Thank you for placing the health and safety of Benicians above other concerns
By Larnie Fox, April 23, 2025
Benicia resident and artist, Larnie Fox
Dear Mayor, City Council members, and Chief Chadwick,
I am so proud of our City Council and staff!
In light of the recent announcement by Valero to “idle, restructure or cease refining operations”, it is more important than ever to have an Industrial Safety Ordinance in place. In spite of significant pressure and threats from Valero, and at great political cost, you placed the health and safety of Benicians above other concerns. Bravo! And thank you.
I think that Valero’s decision had little to do with our new ISO, but probably did affect the timing of their announcement.
It looks like what made them decide to change their operations next year was the regulatory atmosphere in California, the expense of fixing their hydrogen leak, and the $82M fine from the Air District. California is moving away from fossil fuels, and the company could see the writing on the wall.
What made them announce their decision now? My guess is it was a desire to blame you and your constituents’ measured effort to finally monitor and regulate the refinery’s ongoing release of toxins, and to stir up community resentments.
If they sell or restructure, the ISO will be important to monitor and regulate whatever activities occur on their site. If they shut it down, then we will need a plan in place to assure a “just transition” ~ aka a good clean-up of a very toxic site. With some long-term and visionary thinking, something good may yet come out of this.
The ISO will also be important to regulate the dozen or so other industries that work with dangerous chemicals in town, especially Valero’s other little refinery, the asphalt plant.
It took courage to lead our little town to stand up against big oil, but you did it, and we did it.
Valero Refining’s recent announcement to idle its petro-chemical plant next year is very encouraging news for our town and quite the opposite of the financial doomsday depicted by some fear-mongers.
As a lifetime 71 year resident, former elected public official, and local business owner, I have watched the refinery negatively impact us for over 55 years with extremely high levels of toxic air and water pollution, visual blight, and use of 50% of our city’s water resources at nominal rate.
These factors have exposed us all to severe health risks, caused a negative image of our city resulting in lower home values, and contributed directly to higher domestic water rates. This has been made even more alarmingly clear by the record-breaking $82 million fine recently imposed upon Valero for its air pollution violations in Benicia that also captured negative media-attention for our town.
The costs of having a 1960s-era oil refinery dominate our town should no longer be tolerated. We can embrace this rare chance to uplift an image of Benicia as an inviting historic waterfront community with a small town atmosphere, artist community, great schools and a welcoming downtown, rather than a pollution-filled refinery town whose far-fetched executives try to influence our local elections.
Our Benicia economy is stable and much more diverse than it was 60 years ago when the Arsenal closed. We are a commuter, residential community and no longer a company town dependent on one military installation, one company, or one refinery complex. We cannot repeat the doomsday thinking of the mid-1960s following the Arsenal closure, which led to the siting of the Humble Oil refinery (now Valero) and the nearby toxic waste dump to support it.
Short-term financial impacts related to a Valero closure have been exaggerated and can be mitigated. Since Valero does not produce sales tax for the city, the short-term revenue loss will result primarily from a Proposition 8 “temporary real property tax reduction”. This reduction will be less than 20% of factored base value since Valero has already received generous tax reductions through years-long litigation with the City and County Assessor, and because its land and improvements (office buildings, tank farms, pipelines, utility infrastructure, etc.) retain their inherent market value. Once alternative land uses occur, full property values will be restored. Just some examples of clean alternative uses are: housing, mixed use commercial, commercial retail, and clean energy. Additionally, the city will enjoy enhanced tax revenue from increased residential real property values as homes change hands. Benefitting both directly the city and its homeowners, local real estate professionals estimate a rapid 15-20% appreciation in values once the refinery- town stigma is eliminated.
Idling the refinery also provides many new financial opportunities beyond increased property tax revenues: The 50% recapture of our water resource supply can be marketed to growth-oriented municipalities at substantial annual profit; Tourism and related TOT (hotel tax) and sales tax revenue should increase as the town becomes a more attractive tourist destination; Development fee revenues will increase as new and alternative land uses occur in the industrial park; and importantly, there is the opportunity for a long-overdue port tax (common in many west-coast port cities) as our port facility will now gain additional capacity.
Lastly, regarding concerns over diminished contributions from Valero Refining to community non- profits, I believe that Benicia residents and businesses have been and will continue to support our local non-profit agencies, and this effort will be augmented by the recent creation of the Benicia Community Foundation and its already generous grant funding of local needs.
In summary, Valero’s announcement to idle refining operations bodes well for our town and creates a bright future, provided the mistakes of the 1960s following the Arsenal closure are not repeated by city leaders.
KQED NEWS Radio, by Ericka Cruz Guevarra, Julie Small, Alan Montecillo, Apr 21, 2025
Last week, the oil giant Valero announced that it will “idle, restructure, or cease operations” at its Benicia refinery that employs more than 400 workers. KQED’s Julie Small tells us how officials are reacting, and why many view this decision as a response to state and local regulations.
