Garamendi praises Benicia City Council for crude-by-rail vote
By Ryan McCarthy, September 23, 2016
FAIRFIELD — Rep. John Garamendi is praising the Benicia City Council for its unanimous vote rejecting a proposed crude oil by rail facility that Valero corporation would have operated and Garamendi said would have led to dangerous railcars traveling through Fairfield, Suisun City, Dixon and Davis.
“The action by the Benicia City Council is a clear signal that shipping oil by rail presents a serious safety problem that must be addressed before our communities are faced with increased oil shipments,” Garamendi, D-Walnut Grove, said Thursday in a news release. “The council did the right thing by forcing a pause on oil by rail through our communities.”
The congressman, who represents the 3rd District that includes Fairfield and Suisun City, authored the Bakken Crude Stabilization Act to reduce the volatility of oil transported by rail and make it safer to transport, the release said.
September 21, 2016 11:54 AM
A KPIX 5 crew captured this video of Bakken crude oil getting unloaded from a train at a rail yard in Richmond. (CBS)
BENICIA (KCBS) — Benicia’s city council has unanimously voted against a plan to run crude oil trains to the Valero Refinery following a four-year-long debate about the trains.
Environmentalists and officials in places east of the Bay Area are thrilled. They were worried about the potential danger of fire or oil spills with as many as a hundred tankers full of crude oil a day rolling through places like Roseville, Sacramento, and Davis. Yolo County Supervisor Don Saylor told the Sacramento Bee he’s “over the moon.”
Valero currently receives crude oil by pipeline and by ship. It said it needed the railroad option to remain competitive in a changing industry.
A similar oil train decision could come Thursday in San Luis Obispo County, where Phillips 66 wants to build a transfer station for its refinery.
Benicia’s rejection of oil trains could reverberate across country
By Kurtis Alexander, 9/21/16 5:11pm
The Valero refinery is seen in the background behind signage for a railroad crossing on Wednesday, October 22, 2014 in Benicia, Calif. Photo: Lea Suzuki, The Chronicle
Benicia’s rejection of plans to bring trains filled with crude oil to Valero Corp.’s big refinery in the city was hailed Wednesday by critics of the country’s expanding oil-by-rail operations, who hope the flexing of local power will reverberate across the Bay Area and the nation.
Of particular interest to environmentalists and local opponents, who for years have argued that Valero’s proposal brought the danger of a catastrophic spill or fire, was a last-minute decision by U.S. officials that Benicia’s elected leaders — not the federal government — had the final say in the matter.
Word of that decision arrived just before the City Council, in a unanimous vote late Tuesday, dismissed Valero’s proposal for a new $70 million rail depot along the Carquinez Strait off Interstate 680. Valero had said the project would not only be safe but bring local jobs, tax revenue and lower gas prices.
“We’re pleased with the decision and the implications it will have across the country,” said Jackie Prange, a staff attorney for the Natural Resources Defense Council, one of several groups opposed to the project. “This issue is live in a number of sites across the country. This is definitely a decision that I think cities in other states will be looking to.”
As oil production has boomed across North America, so has the need to send crude via railroad. The uptick in tanker trains, though, has been accompanied by a spate of accidents in recent years, including a 2013 derailment in the Quebec town of Lac-Megantic in which a 72-car train exploded and killed more than 40 people.
The authority of communities to limit oil trains has been clouded by the assertion of some in the petroleum industry that local officials don’t have jurisdiction to get in the way. Companies like Valero have contended that railroad issues are matter of interstate commerce — and hence are the purview of the federal government.
Shortly before Tuesday’s meeting, however, Benicia officials received a letter from the U.S. Surface Transportation Board, which wrote that Valero, based in Texas, was not a railroad company and that the proposed rail terminal fell under city jurisdiction.
“It’s what I was waiting for to help me make my vote more defensible,” said Councilman Alan Schwartzman at the meeting.
Earlier this year, Valero had asked the Surface Transportation Board for “preemption” protection for the project after Benicia’s Planning Commission rejected the proposal. The plan proceeded to the City Council upon appeal.
The plan called for oil deliveries from up to two 50-car trains a day, many passing through several Northern California communities en route from the Bakken shale formation in North Dakota. Those trains would carry as many as 70,000 barrels of oil.
The company billed the project as a way to keep gasoline prices low in the absence of a major oil pipeline serving the West Coast. Crude is currently brought to the Bay Area mostly by boat or through smaller pipelines.
On Wednesday, Valero officials expressed frustration at the city’s decision.
“After nearly four years of review and analysis by independent experts and the city, we are disappointed that the City Council members have chosen to reject the crude by rail project,” spokeswoman Lillian Riojas wrote in an email. “At this time we are considering our options moving forward.”
The vote directly hit the city’s pocketbook. Nearly 25 percent of Benicia’s budget comes from taxes on the oil giant, and the city coffers stood to grow with more crude. The refinery employs about 500 people, according to city records.
