BAY AREA AIR QUALITY MANAGEMENT DISTRICT
HEARING BOARD, MARCH 15, 2022

DOCKET NO. 3731:
APCO vs. VALERO REFINING COMPANY – CALIFORNIA
Accusation of Violation of Regulation 8, Rule 2; and (Proposed) Stipulated Conditional Order for Abatement (BENICIA)

Summary of Hearing:

Vallejo Sun report, by Scott Morris: Valero Benicia Refinery ordered to stop 20 years of illegal toxic emissions, public gets detailed summary of emissions 2003-2021

Background documents from BAAQMD website:

3/15/2022

Hearing Board Calendar (271 Kb PDF, 1 pg, revised 3/2/2022)Accusation – filed 01/24/22 (7 Mb PDF, 16 pgs, posted 3/12/2022)Statement by Complainant – filed 02/17/22 (666 Kb PDF, 9 pgs, posted 3/12/2022)Statement by Respondent – filed 03/10/22 (303 Kb PDF, 5 pgs, posted 3/12/2022)

Air District board approves abatement order for longstanding toxic releases at Valero Benicia refinery

Vallejo Sun, By Scott Morris, Mar 15, 2022

BENICIA – A hearing board for the Bay Area Air Quality Management District approved an abatement order for the Valero Benicia Refinery on Tuesday to correct an issue where a hydrogen vent has been allowed to spew thousands of tons of pollution into the air for decades.

The approval of the abatement order was expected as both the air district and Valero recommended its approval. But the ordeal has exposed some of the limits of the air district’s ability to detect and address harmful emissions from the refinery and raised questions about whether it withheld vital information from the Benicia community regarding Valero’s operations.

The excess emissions from a hydrogen vent were first detected by Valero in 2003 when it started measuring output from the vent, but the air district believes it likely had been going on even earlier and has no measurements from that time.

Since 2003, the air district estimates that the vent was releasing about 4,000 pounds of hydrocarbons per day, far more than state regulations allow. Overall, Valero released more than 10,000 tons of excess hydrocarbons over 16 years, including 138 tons of toxic air contaminants benzene, ethylbenzene, tolyrene and zolerine.

Following the discovery, Valero made a change to its process where it recycled the hydrogen, which resulted in a 70% reduction in emissions in 2020 and a 98% reduction in 2021 from 2019 levels, nearly bringing the refinery into compliance, according to new data released by the air district on Tuesday.

However, air district counsel Joel Freid said that the 2021 data had only been submitted last week and had not yet been vetted by the air district.

Summary of Valero hydrogen venting carbon emissions 2003-2021

Air district officials have said that the refinery should have reported the emissions, which were not detected by any existing monitoring or inspection mechanisms, but Valero officials said during Tuesday’s hearing that the company was not aware the vent was subject to regulation and only used the data it collected for its internal operations.

When the air district discovered the excess emissions in 2019, it didn’t report its findings publicly either, working with Valero to fix the problem for nearly two years before disclosing it to city leaders and the community. That has led to criticism of a lack of transparency by the air district.

Tuesday’s hearing involved witnesses describing the air district’s findings and Valero’s response to the hearing board, a quasi-judicial body that adjudicates compliance issues and hears appeals. Since both sides had agreed with the abatement order prior to the hearing, there was little argument.

The air district issued the proposed abatement order in January and a statement describing its investigation in February. Valero submitted a written response to the air district hearing board last week.

Nearly 20 years of excess emissions detected

The refinery is one of five oil refineries in the Bay Area and processes 170,000 barrels – approximately 7 million gallons – of crude oil per day. Valero purchased the refinery from ExxonMobile in 2000 and has operated it since.

The air district found a hydrogen vent releasing excess emissions at another Bay Area refinery in July 2017 and the following year launched an investigation into whether any of the other four Bay Area refineries had similar vents. It discovered the excess emissions by Valero in 2019.

The equipment that led to the emissions is a vent for excess hydrogen. Hydrogen is used by the refinery in various parts of its production process and while the refinery approximately produces what it needs, it creates some excess that is released into the atmosphere. This isn’t an issue with pure hydrogen, but air district officials would later discover that the hydrogen released by Valero was hardly pure.

