Chevron looks to profits, Richmond looks to health

Chip Johnson

Friday, June 8, 2007

It should come as no surprise that Big Oil is searching for new ways to cash in on the industry's bonanza of profits. In Richmond, Chevron officials have proposed a "significant upgrade" at the refinery that will result in a 6 percent increase in the production of vehicle gasolines there.

But it will also result in more emissions of volatile organic compounds wafting over surrounding neighborhoods, according to comments in the initial environmental impact report. The project could increase greenhouse gas emissions and, without proper mitigations and regulations, dump toxic metals and chemicals into the wastewater flowing into San Pablo Bay, the report says.

That's the rub, say community groups. And this time around, they have a powerful ally: the city's green mayor.

Richmond is the nation's largest city with a mayor who's a member of the Green Party, and Gayle McLaughlin has already made it clear that she intends to change the relationship between the city and its corporate neighbor as part of her goal of improving community health.

She was behind a ballot measure last year that would have raised the business tax on Chevron's oil-refining operations to fund city services. Voters rejected the measure, which would have levied $8 million a year on the company. But McLaughlin hasn't stopped asking tough questions of Chevron, particularly now that the refinery wants to expand production.

"I think we can certainly make the case that whether it's a new project or just a change in operations, it's going to have an effect on our residents," McLaughlin said Thursday. "I think it's something that we need to give our attention to because it raises big concerns about health and safety risks."

What Chevron officials call a "technological upgrade" to safer, more reliable, more flexible equipment is a lot more than that, say experts hired by community groups concerned with the proposal, which is the subject of a series of public hearings that began Thursday night.

"What they're doing is the latest major step in a fundamental transformation in fuel production technology," said Greg Karras, the staff scientist for Communities for a Better Environment, an Oakland-based group involved in the issue.

In layman's terms, the company is retooling its facility to process heavier grades of crude oil that require more heat and pressure and result in more pollutants being released into the atmosphere as part of the process, Karras said.

While the state Public Utilities Commission, which has authority over refinery operations, has banned construction of new coal-fired electric plants to reduce air emissions, he said, the oil industry is using dirtier grades of oil.

"Oil is getting more expensive, and dirty crude is about 30 percent cheaper on the oil market," Karras said. "It's a profit-margin issue."

One development that might raise a red flag with Chevron officials is that the city's General Plan is being reviewed for the first time in a decade.

McLaughlin is already discussing options with county regulatory agencies to provide a greater measure of local authority over the refinery, which operates at Point Molate on the outskirts of town. She also said there is a proposal to include a health element to the general plan.

About one-third of Richmond's $300 million annual budget is generated in taxes paid by Chevron. Over the years, that kind of clout has provided sufficient incentives for city officials to toe the line.

But it's not as easy as it used to be. In the past year, Richmond city officials have asked Chevron for an increase in the annual user utility rates the company pays the city -- and so far Chevron hasn't budged.

The company has a right and a responsibility to its stockholders to seek greater profits, but not at the expense of the health of those who live in nearby residential areas.

There is no question but that residents of Rodeo, Martinez, Crockett and Richmond have dealt with more than their fair share of industrial accidents, accidental toxic gas releases and fires in the past 15 years.

It's certainly not too much to ask the companies that create the pollutants, and the risk, to accept a greater level of responsibility for the collateral damage they inflict on a community.

Chevron spokesman Dean O'Hair said the company can offset higher emissions from its proposed upgrade by using air-quality credits that it earned from the Bay Area Air Quality Management District for reducing emissions in other areas of its operations.

What's more, the new process would result in cleaner gases being produced for the overall benefit of the region, O'Hair said. And the company can offset concerns about air quality with minor changes in the project as it proceeds.

Some citizens aren't so sure about that.

"The big picture here in Richmond is that what benefits the refinery isn't necessarily beneficial to the city," said City Councilman Tom Butt. "I don't care whether (the upgrade) creates a single molecule of more air pollution, Richmond is going to be stuck with it, and in my book, you have to pay for that."

Chip Johnson's column appears on Tuesdays and Fridays. E-mail him at chjohnson@sfchronicle.com.

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This article appeared on page B - 1 of the San Francisco Chronicle