But the city’s environmental study showed that oil trains presented a hazard. The document concluded that an accident was possible on the nearly 70 miles of track between Roseville (Placer County) and the refinery, though the likelihood was only one event every 111 years.
The document also suggested that much of the crude coming to the Bay Area from North Dakota, as well as from tar sands in Canada, was more flammable than most.
Several cities in the Bay Area and Sacramento area joined environmental groups in calling for rejection of the project.
“The council’s vote is a tremendous victory for the community and communities all throughout California,” said Ethan Buckner of the opposition group Stand, who was among more than 100 people who turned out for the council’s verdict. “At a time when oil consumption in California is going down, projects like this are unnecessary.”
At least two other plans are in the works for oil delivery by rail elsewhere in the region — in Richmond and Pittsburg. A handful of other proposals have been put forth in other parts of California, including the expansion of a rail spur at a Phillips 66 refinery in San Luis Obispo County, which is scheduled to be heard by the county planning board Thursday.
Prange, with the Natural Resources Defense Council, said this week’s finding by the Surface Transportation Board gives cities the confidence to reject the proposed oil trains, if they wish to do so.
“It reaffirms the power of local government to protect their citizens from these dangerous projects,” she said.
U.S. oil deliveries by rail have grown quickly, from 20 million barrels in 2010 to 323 million in 2015, according to government estimates. In response, federal transportation officials have worked to improve the safety of oil-carrying cars with new regulations.
But over the past year, rail deliveries nationwide have slowed, in part because of the stricter rules as well as local opposition, falling crude prices and new pipelines.
Critics have complained that the tightened rules have fallen short, pointing to incidents like a June train derailment in Mosier, Ore., which spilled hundreds of thousands of gallons of crude into the Columbia River. Leaders in Oregon are discussing a statewide ban on crude trains.
Kurtis Alexander is a San Francisco Chronicle staff writer.
By Donna Beth Weilenman (Martinez News Gazette), September 22, 2016
Valero Crude-By-Rail proponents and opponents fill Benicia City Hall Tuesday to hear the City Council’s decision on the project. (Photo by Donna Beth Weilenman/Martinez News Gazette)
Benicia City Council has unanimously denied a use permit for the controversial Valero Crude-By-Rail project, citing a federal board decision as well as a June 3 derailment that spilled 42,000 gallons of crude oil and caused a fire that burned 14 hours.
But the matter didn’t end Tuesday with the vote. The Council has asked its legal staff to rephrase its findings in a document the panel will see for approval Oct. 4. Valero Benicia Refinery will have 30 days after that to decide how to proceed.
Valero had appealed to the Council a Feb. 11 Planning Commission decision to deny both an environmental report on the project as well as the use permit the refinery had sought.
After several meetings, several members of the Council said they needed answers to their questions, some posed by constituents, before they were ready to vote.
Meanwhile, Valero sought a declaratory order from the federal Surface Transportation Board, and the Council agreed to wait until Tuesday to give the Board time to respond.
At 2 p.m. Tuesday, city staff learned the federal board denied the refinery’s request and instead issued guidelines. While Benicia has little say in the governance of railroads, the board concluded the Planning Commission decision “does not attempt to regulate transportation by a ‘railroad carrier.’”
Because Valero isn’t a rail carrier and its employees, rather than those from UP, would be offloading the crude into the refinery, the board said the Planning Commission’s decision had not tried to regulate the railroad.
“If the offloading facility were eventually to be constructed but the EIR or land use permit or both, including mitigation conditions unreasonably interfering with UP’s future operations to the facility, any attempt to enforce such mitigation measures would be preempted,” the Board’s decision said.
Scott Lichtig, California’s deputy attorney general, expressed a similar opinion in his April 14 letter.
“Because the project applicant Valero is not a rail carrier and not acting pursuant to STB authorization, ICCTA (Interstate Commerce Commission Termination Act) simply has no application to Valero and its proposed refinery upgrades,” he wrote.
Councilmember Christina Strawbridge, who said she had been doing her own “homework” about the matter and who had been carefully weighing both sides, said it was a derailment in late spring that made her reject the refinery’s application. Later, the other councilmembers joined her in voting against the refinery’s project.
The Council decision is the latest step in the project that proposed extending Union Pacific Railroad track into Valero Benicia Refinery land so than up to 70,000 barrels of oil could be brought in daily by train rather than by tanker ships.
The refinery, which produces about 10 percent of the gasoline consumed in California, originally applied for the use permit in late 2012. It not only proposed the rail extension, but also replacing and moving tank farm dikes and a concrete berm and moving underground infrastructure. The project also called for new roadwork.
A mitigated negative declaration was written and circulated between May 30 and July 30, 2013, but the city decided that document wasn’t thorough enough to meet California Environmental Quality Act requirements for such a project and ordered a draft Environmental Impact Report (DEIR) instead. That document was circulated between June 17 and Sept. 15, 2014.
