Environmentalists want judge to stop construction at Chevron refinery in Richmond

By Katherine Tam
West County Times

Posted: 07/01/2009 03:19:33 PM PDT

Updated: 07/02/2009 06:23:49 AM PDT

Environmental groups are asking a Contra Costa Superior Court judge to halt construction on Chevron's retrofit of its Richmond plant to refine a wider range of crude.

The groups secured a victory in June when Judge Barbara Zuniga ruled that the project's environmental impact report was vague and inconsistent. The ruling did not specify if construction must stop. The environmental groups filed additional court papers this week, asking that permitting for the project be suspended until the city fixes the environmental report and that Chevron be given up to 60 days to demobilize as long as the activities don't involve new construction.

"Based on past litigation experience with Chevron, it could be many years after the project is complete and operating before the EIR is corrected if the project is not enjoined now," William Gallegos, executive director of Communities for a Better Environment, state in a court document.

Officials with the city of Richmond and Chevron say they aren't sure what they are legally required to do and are waiting for clarifying instructions from the court.

After months of contentious public hearings, the city granted Chevron permits last summer to replace its hydrogen plant, power plant and reformer to refine a wider range of crude that contains more sulfur.

The West County Toxics Coalition, Communities for a Better Environment and the Asian Pacific Environmental Network sued the city and Chevron in September.

The groups argue that the project enables Chevron to refine heavier crude that could increase pollution at the public's risk, and that the city-approved environmental report failed to analyze and mitigate possible impacts.

The city and Chevron disagree. Chevron contends the decades-old equipment needs to be replaced for safety reasons and that it will continue to refine light to intermediate crudes.

Last month's court ruling sided with the environmental groups and said the environmental report was not clear on whether heavier crude could be processed.

Construction on two of the four components of the project began in September.

"For now, we are continuing construction of the renewal project and plan to review our possible next steps once we've received further direction from the court," said Brent Tippen, refinery spokesman.

Chevron argues that halting construction would mean losing more than 1,000 jobs and hurt the oil company and its contractors financially. Several unions, including Steamfitters 342 — the largest on the project with as many as 600 workers — filed court statements opposing a construction stop because it would mean losing wages, health benefits and pension premiums for their members.

In her final ruling, Zuniga also found the environmental document did not take into account a proposal by Praxair to build a 22-mile underground pipeline that would carry hydrogen from plants at the Chevron Richmond refinery to Martinez and possibly Rodeo. The city also "improperly" deferred developing a plan to deal with greenhouse gases for a year, she said.

Reach Katherine Tam at 510-262-2787 or ktam@bayareanewsgroup.com.

EBMUD and Chevron team up to save water
By Laura Anthony - ABC 7 News, May 21, 2009
SEE VIDEO ON ABC7NEWS.COM:
&http://abclocal.go.com/kgo/story?section=news/local/east_bay&id=6826287
RICHMOND, CA (KGO) -- The Chevron refinery in Richmond is in the business of producing gasoline and oil products. But to do that, it uses a lot of water -- so much, that it is the East Bay's largest consumer of a most precious resource.

It does not even have a lawn, but the Chevron refinery in Richmond has long been the East Bay Municipal Utility District's (EBMUD) biggest water user, consuming an average of 9 million gallons per day.

Right now, one-third of that is reclaimed or recycled, but with a new EBMUD project going up on Chevron property, the refinery could cut its water use by another third.

"We're going to double the amount of reclaimed water we're going to use, and that reduces the demand that we have for fresh water for the refinery," refinery general manager Mike Coyles said.

The project will treat reclaimed water sent to the plant by EBMUD and fed to another plant at the refinery, according to Teri Lizarraga. Lizarraga is the health, environmental and safety manager for the refinery.

When the project is completed next year, it will reduce the refinery's use of potable water by 3 million gallons per day.

"We've been providing about 4 million gallons per day of recycled water already to Chevron for its use in cooling towers from a plant we have at North Richmond, so what this project will do is actually expand recycled water services to Chevron to meet their needs in their boilers," EBMUD water recycling program manager Linda Hu said.

The extra water saved will be available to the surrounding community, enough to meet the daily needs of 12,000 households.

