reality is much different, as we can see in the  widening gap between lofty California climate goals and the reality on the ground in the Bay Area and other refining centers in the state.

The reality is that Big Oil is the largest and most powerful lobby and the Western States Petroleum Association (WSPA) is the largest and most powerful lobbying organization. As a result of the enormous political influence of WSPA and the oil industry on the Brown administration and the Legislature, Governor Brown’s oil and gas regulators have approved over 21,000 new oil and gas permits in the past seven years — and Brown controls 4 times the number of offshore wells that Donald Trump does.

WSPA and Big Oil wield their power in 6 major ways: through (1) lobbying; (2) campaign spending; (3) serving on and putting shills on regulatory panels; (4) creating Astroturf groups: (5) working in collaboration with media; and (6) contributing to non profit organizations.

This article on Big Oil Regulatory Capture is a must-read for everybody going to the BAAQMD meeting tomorrow, the Rise for Climate March on September 8, and the many other climate events planned for the coming week: Before the Rise for Climate March Sept. 8, read this: Big oil’s grip on California.

U.S. imports of Canadian crude oil by rail increase

Repost from Today in Energy

MAY 2, 2018

U.S. imports of Canadian crude oil by rail increase

monthly crude oil shipments by rail, as explained in the article text

Source: U.S. Energy Information Administration, Petroleum Supply Monthly

Growth in Canadian crude oil production has outpaced expansions in pipeline takeaway capacity and, along with past pipeline outages, has driven Canadian crude oil prices lower and increased Canadian crude oil exports by rail to the United States. However, the outlook for increased volumes of Canadian crude oil shipped by rail to the United States is highly uncertain despite significant U.S. demand for Canadian crude oil, specifically on the U.S. Gulf Coast.

Crude oil production in Canada increased to 3.9 million barrels per day (b/d) in 2017, up approximately 300,000 b/d from 2016. However, crude oil pipeline capacity out of Canada has failed to keep pace with growing production. Consequently, volumes of Canadian crude oil exported to the United States by rail increased in 2017. In December 2017, U.S. imports of Canadian crude oil by rail set a monthly record of 205,000 b/d, nearly matching the amount of crude oil shipped by rail within the United States that month (246,000 b/d).

Changes in the relative prices of two crude oils—Western Canada Select (WCS) in Hardisty, Alberta, and West Texas Intermediate (WTI) in Cushing, Oklahoma—demonstrate the effects of transportation constraints. Until late 2017, WCS prices averaged $10 to $15 per barrel (b) lower than WTI, largely reflecting differences in the quality of the two crudes. In late 2017 and early 2018, as crude oil production began to exceed pipeline capacity and demand to transport crude oil by rail increased, WCS priced about $25/b lower than WTI.

The price spread between WCS and WTI has since narrowed to an average of $16/b in early April, suggesting some demand for transporting Canadian crude oil by rail has lessened. Low WCS prices may have led some Canadian crude oil producers to reduce output and advance schedules for planned maintenance, likely reducing the need to move crude oil by rail.

daily price differences of selected crude oil, as explained in the article text

Source: U.S. Energy Information Administration, based on Bloomberg, L.P.

Of the 144,000 b/d of Canadian crude oil imported by rail in 2017, about half (70,000 b/d) went to the U.S. Gulf Coast, or Petroleum Administration for Defense District (PADD) 3. Imports by rail made up 18% of total Canadian crude oil imports to the Gulf Coast, and 2% of the 3.1 million b/d of total crude oil imported by the Gulf Coast in 2017.

monthly crude oil receipts by rail from Canada, as explained in the article text

Source: U.S. Energy Information Administration, Petroleum Supply Monthly

With an API gravity of approximately 20 degrees, WCS crude oil is a heavy crude oil that is attractive to Gulf Coast refiners that process heavier crude oil. Traditional suppliers of heavy crude oil into the Gulf Coast region, such as Venezuela and Mexico, have experienced production declines that resulted in lower crude oil exports, making Canada an increasingly important source of U.S. imports of heavy crude oil.

