Category Archives: Valero Benicia Refinery

Repost from Bloomberg Business News
[Editor: A local resident observed that the photo below was taken at the docks here in Benicia, California — home of Valero Benicia Refinery. The Bloomberg story says that the contaminated oil originated with Chevron and was stored at Plains All American in Martinez. But maybe there’s more to the story? Maybe Valero was an additional source or storage facility for the ship’s contents? My source says that the tanker Hellespont Protector has been seen about twice over the last few months, and is a new one around here. (Background on current efforts of the oil industry to overturn the 1975 U.S. crude-export ban.) – RS]

Contaminated Oil That No One Wants Is Heading to Asia

By Lynn Doan and Dan Murtaugh, April 26, 2015 4:00 PM PDT

Oil tanker Hellespont Protector, said to be chartered to export California oil, was anchored in the San Francisco Bay on April 20, 2015. Photographer: Lynn Doan/Bloomberg

One million barrels of oil. Enough to fill more than 60 Olympic-sized swimming pools. And there it sat in tanks outside San Francisco — for three years — despite crude prices that topped $100 a barrel.

This isn’t the prized “light, sweet” kind of crude that is pumped out of the ground in Texas, or even the thick, sticky stuff from Alberta’s tar sands. Rather, it’s what’s known as “orphaned oil” that is so contaminated with organic chlorides that it can corrode the insides of even the biggest refineries.

Now, it’s on the move — and guessing exactly where is turning into a sort of parlor game for some in the oil market. All that is known is that Chevron Corp., which flushed the oil from a pipeline in September 2012 and has seen its value drop by $50 million since then, is loading it onto two tankers bound for Asia.

“It’s really kind of a bizarre incident,” said Gordon Schremp, a senior fuels specialist at the California Energy Commission who was notified by industry representatives of the planned exports.

It’s a rare shipment, considering most crude is barred from leaving U.S. borders. It just so happens that an exemption has been in place since 1992 allowing limited amounts of California oil to leave the country.

Export Exemption

The only reason exports don’t happen very often is because California’s refiners keep almost all the state’s oil for themselves.

The saga began on Sept. 17, 2012, when Chevron told shippers that its pipeline delivering California crude to San Francisco-area refiners was contaminated. Chevron ended up pushing an estimated 1 million barrels through the pipe to get rid of the chlorides.

And so the tainted oil sat in tanks at a Plains All American Pipeline LP terminal in Martinez until this month, when all the red tape, including getting an export license from the Commerce Department, was finally cut, Schremp said.

When the contamination was discovered, heavy crude from California’s San Joaquin Valley cost $97 a barrel. It’s now $46. The difference, multiplied by 1 million barrels, is more than $50 million. And that’s not counting the cost of storing the oil for more than two years, which could add millions more.

In Limbo

West Texas Intermediate futures, the benchmark for U.S. crude, rose 9 cents to $57.24 a barrel at 11:53 a.m. local time on the New York Mercantile Exchange. Prices dropped about 44 percent in the past year.

Kent Robertson, a spokesman for Chevron, declined to comment on the exports. Brad Leone and Meredith Hartley, spokesmen for Plains, didn’t respond to requests for comment.

Oil tanker Hellespont Protector, one of the two vessels chartered to carry the crude, was anchored in the San Francisco Bay on Friday, shipping data compiled by Bloomberg show. The other, Energy Champion, is headed for Qingdao, China, a place with no refineries. It may be a stopover, or it may not be headed to a refinery at all.

Schremp, who wasn’t told where the outcast barrels are headed, said they could be used as fuel for large ships or burned in a power plant.

If refiners know about the contamination ahead of time, they can blend in additives as a cure, but it’s an expensive solution that erodes the value of the crude, said David Hackett, president of energy consultant Stillwell Associates LLC in Irvine, California.

Wherever it lands, chances are it’ll be the first and last California oil that Asia sees for a while. California crude prices have been getting stronger and refiners across the Pacific have been flooded with supplies from much closer by.

Asked whether the rare cargoes are a bellwether for future exports of California oil, Schremp said, “It’s not like it makes perfect economic sense to move barrels that way into the world market — this was an export of circumstance.”