EBMUD has elected to end its mandatory rationing program July 1, but is still trying to make up for a deficit created by three straight years of below average rainfall.

For more information please contact:

Brent Tippen
Policy, Government and Public Affairs

Chevron Products Company
A Division of Chevron USA
841 Chevron Way
Richmond, CA 94802
Tel 510 242 4700
Fax 510 242 3515
Brent.Tippen@chevron.com
Our focus: Incident and Injury Free

Chevron in tough fight to upgrade oldest refinery

Sat Jun 13, 2009 2:18am IST

* Part of wider push to refine oil containing more sulfur

* Chevron: 1,100 jobs at risk, permits easier elsewhere

By Braden Reddall

RICHMOND, Calif., June 12 (Reuters) - Far from Chevron Corp's (CVX.N: Quote, Profile, Research) politically charged court battle in the Ecuadorean jungle, the U.S. oil company faces a legal tussle in its own backyard over an upgrade to its oldest refinery.

A judge ruled that the environmental impact report for the San Francisco Bay refinery upgrade was inadequate, which was hailed by the environmental campaigners who brought the case.

The expansion at the 107-year-old Richmond refinery, which will both make it more efficient and more flexible, is part of a broader Chevron drive to improve profit margins on refining.

But Chief Executive David O'Reilly expressed frustration this week at the judge's decision, while also floating the possibility of the project being halted.

"We're in the middle of construction, so this is a very difficult issue for us," O'Reilly told reporters after a debate on environmental issues on Wednesday night in San Francisco.

"We haven't reached a final decision yet, but this is what I think is wrong with California, where people are ... worried about the gasoline price, and yet can't allow a project to be built after four years of hearings and permits," he added.

Construction of the new hydrogen plant at Richmond, which started last September and will allow it to process crude with higher sulfur content, has not stopped so far. According to officials at the refinery, the project employs 1,100 people on top of the 2,700 employees and 890 contractors who work there.

"My greatest concern is that we may stop the work and lay off 1,000 or more people at a time when people need jobs," O'Reilly said.

That is a serious worry in the largely working-class area. As of April, Richmond had 15.6 percent unemployment among its 54,100-strong workforce, while nearly a fifth of the workers in neighboring San Pablo were out of a job.

Will Rostov of Earthjustice said this week there was a good case for the project permits to be withdrawn.

LOCAL PROBLEM

Chevron, based in San Ramon, California, is making similar uprades to its other U.S. refineries, but O'Reilly said it had not encountered the same sort of resistance elsewhere.

"Frankly we are having much more success getting permits in other places than we are here in Richmond," he said.

While Chevron has not spelled out a specific business case for the upgrades, there is a broader industry push to do so because the average barrel of crude oil contains more sulfur.

Consequently, "sour" crude containing more sulfur has traded at an average per-barrel discount of $3 to sweet crudes since 2000, Credit Suisse analysts said in a report on Thursday.

The decision last week by Contra Costa County Judge Barbara Zuniga hinged on the wording of the environmental impact report (EIR) and the lack of specifics on crude oil measurements.

Plaintiffs worry the upgrade will lead to more pollution because the refinery will process heavier crude oil. Chevron argues that the density of the crude will not change, even if the sulfur does, while staying within the permitted range.

As stated in the EIR: "It is reasonably foreseeable that Chevron would run a crude slate similar to that which is currently processed at the refinery - but in a mixture that has higher sulfur levels."

Zuniga said the words 'reasonably foreseeable' and 'similar' detracted from the statement's certainty, and wanted more current figures on the oil processed to determine whether or not that changed over time.

Industrial gas supplier Praxair Inc (PX.N: Quote, Profile, Research) is building the hydrogen plant and would operate it. A pipeline would run to nearby refineries owned by ConocoPhillips (COP.N: Quote, Profile, Research) and Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research) to deliver excess hydrogen, but Zuniga also said the EIR did not properly account for its impact.

Zuniga's decision on whether or not to stop construction in the $1 billion project, which began last September, is now awaited. But no further dates in the case have been set.

The case is "Communities for a Better Environment v City of Richmond" in the Contra Costa County Superior Court of California, case no. MSN08-1429. (Reporting by Braden Reddall; Editing Bernard Orr)