Judge: Chevron must halt Richmond expansion

David R. Baker, Chronicle Staff Writer

Thursday, July 2, 2009

 (07-02) 17:50 PDT Martinez -- A judge has ordered Chevron Corp. to stop work on its controversial oil refinery expansion in Richmond, handing environmentalists their biggest victory to date in a long fight over the project.

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Contra Costa County Superior Court Judge Barbara Zuniga gave Chevron 60 days to wind up work on the project, which would have given the 107-year-old refinery greater flexibility to process different types of crude oil. Zuniga's orders, dated Wednesday, were released Thursday.

Her ruling doesn't kill the upgrade project outright. But before it could proceed, Chevron would need a new environmental impact report and a new permit from the Richmond City Council, which narrowly approved the project last year. Zuniga last month ruled that the original environmental report didn't answer key questions, siding with environmental and community groups that had sued to stop the expansion.

"The court held Big Oil accountable," said Will Rostov, staff attorney for Earthjustice, one of the groups involved in the suit. "The judge got it."

The victory, however, comes at a cost.

San Ramon's Chevron began the upgrades last September, bringing in more than 1,000 workers for the task. The company laid off 100 of those workers Thursday and will cut more in the coming weeks.

"While we believe the court's decision is wrong, we will begin demobilizing," said Chevron spokesman Brent Tippen. "For contract workers, there will be no project to work on until this is resolved."

The company has not given up on revamping the refinery, Tippen said. But halting the upgrade will cost workers $50 million to $75 million in lost income, he said.

In addition, the City of Richmond will lose $61 million that Chevron pledged to various community programs as part of the project's approval, Tippen said.

"As of right now, we are reviewing our options and will work with the city to find a path forward," Tippen said.

The groups suing Chevron want the workers retained until construction can begin again.

They doubt that the oil company, America's second largest, will walk away from the project. Instead, they want Chevron to agree to limits on the use of heavier grades of crude oil at the refinery, grades they fear could produce more air pollution.

"The workers shouldn't pay for Chevron's mistake," said Greg Karras, senior scientist for Communities for a Better Environment, another of the suit's plaintiffs. "The real solution is to replace the refinery's ancient equipment. Design it right, design it for the same quality of oil."

The fight over the refinery has focused on the types of oil processed there. But it has also involved long-simmering resentment among the refinery's neighbors, who say pollution from the aging facility threatens their health.

Chevron describes the project as an important upgrade. Although the refinery would still process the same amount of crude oil, it would be able to make more gasoline from that oil, about 7 percent.

The refinery would still use the same kinds of crude oil that it does now, according to the company. The four-year upgrade, however, would let the refinery process larger amounts of the heavier grades of crude already used there.

Opponents consider that description a smokescreen. They say the project's true intention is to handle even heavier grades of crude oil, grades that contain higher levels of toxins such as mercury and can lead to more air pollution.

"This is a trend across the country," said Rostov. "We're running out of the good stuff and using more of the dirtier oil."

Last month, Zuniga ruled that the project's environmental report was too vague about the types of oil that would be processed after the upgrade was complete.

Richmond City Councilman Jim Rogers said Thursday that the judge's ruling could finally bring the opposing sides to a compromise. Last year, he proposed that the project go forward under the condition that an independent party would sample air pollution near the refinery to make sure it didn't get worse after the upgrade. He plans to pursue that idea again.

"My feeling is, out of crisis comes opportunity, perhaps the opportunity for both sides to agree to monitor the air," Rogers said. "And if it's dirtier, then Chevron would not get to run the heavier, dirtier crude. They wouldn't have to rip out the machinery and scrap it, they just couldn't use the dirtier crude."

E-mail David R. Baker at dbaker@sfchronicle.com.