Bakken Crude, Crude By Rail, Federal Regulation (U.S.), Tank car design, Tar sands crude, Valero Benicia Refinery, Valero Crude By Rail

Solano County study addresses rail plans, including crude-by-rail

April 18, 2015 Roger Straw

Repost from The Fairfield Daily Republic
[Editor: Download the 152-page Update from the STA website. Although this article doesn’t mention it, significant attention is paid to crude by rail in the Update: see p. 8 on the Benicia-Martinez Railroad Bridge, p. 15 on the Valero Refinery, pp. 27-29 on Future Demand (including crude-by-rail), pp. 91-93 on Potential Projects, and See also p. 130 on Positive Train Control and a reference on p. 131 to a possible “Benicia Narrows high-level rail crossing bypassing downtown Benicia.” (Note PDF page numbering is 4 more than doc page numbers) – RS]

Solano Rail Facilities Plan Update available for review

By Kevin W. Green, 4/18/15

SUISUN CITY — A draft Solano Rail Facilities Plan Update has been released for public review.

The governing board of the Solano Transportation Authority released the study this week for a 30-day period public comment.

The board last year approved developing an update to the rail plan, which was originally adopted in 1995. The board wanted to update priorities for rail stations and future service and rail freight priorities, according to a staff report.

In addition to focusing on passenger rail facilities along the main Union Pacific rail lines, it also addresses passenger rail potential in the Vallejo area and freight rail throughout Solano County, staff said in the report.

The four daily long-distance Amtrak services that connect the Bay Area with destinations to the north, south and east do not serve Solano communities directly, according to the study. As one of the largest service areas by population on those routes without a station stop, Solano should consider advocating a stop at the Suisun City or Fairfield-Vacaville stations, the study said.

Passenger travel from the Suisun City station on the Capitol Corridor, meanwhile, is about evenly split – with passengers heading east nearly equal to those going west, consultant David McCrossan said in presenting the plan update to the Solano Transportation Authority’s board.

The study includes anticipated growth in passenger rail service. Ridership growth of 10 percent to 20 percent is expected in the next 10 years, it said.

The opening of the new Fairfield-Vacaville station will likely add up to 15 percent to the total ridership within the county, the study indicated. Although the new station may initially share some of the catchment of the current Suisun City station, growing mixed-use development in the immediate vicinity of both stations will lift ridership levels overall beyond their current totals at each location, the study said.

The plan outlines various projects slated within the next 10 years. Included are station improvements, local station connections, passenger service levels, accommodating growing ridership, infrastructure safety enhancements and rail infrastructure capacity.

The infrastructure enhancements include crossing improvements at East Tabor Avenue in Fairfield, First Street in Dixon, Canon Road in Fairfield, Fry Road in Vacaville, A Street in Dixon and Midway Road in Solano County.

For more information about the rail plan update, contact the Solano Transportation Authority at 424-6075.

Benicians for a Safe and Healthy Community, Crude By Rail, Derailment, DOT-111, Explosion, Federal Regulation (U.S.), Tank car retirement, Valero Benicia Refinery, Valero Crude By Rail, Volatility

Vallejo Times-Herald: Thompson introduces act addressing crude by rail

April 16, 2015 Roger Straw

Repost from The Vallejo Times-Herald
[Editor: See also coverage in McClatchyDC News. – RS]

Thompson introduces act addressing crude by rail

By Irma Widjojo, 04/15/15, 8:06 PM PDT

Another bill concerning the transportation of crude oil by rail was introduced Wednesday, following at least two others in the past month. With a pending Valero Refinery crude-by-rail project in the works, concerned Benicians and activists said though they acknowledge the effort in the bill, they’d like to see more.

U.S. Rep. Mike Thompson, D-St. Helena, coauthored the Crude-By-Rail Safety Act, which would “establish new, common sense federal safety standards for railcars transporting oil across the country,” according to a release from Thompson’s office.

The act would take on a number of factors, including maximum volatility standard for crude oil transported by rail, higher fines for violating volatility standards and hazmat transport standards. The act will also seek to remove 37,700 unsafe cars off the rail network and recommend other measures to increase the safety of crude by rail.