After hearings and public comments, that report was revised and circulated Aug. 31 to Oct. 30, 2015, and a final environmental report was given public airing this year at Benicia Planning Commission meetings Feb. 8-11.
During that time, those who opposed the project citing environmental concerns staged protests, including walks to the five Bay Area refineries on both sides of the Carquinez Strait.
They argued that a derailment could damage Suisun Marsh, sensitive lands, such as Sulphur Springs Creek, the marshland between Benicia Industrial Park and the Carquinez Strait near Valero’s property and small and large towns next to tracks uprail from Benicia.
Detractors also insisted that the project would affect Benicia Industrial Park traffic, particularly on Park Road and ramps on Interstate-680.
They cited nearly two dozen train derailments, in particular the July 6, 2013, Lac-Megantic tragedy in which a runaway unattended Montreal, Maine and Atlantic (MMA) Railway train loaded with Bakken Formation sweet crude oil overturned in the small Quebec city.
During the derailment, the fuel caught fire and exploded, killing 47 and destroying 30 buildings.
Union Pacific and Valero representatives stressed UP’s safety record. UP spokespersons said the railroad has stronger safety practices that, among other things, requires employees to remain with an idling train. The refinery promised it would use improved, reinforced rail cars to carry its crude blend.
Refinery emergency personnel trained with Benicia municipal emergency responders to learn about the rail cars’ configuration.
Supporters reminded the Council that Valero employs about 500, and backs community projects. In addition, its projects mean jobs, not only at the refinery but for contracted industrial workers.
They also worried that denial of the project might cause the company to close the refinery, which could harm Benicia’s economy. Valero sales and utility user taxes represents more than 20 percent of Benicia’s General Fund.
Train and refinery spokespersons kept reminding the Council that because railroad operations are part of interstate commerce, they are under federal regulation, not local control.
Then a train, traveling below the area’s speed limit, derailed June 3 near the Oregon-Washington border. Although the Union Pacific locomotive was pulling the improved oil cars, the accident spilled 42,000 gallons of crude rail and ignited a fire that lasted 14 days. That began raising new questions about the safety of the reinforced tank cars and Union Pacific’s track inspection methods.
Federal investigators said Union Pacific was to blame, since it didn’t find broken bolts along the track, although a UP spokesperson, Justin Jacobs, had said the railroad’s May 31 inspection had detected no broken or damaged bolts.
During the long consideration of the divisive issue, Councilmembers themselves found themselves under fire. In previous months, Mayor Elizabeth Patterson, who sent emails about her personal findings about related matters, had her “e-alerts” and her objectivity questioned.
Tuesday night, Councilmember Alan Schwartzman responded to a recent Benicia Herald letter from project opponent Andres Soto, who had suggested Schwartzman had taken Valero money for his campaign. Schwartzman denied the accusation and criticized Soto’s behavior at past meetings. ”It’s disrespectful,” he said.
Councilmember Mark Hughes supported Schwartzman, saying he, too, had had his integrity questioned.
“Show a reasonable level of respect,” he urged, adding that Benicians didn’t like that style of campaigning.
But in Tuesday’s vote, they were unanimous.
After Councilmember Tom Campbell moved to deny the use permit, Councilmember Christina Strawbridge described the depth of her own research of various sides of the issue. What finally led her to oppose the permit was the June derailment and fire in Oregon.
Saying others, including those voting on the Phillips 66 Santa Maria rail extension, were waiting to see how Benicia would vote, she said railroads and those regulating them weren’t addressing derailments.
“This is a safety issue,” she said, adding that she would vote to deny the use permit.
Schwartzman said the matter was complex, and he had wanted to make a decision that wouldn’t embroil the city in a lawsuit. While he appreciated Valero’s decision to use safer tanker cars, he said, he couldn’t ignore the Oregon derailment. “I can’t vote for the project.”
Hughes said he agreed with the Surface Transportation Board’s guidance that the city couldn’t address railroad operations. He observed there was no such thing as a perfectly safe project. He said risk management consisted of looking at the probability something bad would happen, then at the consequences resulting from that happenstance.
Given UP’s and Valero’s safety record, especially the refinery’s plant-wide culture of safety, Hughes suggested the chance of a catastrophe was low. However, the consequences of an incident made him uncomfortable.
“There is too much uncertainty for me,” he said. The recent derailment gave him a signal.
“It was not something I could live with.”
Patterson said she, too, had made an extensive study of the matter, and said she was vilified when she tried to share her research. She said she had concerns about who would pay for a disaster cleanup, and worried how it would affect the city’s small businesses.
“I could not certify a flawed EIR,” she said, suggesting the Council deny the appeal and approve its findings at a future meeting.
In addition, she asked city staff to urge state and federal regulators to improve the way they regulate rail safety.
“That’s exactly what I want to do,” Campbell said.
