Copied below is an extensive article in the East Bay Express
about the upcoming appeal of the Chevron Energy and Hydrogen Renewal
project. Also, I received two very interesting and highly detailed
letters today from CBE criticizing the previous action by the Richmond
Planning Commission and criticizing the recommendations of Richmonds
secret consultant, Dr. Sahu, for unsubstantiated opinions and advice.
Click here and
here for the letters.
Big Oil in Little Richmond
Whose interests will the city council serve as it considers
Chevron's latest upgrade proposal?
By
Anna McCarthy
July 9, 2008
Maya Sugarman
Chevron's 106-year-old Richmond refinery towers
over the city both literally and figuratively.
Maya Sugarman
Rev. Kenneth Davis began campaigning against
Chevron after moving to North Richmond.
Ramses Teon
Members of Communities for a Better Environment at
a 2007 protest.
Maya Sugarman
Relations between Richmond and the Chevron refinery
have been complicated for more than a century.
Maya Sugarman
Residents of Richmond suffer from significantly
higher rates of hospitalization due to asthma and cancer than any other
city in Contra Costa County.
On June 18, President Bush took to the Rose Garden to deliver a
speech about energy in which he emphasized the pressing need to
modernize US oil refineries. "With recent changes in the makeup of our
fuel supply, upgrades in our refining capacity are urgently needed," he
said. And if the United States is to reduce its dependence on Middle
Eastern oil, the president said Congress needs to make it easier for oil
companies to use unconventional sources of fuel. "It has been nearly
thirty years since our nation built a new refinery," he added, "and
lawsuits and red tape have made it extremely costly to expand or modify
existing refineries."
The president could easily have been talking about Richmond, which is
one of 22 cities studying proposed refinery modifications to accommodate
changes in the industry's fuel supply. Back in 2004, the Chevron
Corporation proposed a billion dollar "Energy and Hydrogen Renewal
Project" at its 2,900-acre Richmond refinery. Company officials say the
project is designed to modernize old equipment, produce 6 percent more
California-grade gasoline, and let Chevron refine a wider, more
contaminated range of crude oils all with less pollution than before.
But Chevron's critics worry that the renovations will end up fouling the
air in the already-blighted Richmond neighborhoods downwind of the
refinery, and have taken up arms to halt the project's progress.
The company's plans illustrate the ways in which the nation's
refineries will likely respond as global demand for energy drives oil
and gas prices to all-time highs. The Department of Energy expects US
refiners to increase their capacity by 4.5 percent between now and 2010.
And as supplies of so-called light, sweet crude oil become scarcer and
ever-costlier, much of this new capacity will be dedicated to refining
heavier and more polluting crude oil from Canadian tar sand reserves.
Thus refineries, which turn crude oil into gasoline, must upgrade or pay
the price. "This project is the camel's nose under the tent for the rest
of oil refining in the West," said Greg Karras of the group Communities
for a Better Environment, part of a coalition of community organizations
crusading to halt the project.
Chevron's Richmond project also epitomizes the regulatory challenges
described by President Bush. The expansion faces opposition from
longtime critics like Karras who believe the company's actual intent is
to refine dirtier and heavier grades of crude oil. Although Richmond's
Planning Commission approved the project at a June 19 meeting, it
imposed a number of conditions that both Chevron and its opponents
thought were inadequate. Both sides swiftly appealed the decision, which
is now scheduled to go before the city council on July 15. Before they
cast their votes, council members will need to shrug off a din of
conflicting interests and a longtime history with the company to focus
on the project's complex facts. The council's decision will be a litmus
test for how far the city has come since its days as a perceived Chevron
"company town."
Although the oil company's plans have been reviewed by a small army
of experts, there is little consensus on even the most basic of issues.
Chief among them is whether it actually plans to use significantly
dirtier and heavier crude oils in Richmond. Company officials declined
to respond to multiple requests for an interview for this story. But in
various public forums, Chevron officials have insisted that they don't
plan to refine the more contaminated heavier crude oils in Richmond. "We
cannot now and we will not in the future be able to run heavy crude,"
company representative Bob Chamberlin said at a June 5 planning
commission meeting.