My heart goes out to the Valero workers and Benicia businesses whose livelihoods are at risk as a result of this decision. As Benicia Council Member Kari Birdseye put it so well in my interview with her, with sentiments echoed by Mayor Steve Young and Council Member Terry Scott, “If people are going to lose their jobs and businesses their incomes as a result of this move, addressing this has got to be a priority for the City’s leadership.” All also strongly sympathize with the nonprofits who may be denied future Valero funding.
This is an unfolding story, to put it mildly. In an attempt to pierce the haze generated by the Valero statement, here is a very initial attempt at some questions and answers – subject to change down the line as all parties clear the air on this development.
Is the refinery closing?
Not necessarily. Again, the Valero notification offers three options: “to idle, restructure, or cease refining operations.” Only one of these is closure, though that could involve Valero taking on immense clean-up cost. “Idle” is inherently temporary. “Restructure” can potentially mean all sorts of things, including sale to another company or focusing on biofuels or plastics production. Note too that Valero frames the statement in terms of its “current intent,” which gives the Texas-based corporation some wiggle room.
Why is Valero doing this?
It could be a negotiating tactic, aiming to extract concessions from California regarding regulations, legislation, policies or costs that the corporation finds unduly burdensome. In a related vein, it could be geared toward avoiding expensive upgrades necessitated by environmental, health or safety requirements that would have protected Benicians. As UC Berkeley energy economist Severin Bornstein put it in a KQED interview:
“California is phasing out its gasoline consumption and refiners see that coming,” Borenstein said, noting that the Benicia refinery’s many production and emissions problems would likely require significant, costly upgrades to address.
“So I think they looked at that and said, ‘Is it worth making that investment?’ and decided it probably isn’t,” he said.
Ironically, the rationale could even include increasing profits in certain respects. As per that KQED interview:
“Borenstein suggested that the company, which owns another refinery in Southern California, may also have calculated that shuttering production at its Benicia facility would raise gasoline prices statewide, helping its other refinery make more money.”
Did Benicia’s recently adopted Industrial Safety Ordinance play a role in this move?
Not according to Valero’s own statement on its decision, which attributes the move to far broader concerns, such as “years of regulatory pressure, significant fines for air quality violations, and a recent lawsuit settlement related to environmental concerns.
Recall, too, that the ISO would cost Valero a few hundred thousand dollars per year, in contrast with the company making $11.6 billion in profits in 2023 and 2024, a good chunk of that from its Benicia refinery. For Valero to quit Benicia because of the ISO would be very roughly equivalent to someone quitting a $50,000 per year job because of, at most, a $10 annual tax, or a business clearing $250,000 per year deciding to close down because of a $50 fee.
There’s one alternative though hopefully unlikely explanation that would partly attribute Valero’s decision to the ISO: The corporation has something to hide from the slightly increased scrutiny the ISO would spur of its emissions, operations, incidents and accidents. Again, hopefully this is not the case, but if Valero is seeking to avoid such scrutiny because it would reveal health, safety or environmental threats to Benicians, that in and of itself should be of great concern to us.
Let’s also bear in mind that the ISO is a necessary response to a plethora of Valero violations, incidents and accidents dating back over 20 years, both in Benicia and beyond. These include but are by no means limited to Valero pouring toxic emissions hundreds of times the legal limits into Benicia’s air for 15 years without informing us, as well as repeated violations in Texas that were so severe that even the very conservative Attorney General in that very oil-friendly state saw fit to sue the corporation several years ago.
Finally, note that in preparing the ordinance Benicia bent over backwards to try to compromise and address Valero’s legal and operational concerns, resulting in an ISO in some regards more accommodating than other Bay Area refinery-hosting communities have and that other Bay Area refineries manage to live with. It’s hard to believe that a Benicia move so mild could trigger a Valero decision so massive, particularly in view of the far larger California forces and policies at play. In any event, the Benicia City Council twice voted unanimously for the ISO.
Where do we go from here?
A few tentative thoughts:
As Council Member Scott, who has extensive experience and expertise with corporate transitions and planning explains, “We can’t just look in the rearview mirror toward what Valero’s done; we need to peer through the windshield toward current and emerging opportunities.”
More specifically, for instance, Benicia has about $64 million coming to it by virtue of the Bay Area Air District’s settlement with Valero over those 15-plus years of pouring poisons into Benicia’s air. These extraordinary circumstances could call for extraordinary solutions, involving interpreting Air District rules broadly or amending them to allow Benicia to adapt to this situation by, for instance, allowing aid to affected individuals and businesses, budgetary support or planning for the inevitable post-refinery economy.
As Mayor Young emphasizes, in moving forward we need to address “the real world impacts on Valero employees and Benicia residents and businesses…even as we realize that this Valero move is in response to state decisions and policies rather than Benicia’s ISO.”
Benicia is strong, smart and resilient. Over the past several years, we made it through Covid and earlier budget challenges together. There’s no sugar-coating the fact that the current challenge could well impose pain. But if we pull together rather than point fingers, and pay special heed to the needs of the persons and businesses most affected, we can emerge stronger than ever.
More on this next week.
[Note: As a member of the Benicia Industrial Safety and Health Ordinance working group, I was involved in efforts to get the ISO adopted.]
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