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From Contra Costa Times - Chevron Project Tied to Increased Dependence on Foreign Oil

The following appeared in today’s Contra Costa Times. Meanwhile, CBE and the other plaintiffs are meeting daily with Chevron and a mediator in an attempt to settle the lawsuit and allow the construction to continue in an environmentally responsible manner.

Chevron project tied to increased dependence on foreign oil

By Mike Taugher
Contra Costa Times

Posted: 07/14/2009 01:07:38 PM PDT

Updated: 07/14/2009 01:07:42 PM PDT


To understand why Chevron wants to retool its Richmond refinery, one can start by looking at two numbers: 5 million and 69 million.

The first is the number of barrels of crude oil brought into the refinery from foreign sources in 1986, nearly all from Indonesia. The second is how many barrels of oil the refinery imported last year, almost all from Saudi Arabia and Iraq, according to statistics kept by the U.S. Department of Energy.

As oil production in Alaska declined, Chevron and other California refiners that were heavily dependent on Alaska oil have had to buy more foreign oil to make up for the loss.

Finding crude overseas that has the same, easy-to-refine characteristics as the Alaskan oil for which the refinery is designed is getting more difficult and expensive, analysts said.

"As the Alaska supply goes down, they're looking for opportunities to increase their flexibility," said Joanne Shore, a senior analyst with the Department of Energy's Energy Information Administration.

Generally speaking, there are two characteristics of crude oil at issue: the amount of sulfur in it and its density.

Chevron insists it is seeking to refine only higher sulfur crudes. Because the project also includes installation of new sulfur removal equipment and better pollution controls, sulfur emissions are expected to decline significantly as a result.

Environmentalists, however, contend the company also intends to refine heavier crude oil and that this will increase emissions of toxins and other pollutants.

A consultant hired by state Attorney General Jerry Brown's office backed that claim, saying in a report last year that available crude oil is getting heavier all the time and the retooling project will allow the refinery to process it.

Chevron disputes that, but language in its massive, three-volume environmental study of the project was vague enough that Contra Costa Superior Court Judge Barbara Zuniga found it left wiggle room for the company to process the heavier crude.

But does it matter?

In theory, heavier crude can contain more toxic contaminants and, because it is thicker, it takes more heat to break down and refine. That can translate into more emissions of toxins and other pollutants, such as oxides of nitrogen, or NOx, that are produced by burning.

"The new furnaces are going to be firing harder, but they are going to be held to a much, much higher standard," said Greg Solomon, a senior air quality engineer at the Bay Area Air Quality Management District. "It's hard to see an increase in NOx (a pollutant associated with combustion) there."

Other pollutants will be controlled with permit conditions and monitored with new, state-of-the-art equipment to determine if those limits are exceeded.

A leading state energy analyst agreed.

"For a different kind of crude oil coming into the plant and all of a sudden there's going to be more emissions, they won't do that," said Gordon Schremp, a senior fuels specialist with the California Energy Commission.

Overall, the project is expected to reduce emissions of some kinds of pollutants and increase other kinds. Nitrogen oxide, an ingredient in smog, sulfur dioxide and particulates are expected to decrease, while carbon monoxide and volatile organic compounds, another smog ingredient, are expected to increase.

There's another pollutant of concern, too.

The refinery's emissions of carbon dioxide, which contributes to global warming, would increase by more than 50 percent.

"There is international scientific consensus that human-caused increases in greenhouse gases have and will continue to contribute to global warming," Chevron acknowledges in its environmental impact report, "although there is much uncertainty concerning the magnitude and rate of the warming."

But the judge found that the plan to offset greenhouse gas emissions was not specific enough.

Brown, who forced Chevron to address greenhouse gas emissions, said the company's plan to offset those emissions is adequate.

"We felt they had a good plan to mitigate," Brown said in an interview. "We think this is an important project. The efficiency of the plant is a good thing."

The project involves replacing old equipment, and under "new source review" regulations, the refinery is required to replace that equipment with the cleanest and most efficient pollution controls and monitoring equipment available.

"When you're taking out an old piece of equipment, there's definitely a plus for that," said Solomon, the air district engineer, adding, "Some pollutants are going to be an increase."

So, is the overall project a net plus or a net minus for air quality?

"That's a difficult questions to answer," Solomon said.

Mike Taugher covers the environment. Reach him at 925-943-8257 or mtaugher@bayareanewsgroup.com.