In January 2018, the U.S. Gulf Coast imported more crude oil from Canada (448,000 b/d) than from Venezuela (438,000 b/d) for the first time on record and imported more crude oil from Canada (379,000 b/d) than from Mexico (309,000 b/d) in September 2017. Another outlet for Canadian crude oil on the Gulf Coast may be re-exports. Since the removal of restrictions on crude oil exports from the United States, Canadian crude oil can be re-exported from the Gulf Coast without having to be segregated.

monthly U.S. Gulf Coast crude oil imports by country, as explained in the article text

Source: U.S. Energy Information Administration, Petroleum Supply Monthly

Large-scale and sustained increases in crude oil by rail volumes from Canada face several obstacles from the Canadian rail industry and competing pipeline projects. Trade press reports indicate that before investing, Canadian rail companies are requiring that crude oil producers enter long-term commitments for crude oil-by-rail capacity. Canadian crude oil producers have been reluctant to agree to long-term rail commitments because pipeline capacity could increase in the short to medium term as new pipeline projects come online and some currently operating pipelines begin to ease volume restrictions.

Principal contributors: Arup Mallik, Mason Hamilton

Crude oil tank cars derail in Texarkana – no spill or explosion

Repost from KSLA 12 News

Crews work to clear Texarkana train derailment

By Brett Kaprelian, Digital Content Producer, April 22nd 2018, 4:35 pm PDT

KSLA News 12 Shreveport, Louisiana News Weather & Sports

TEXARKANA, TX (KSLA) -Crews are working to clear a train derailment in Texarkana, Texas, Sunday afternoon.

It happened around 11:30 a.m. at the Union Pacific Texarkana Rail Yard.

A Union Pacific spokesman said the southbound train that derailed had 12 tank cars carrying crude oil from Canada down to Beaumont, Texas.

Nine cars are on their side and three are standing upright.

No injuries or leaks have been reported.

Crews are on site trying to clear the trains from the roadway.

According to the Union Pacific spokesman, the train tracks have been damaged by the derailment. Crews will work through the night to clear the scene and fix the tracks.

Major Bank Ends New Investment in Arctic Drilling, Tar Sands/Oil Sands, and (Most) Coal Projects

Repost from The Globe and Mail

HSBC to stop funding most new fossil fuel developments

LONDON REUTERS, PUBLISHED APRIL 20, 2018
The HSBC bank logo is seen at their offices in the Canary Wharf financial district in London on March 3, 2016. | REINHARD KRAUSE/REUTERS

Europe’s largest bank, HSBC, said on Friday it would mostly stop funding new coal power plants, oil sands and arctic drilling, becoming the latest in a long line of investors to shun the fossil fuels.

Other large banks such as ING and BNP Paribas have made similar pledges in recent months as investors have mounted pressure to make sure bank’s actions align with the Paris agreement, a global pact to limit greenhouse gas emissions and curb rising temperatures.

“We recognise the need to reduce emissions rapidly to achieve the target set in the 2015 Paris Agreement … and our responsibility to support the communities in which we operate,” Daniel Klier, group head of strategy and global head of sustainable finance, said in a statement.

HSBC said it would make an exception for coal-fired power plants in Bangladesh, Indonesia and Vietnam.

“There’s a very significant number of people in those three countries who have no access to any electricity,” HSBC chief John Flint told HSBC shareholders at the bank’s annual general meeting in London on Friday.

“The reasonable position for us is to allow a short window for us to continue to get involved in financing coal there … if we think there is not a reasonable alternative,” he said.

Aside from the coal exemptions environmental campaigners Greenpeace welcomed the move and said HSBC’s new energy strategy would prevent it from providing project finance for TransCanada Corp.’s proposed $8-billion Keystone XL oil pipeline to Nebraska.

“This latest vote of no-confidence from a major financial institution shows that tar sands are becoming an increasingly toxic business proposition,” John Sauven, executive director of Greenpeace UK, said in a statement.