But there is evidence to the contrary. A recent study by the
Louisiana-based Subra Company, Inc., an environmental consulting firm,
suggested that similar projects at other refineries have enabled other
companies to refine heavier crude oil, resulting in increased emissions
of sulfur dioxide, a chemical linked to negative health effects. And in
its 2007 annual report, the oil company told investors, "To improve
margins, Chevron is selectively investing in its refining system to
process greater quantities of low-cost heavy and high-sulfur crude
oils." Finally, a December filing with the Securities and Exchange
Commission suggested that these are the very factors driving its
Richmond upgrade: "Design and engineering for a project to increase the
flexibility to process lower API-gravity crude oils at the company's
Richmond, California refinery continued in 2007."
Consequently, Chevron's opponents aren't buying its assurances. In
March, Communities for a Better Environment held a press conference to
address what it called the "hidden" nature of Chevron's proposed
project. "Refining lower-quality oil would release five to fifty times
more pollutants," Karras said. In response to the group's assertions,
Attorney General Jerry Brown responded by hiring an independent chemical
consultant, Geoffrey Dolbear, to review Chevron's plans. Dolbear
concluded that the new equipment proposed for Richmond would indeed
allow Chevron to refine heavier and potentially more contaminated grades
of crude oil, which would increase the company's emissions.
This disagreement was just the latest source of confusion regarding
the oil company's plans. Last December, the Attorney General's office
sent a letter to Richmond officials complaining about the quality of the
information the oil company had provided the city. "It appears that
Chevron has provided incomplete and inconsistent material information to
the different permitting agencies, which raises questions about the
parameters of the project and its environmental impacts," it said. "The
changing information on the data forms creates a moving target and each
appears to present a different project."
As far as Karras is concerned, anything that one of the world's
biggest polluters calls an upgrade could well be a downgrade for the
citizens of Richmond. "What we know for sure is that this project would
drastically increase flaring and other toxic pollution that would not be
able to be controlled," he said. Karras believes Chevron is disguising
its real plans inside a promise to make environmental upgrades that
should have been completed years ago.
Yet a consultant hired by the city of Richmond, Ranajit Sahu, insists
that Chevron is telling the truth about its plans. Based on his
research, which includes access to materials not released to the public
or company critics, Sahu said Chevron has taken all necessary
precautions to prevent any significant increase in pollution. "Yes,
Chevron would like to refine heavier crudes than they are processing
now," Sahu said. "But they will still keep them in the light-to-medium
crude range."
At a highly charged June 5 meeting of the city's planning commission,
Chevron's Chamberlin tried to quell the many suspicions about the
company's intentions. "I want to be very clear that there is no
conspiracy or hidden plan by Chevron to process heavy crude at the
Richmond refinery," he said. "We plan to run the same types of crudes
that we have been running," he said. Chamberlin insisted that Chevron
would need to come back before the city for permission to refine the
heaviest and most contaminated crude oil.
Those who weren't convinced by Chamberlin's assurances were even less
convinced when he pointed to data indicating that Richmond's air quality
represents some of the best in the Bay Area. "The bottom line is that
Richmond has very good air quality and it will continue to get better,"
he said. The comment drew jeers from the crowd, and the row of suited
Chevron representatives sitting behind Chamberlin none of whom live in
Richmond shifted nervously in their seats.
Chevron's claims about Richmond's air quality didn't impress Reverend
Kenneth Davis, who lives in a 52-unit apartment complex for seniors in
the heart of North Richmond, an unincorporated area surrounded by the
city. This neighborhood is one of the most poverty-stricken and
crime-ridden in Contra Costa County, and also happens to be one of the
closest to the refinery's sputtering smokestacks, labyrinthine
pipelines, and sand-colored tanks. "How in the world can anyone say that
we have the best air here?" he asked. "All they need to do is come and
spend a few days with me. These lawyers come in there and have nerve
enough to dictate my health. It just makes me angry."