“Public safety is priority No. 1 when it comes to transporting highly volatile crude oil,” Thompson said in the release.

There have been four derailments of trains carrying crude oil in the United States and Canada in under a month earlier this year — in Illinois, West Virginia and twice in Ontario.

Thompson said he has been working on the Crude-By-Rail Safety Act for about a year. The proposed legislation was also authored by Reps. Doris Matsui, D-Sacramento, Ron Kind, D-Wis., and Jim McDermott, D-Wash., and Nita Lowey, D-NY.

“Folks in the district had concerns,” he said. “Explosions have people worried.”

The bill will still have to go through its due process before it could get signed into law, and that could take some time.

Activists said these procedures won’t come in time before another possible disaster strikes.

Marilyn Bardet, a Benicia resident and environmental activist, said that even if the policy was put in place, it wouldn’t be done before the pending Valero’s Crude-by-Rail project is underway.

“That is a huge concern,” Bardet said. “Valero talks about their safety record, but they are talking about the safety of the refinery. This is really the project of the railroad.”

Benicia is currently processing the use permit and Environmental Impact Report (EIR) for the project. The Recirculated Draft EIR is anticipated to be released for public comment June 30. It will have a 45-day comment period. After the comment period closes, the city will complete the final version, which will include responses to all comments.

Bardet said she’s glad to see an effort from congress to address the Department of Transportation and the issue, but said from her initial perusing of the act she found that there were missing components to it.

A few of her concerns that are not mentioned in the proposed act are speed reduction, plans on dealing with explosions and derailment in remote areas and the safety of bridges.

“There are derailments on a regular basis, and historically they have not been shipping oil in hundreds and hundreds of (train) cars across the country,” Bardet said. “They are doing this at the risk of people’s safety and the environment.”

A spokesman for Benicians for a Safe and Healthy Community, an advocate group against the crude-by-rail project, agreed with Bardet’s sentiment.

“In general we’re glad to see our federal representatives are paying attention to the critical issue that impact communities around the country,” Andrés Soto said.

However, Soto is doubting the passage of the bill.

“I think that there’s going to be a major challenge to get this legislation passed,” he said, adding that he would like to see more transparency from the refineries and railroad companies.

Thompson said he doesn’t know if he’s going to be met with pushbacks on the proposed bill.

“I’m trying to do what’s right, and not what’s easy,” he said.

Soto said the only way to ensure the community’s safety before a policy is set is by having a national moratorium on the transportation of these crude oils, especially of more volatile kinds like Bakken shale oil.

Benicia Mayor Elizabeth Patterson, an outspoken advocate of rail safety, calls the bill “a good start” and is “a comprehensive way to address rail safety.”

Speaking in a general context of the issue, Patterson said she is glad to see that “the dots have been connected between the issue of volatility of some of the products and transportation.”

She shared some of the few questions that the activists had, including waiting for a set of standards.

“What’s the rush?” Patterson said. “Why not take some time out and get our house in order in terms of federal regulations, and the response to accidents?”

She also said she would like to see funding in place for the response to accidents and training for local governments and public safety personnel.

“The response equipment doesn’t exist in most routes,” Patterson said. “The funding needs to be there.”

Paterson acknowledged that the bill is still in its early stages.

“I imagine there would be a lot of comments,” she said. “It’s a good first start, I wouldn’t want to see anything less. It shows that (Thompson) has been listening to the public, and he’s responded.”

To read the proposed act, visit mcdermott.house.gov/images/pdf/crudebyrailsafetyct.pdf.

A similar senate bill was also introduced last month by Sens. Maria Cantwell, D-Wash., Patty Murray, D-Wash., Tammy Baldwin, D-Wisc., and Dianne Feinstein, D-Calif.

U.S. Rep. John Garamendi, D-Solano, also authored a legislation, H.R. 1679, in March, which would prohibit the transport of crude-by-rail unless authorities have reduced the volatile gases in the oil prior to transportation.