Gasses vented by a refinery are not allowed to exceed 15 pounds per day and 300 parts per million of carbon, according to Linda Duca, a supervising air quality specialist at the air district. The emissions from Valero were about 10,000 parts per million.

According to the air district, after an exhaustive search of the air district’s permitting records, it discovered there was no acknowledgement of the vent’s existence.

“We have one inspector assigned to Valero, that inspector is responsible for inspecting 239 sources,” Duca said during Tuesday’s hearing. “The stack does have steam coming out of it but it doesn’t have smoke or any unusual color coming out of it that would draw the inspector’s attention. It really did take this across the board hydrogen venting audit to discover this.”

As for why Valero didn’t report it, Valero Benicia director of health, safety, environmental and regulatory affairs Kimberly Ronan said Tuesday that Valero didn’t realize that state regulations applied. The regulations had been last amended in the early 1980s and the stack predated Valero’s acquisition of the refinery, so only a change in regulation or a change in Valero’s process would trigger a review of the regulatory applicability, she said.

“It’s fair to say we obviously knew that there were some impurities in the hydrogen stream,” Ronan said.

After discovering the violations, Valero instituted a partial fix in 2019 that resulted in a reduction in emissions but still more than state law allows. Valero has designed an engineering fix that it says will be implemented during the facility’s next “turnaround,” a periodic full plant shutdown for maintenance.

Exactly when that will be, however, is unclear as the turnaround schedule is proprietary information the company keeps secret as it can affect fuel supply and gas prices.

Valero had a two-month turnaround late last year, refinery manager Josh Tulino said during a December meeting of the Benicia Refinery Community Advisory Panel. During that event, a contractor working on a piece of equipment had an accident and died.

Air district faces accusations of lack of transparency

Since announcing the proposed abatement order, the air district has taken steps to conduct community outreach, including holding a virtual town hall meeting last month, where many members of the community were concerned both with how long it had taken the air district to detect the emissions and how long it had taken to inform the community.

During that meeting, Solano County public health officer Bela Matyas discussed the potential health effects of the emissions. While he said it was difficult to quantify, he said people with respiratory conditions could have that exacerbated. And while some of the chemicals released could be carcinogenic, the probability of a cancer case occurring was less than one case over 20 years of exposure.

“But that’s not the same thing as no risk,” Matyas said. “However low that risk number may seem, I don’t think it’s right to say it was a non-risk scenario.”

A week later, air district officials appeared at Benicia City Council meeting and faced many of the same concerns from the city council.

Air district Senior Deputy Executive Officer of Operations Damian Breen said at the March 1 meeting that the air district did a health risk analysis of the emissions in 2019, and determined that the facility would be required to install controls based on the toxic emissions that it was detecting.

Benicia Mayor Steve Young said he was concerned about that response as not even city officials were informed of the emissions before January of this year.

“You still did not release that information to the city or the county or the community,” Young said. “If you’re identifying toxic releases and then not telling people about it, that’s problematic for the community.”

Breen said that the air district did inform a county inspector of the emissions in June 2019 and followed up with emails in 2020.

“We take our duty to protecting this community very seriously,” Breen said. “We should have done better in this regard and we understand that and that’s why you see us changing our processes here.”

Breen said that had the air district been operating in 2019 as it is today, the case would have come before the hearing board sooner. “We’ve used our hearing board process very few times over the last 20 years, and we think it’s time that that changed,” he said.

Regarding Valero collecting data on the vent for its operations but never reporting it to the air district, Breen said, “they knew or should have known that those emissions should have been reported.”

The air district is still evaluating what monetary penalties will be imposed on Valero for the violations, but Breen said air district staff will recommend to the agency’s Board of Directors that as much of penalty as possible will go to the Benicia community, but did not say how.

The air district has also said it reported the violations to the U.S. Environmental Protection Agency and has not ruled out criminal prosecution, though in last month’s meeting officials said they have not yet communicated with the state Attorney General’s Office nor the Solano County District Attorney’s Office.