Reverend Davis wasn't up in arms about Chevron until he moved to
North Richmond in 2006. "I moved here out of necessity, because it was
the only place I could afford to live," he said. "I didn't even think
about the fact of how close we are to Chevron." Since then, however, he
said that he and other visitors to a local senior center have developed
severe respiratory problems. But can he prove that the emissions from
the Chevron refinery caused those problems? Not really.
A 2007 report issued by Contra Costa County Health Services shows
that Richmond has significantly higher rates of cancer and asthma
hospitalizations than any other city in the county. And although many of
the pollutants emitted by refineries are known to cause respiratory
problems, there's not enough data to conclusively point any fingers.
According to the West County Toxics Coalition, Contra Costa County also
has the highest concentration of industrial facilities in the state,
making it difficult to blame bad air quality on Chevron alone.
"In industrial settings, environmental health is a really tough one
to show cause and effect with," said Chuck McKetney, a health expert
from Contra Costa County Health Services who helped put together the
2007 report. Causation also is difficult to prove because respiratory
illness is an especially complex disease, he said. And there are too
many variables involved to generate really accurate conclusions. For
example, Reverend Davis may be inhaling bad air from the refinery, but
he also smokes on occasion, which could be another reason he can't go
five minutes without coughing.
However, Chevron certainly can be held accountable for its history of
accidents. "When you have fires and explosions in places where people
already have respiratory problems, that's a problem," McKetney said.
Chevron's Richmond facilities have seen four major accidents since the
chemical explosion in 1999 that released an 18,000-pound cloud of sulfur
dioxide into the air and sent hundreds to the hospital. The refinery's
most recent incident occurred in the early morning hours of January 15,
2007. Reverend Davis remembers waking up just in time to see an enormous
plume of flames billowing from Chevron's smokestacks. The refinery is
part of the view from the third-floor apartment where he lives. It
wasn't so much the fire itself that concerned him he had seen plenty
of fire spewing from the stacks on a nightly basis but he had never
seen one of that magnitude before.
Reverend Davis turned on the television, but doesn't remember seeing
any warning messages or hearing any "shelter-in-place" sirens.
Shelter-in-place is a community warning system meant to inform neighbors
to stay indoors and tape their windows shut after an incident that could
have released dangerous toxins into the air. For the primarily non-white
residents who live close to the refinery, the threat of shelter-in-place
is just a fact of life, much like the frequent traces of rotten-egg
stink in the air. It turned out that most residents didn't hear the
shelter-in-place sirens, and were instead awoken by fire trucks or
refinery sirens. Three months after the incident, investigations
revealed that the fire was caused by aging pipes that were improperly
installed more than twenty years ago. Although residents were concerned
about the residual pollutants that could have been released into the air
as a result of the accident, Contra Costa emergency responders
determined that the amount was "insubstantial," and wouldn't harm human
health.
Tensions between Chevron and Richmond are nothing new. The big oil
company and the little city have a long-standing relationship that some
might classify as synergistic, others as parasitic. Since its
establishment by Standard Oil in 1902, the refinery has served as both
the backdrop and lead actor in the city's ups and downs. As the largest
taxpayer and employer in the city, Chevron whose Richmond refinery is
one of the oldest and most productive in the west has a well-earned
reputation for knowing how to sweet-talk city officials into giving it
what it wants.
For years, Richmond was the virtual definition of a company town. And
today there's plenty of debate about how much times have changed. "There
was a time that Chevron basically owned the city council," said
Councilman Tom Butt, who has served on the Richmond City Council for
more than thirteen years and has been known to stand up to the company.
Chevron long had a habit of picking off individual council members with
promises of hefty donations to their personal projects. Today, Butt
said, the company rarely makes direct contributions to political
candidates, and instead takes a more indirect route by donating to their
personal causes, or joining innocuous-sounding groups that then donate
money. Butt said the company also tends to give to local organizations
led by community leaders, which can hinder their ability to be critical
of the corporation keeping them afloat. His own pet cause, the Rosie the
Riveter Trust, has received around $10,000 over the past couple of years
from Chevron. "You're not supposed to look a gift horse in the mouth,"
he noted.