Bakken Crude, Crude By Rail, Derailment, Emergency Readiness & Response, Explosion, Federal Regulation (U.S.), Massive increase in crude-by-rail, Oil stabilization, Rail Safety, Reid vapor pressure levels, Valero Benicia Refinery, Valero Crude By Rail, Volatile gases, Water quality

Federal, state and local officials gather in Davis California to discuss oil train safety legislation

April 9, 2015 Roger Straw

Repost from The Vallejo Times-Herald
[Editor: Thanks to Rep. Garamendi for his sponsorship of HR1679 to require Bakken oil stabilization before it is loaded onto oil trains. But you can add Garamendi’s name to the long list of officials who show little interest in stopping bomb trains, who operate under the illusion that “safer” is ok. Quote: “He added that the push isn’t to stop transportation of oil by rail, but to make it safer….” – RS]

Crude oil-by-rail safety focus of proposed bill

By Melissa Murphy, 04/08/15, 10:05 PM PDT

U.S. Congressman John Garamendi, D-Solano, pauses as a freight train passes during a press conference at the Davis Amtrak Depot on Wednesday to highlight the need for state and federal action to improve the safety of crude oil-by-rail transports. Joel Rosenbaum — The Reporter

Solano County Supervisor Skip Thomson expresses his concerns about rail safety as he participates in a press conference on the issue Wednesday in Davis. Joel Rosenbaum — The Reporter

Transportation of crude oil by rail was a hot topic Wednesday as federal, state and local government officials gathered at the train depot in the city of Davis.

Congressman John Garamendi, D-Solano, addressed media during a press conference about his legislation, H.R. 1679, which would prohibit the transport of crude-by-rail unless authorities have reduced the volatile gases in the oil prior to transportation.

Specifically, maximum Reid vapor pressure of 9.5 psi, the maximum volatility permitted by the New York Mercantile Exchange for crude oil futures contracts.

“Further analysis and debate is warranted, and H.R. 1679 is intended to move debate forward and stress the urgency of action before more lives are needlessly lost,” Garamendi said. “It doesn’t have to be explosive.”

He added that the push isn’t to stop transportation of oil by rail, but to make it safer and that the federal government needs to get its “train in gear” to adopt regulations.

Sarah Feinberg, acting administrator of the Federal Railroad Administration, said even though the issue is complicated, they’re working on a comprehensive approach.

She explained that there has been a 4,000 percent increase in the amount of crude by rail. It continues to be transported by rail, pipeline and truck.

While it will take a long time to create and pass new regulations and standards, interim steps have been taken, including additional emergency regulations, speed reductions, increased inspections and more emergency equipment.

“We’ll continue to do more,” she said.

Standing next to photos of two fiery oil car train explosion, one that occurred as recently as February in West Virginia, Davis Mayor Dan Wolk said the trains go through the heart of the city, and there is a high risk if crude-by-rail starts moving through the corridor.

“It could have catastrophic effects in our community,” he said. “Garamendi’s legislation is in perfect alignment with city objectives. Safety is the priority.”

Solano County Supervisor Skip Thomson agreed and added that the legislation needs to be passed as soon as possible.

Other steps have been taken by the California Office of Emergency Services.

Eric Lamoureux, inland regional administrator for OES, said six hazardous materials vehicles stand ready to respond throughout the state and within the next few months local exercises will test the systems and procedures in place.

Lamoureaux also explained that explosions are a concern, but there also is a risk to water supply. He shared that a derailment in November sent eight train cars and loads of corn into Feather River Canyon near Lake Oroville.

He added that it could have been a bigger issue if it was crude oil.

Garamendi also explained that the process of removing volatile gases isn’t new, but a regular standard for refineries in Texas.

Meanwhile, the city of Benicia is considering an application that would allow Valero Refinery to receive and process more crude oil delivered by rail. The proposed crude by rail project would be a third means to deliver crude oil. So far, Valero receives the crude oil by marine deliveries and pipeline.

According to the city of Benicia website, the city has determined that sections of the Draft Environmental Impact Report, when it comes to the Valero project, will need to be updated and recirculated. The anticipated release of the Recirculated Draft EIR for public comment is June 30. The Recirculated Draft EIR will have a 45-day comment period. After the comment period on the Recirculated DEIR closes, the city will complete the Final EIR which will include responses to all comments on the original Draft EIR and the Recirculated Draft EIR.