Consequently, Richmond residents are not only wary of Chevron's
environmental impact, they're also wary of their own city council's
ability to make decisions unfettered by Chevron's influence. Even with
the 2004 inauguration of their first Green Party Mayor, Gayle
McLaughlin, Richmond's city council still stands divided on many issues
involving Chevron. "The council has changed some since our mayor took
office, but Chevron still has people in politics," said Dr. Henry Clark
of the West County Toxics Coalition, a Richmond-based environmental
justice nonprofit organization. "And here again, it's going to come down
to politics."
Karras believes the city's elected officials have finally begun to
establish their independence, but that the city's employees are lagging
behind. "The staff has consistently helped Chevron cover this project
up, and has done so while repeatedly failing to comply with the
commissioners' directions that they analyze and address the
environmental impacts of the project and quality of oil that Chevron is
planning to refine," Karras said. He adds that the staff blatantly
ignored addendums he suggested to the environmental report at the urging
of the attorney general's office, which would have accounted for these
oversights. "Staff and civil service isn't caught up with the
progression of the elected officials," he said.
Veteran council members say the city's relationship with the company
has changed tremendously in recent years. "They used to work really hard
at relationships, for lack of a better word," Butt said. "And I think it
paid off well for them. Several years ago, for whatever reason, they
made a policy decision that they wanted to work at antagonizing the city
council."
The changes seem to have arisen around the time of Chevron's 2001
merger with Texaco, and climaxed during Richmond's budget crisis in
2004. "At the worst possible moment in Richmond's history, they
completely unplugged," said Councilwoman Maria Viramontes. The company
stopped buying many products and services from local businesses, and
managers stopped attending city events and pulled out of personal
involvement with civic nonprofits. "It was a very bottom-line, cutthroat
thing," Viramontes said. "You would get this disengagement at every
level."
The city's 2004 budget crisis was accompanied by Chevron's
introduction of a new Richmond refinery manager. According to an article
in the East Bay Business Times, manager Jim Whiteside took it
upon himself to cut at least $150 million in costs as part of the
company's global reorganization following the Texaco merger. Whiteside,
who cut 800 jobs in his first few months on the job, had a reputation as
a "no-nonsense cost-cutter," according to the article. As part of his
cost-cutting, he found a way to avoid paying the city's recently
increased utility tax rate, which cost Richmond a cool $1.4 million.
Chevron has since sued the city twice, and negotiated a number of
other tax appeals. Contra Costa County Tax Assessor Gus Kramer is
currently grappling with an appeal that could cost the county $60
million in property taxes that Chevron claimed it overpaid between 2004
and 2006. Kramer said that's just business as usual for the county's oil
giants. "Chevron is entitled to their opinion jaundiced as it is by
corporate greed," he said.
Kramer said Chevron's glossy brochures pledging that its project will
"generate millions in tax revenues that could be used to fund city
programs including public safety, street repairs, libraries and youth
services" are extremely misleading. Last year, he went in front of the
city's Design Review Board to say just that. "It's not that I'm against
the project," Kramer said. "The reason I showed up that night and spoke
before the review is that I didn't want the community or anyone to think
that the property taxes are going to increase as a result of it."
Nonetheless, the auditor, who has worked for the county for thirteen
years, said he's seen a noticeable change in the way that city officials
interact with the oil company, and is expecting councilmembers to
display surprising brawn at the upcoming meeting: "I think some of the
Richmond City councilpeople want their pound of flesh next to Chevron's
heart," he said.
And indeed, several councilmembers have said they would like to see
Chevron contribute more money to the city. In 2007, the refinery
reportedly contributed about $1 million in charitable donations to
county organizations. While Butt appreciates that generosity, he said $1
million is just a "drop in the bucket," and believes the company can do
better. For comparison, he noted that the much smaller Murphy Oil Corp.
dedicated $50 million in college scholarships for students from its tiny
hometown of El Dorado, Arkansas.
In a recent interview on NPR's Forum, Chevron representative
Dean O'Hair responded to questions about Chevron's contributions to
Richmond: "Could we do more? Maybe. But what needs to happen is that we
do that in partnership with the city. One of the things I think we can
try to help do is economic development with projects like these and
maybe more." The company says that the project will contribute 1,200
construction jobs and ten permanent new positions at the refinery.
Some observers say Chevron might be able to rekindle its relationship
with Richmond given the right investment of time, money, and personal
attention. That kind of charm offensive is certainly within the means of
a company that reported record profits of $18.7 billion in 2007. Others
say that nothing can make up for putting the health of the community at
risk. Most people at least agree that if the refinery is there to stay,
it should install up-to-date equipment. As for Reverend Davis, he just
hopes that city officials do their homework. "Don't just rubber-stamp
this project," he urges the council. "Study it. Know what's going on."
But that will be easier said than done. For the city's
decision-makers, wading through all the local, state, and federal
environmental regulations many of which are still new and yet to be
implemented anywhere has been a complex, time-consuming, and
altogether nerve-racking experience. "There's a lot at stake, and a lot
of regulatory bodies involved," said Councilwoman Viramontes. "We could
end up with a lawsuit from both ends." If the city council approves the
project, it not only runs the risk of lawsuits and endangering the
public, but it also risks further corroborating its reputation as the
company's lapdog. On the other hand, if it disapproves the project, it
could marginalize the operations of the city's chief employer,
benefactor, and taxpayer.
The recommendations of Ranajit Sahu will definitely carry weight with
the city council, as they did with the planning commission. Sahu was
Richmond's $60,000 investment in objective advice about the project. But
there was one hitch. He was the only outside consultant given access to
Chevron's "proprietary data." So when he presented his findings to the
public and city officials some of which flew in the face of what
Karras had found his suggestions were met with some backlash. For
instance, Sahu says that most of Karras' concerns about the project's
potential environmental effects are based on speculative data. "Karras'
theory is that by increasing sulfur content, you would generate more
acid gases, which could in turn cause more potential for shutdowns due
to erosion of equipment," said Sahu. "But that presupposes that you
cannot design around these issues." Karras said he won't buy any of
Sahu's rebuttals until he can see Chevron's secret data, and he thinks
Richmond's city council should demand the same.
Councilwoman Viramontes said she and her peers are pulling out all of
the stops to sift the facts of the project by studying the most recent
edition of the environmental impact report, which thanks to months of
updates and revisions is now approximately the size of three hefty phone
books.
Most councilmembers are hesitant to make predictions about the final
vote. Mayor McLaughlin and Councilmembers Butt, Jim Rogers, and Tony
Thurmond will most likely cast their votes in opposition. Butt predicts
that Viramontes, Nathaniel Bates, Ludmyrna Lopez, John Marquez, and
Harpreet Sandhu known by some as the "Viramontes Five" because their
agreement on major city decisions since 2006 has given them control of
the council will ultimately make the final decision on the matter.
Then, he says, the decision will likely go straight from council
chambers into litigation. If the council's thinking is anything like
that of the planning commission and it must be since councilmembers
confirm those commissioners then there's a good chance the council
will eventually approve the project with conditions. There's also a good
chance that both Chevron and community groups will respond by taking the
city to court.
Still, some members are convinced that the council will come
together. "I think that Chevron has managed to do the nearly impossible
task of unifying the council in opposition," said Councilman Jim Rogers,
who has a mixed track record when it comes to voting with or against the
interests of Chevron. He said Chevron's proposal, as it currently
stands, is "dead in the water, R.I.P., good riddance." Rogers believes
the council reached its wits' end with Chevron when the oil company took
its "leaner, meaner" attitude in recent years. "It's like any
relationship," Rogers said. "If you feel like you're not getting
anything out of it, you're bound to get fed up eventually."
Viramontes said there is mostly consensus among councilmembers on
"big picture things." She doesn't see anyone on the council as being
afraid of taking on the oil giant. "If there's any disagreement, it will
be about the social and legal boundaries of the proposal," she
predicted. "It will be about what tools we use to get there." But
Chevron will have to prove its dedication to the betterment of the city
to get her vote, she said. "If they're going to be here, they have to
reengage," she said. "You're here in this community and you have some
social responsibility."
Chevron's 106-year-old Richmond refinery towers
over the city both literally and figuratively. |
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