Richmond to Chevron: We never wanted the project to die

By Katherine Tam
Contra Costa Times
Posted: 03/05/2011 03:13:34 PM PST
Updated: 03/05/2011 10:32:56 PM PST

Chevron's stalled plan to retrofit its Richmond refinery could be revived, more than a year after a bitter legal battle with environmentalists brought construction to a standstill.
City leaders are encouraging the oil company to apply for a new permit or an amended one this year to jump-start the project. The opponents wanted guarantees that pollution won't soar, but no one wanted the project to die, officials said.
"Cleaning up old refinery equipment, providing jobs and making the refinery more efficient and safer has been a common goal all along," Vice Mayor Tom Butt said. "There's really been no change in the ultimate objective."
The City Council last week unanimously approved a resolution encouraging Chevron to resubmit its plan, with Councilman Nat Bates absent. City Manager Bill Lindsay is expected to meet with Chevron to develop a permit process and timeline.
Repeated attempts to reach a settlement with a mediator -- and with state lawmakers nudging for progress -- failed to break the impasse before. Yet, city officials still think a project is possible.
A 2009 court ruling laid out where the project's environmental impact report erred, providing a road map for how to proceed, said Butt, who proposed the council resolution.
The parties were close to a settlement before, so a compromise is not out of the question, officials said. The landscape has also changed. The lawsuit is over; the environmentalists have won. The City Council has changed, with two new council members added. Last year, the city and Chevron ended a long tax dispute and averted an election battle over rival tax measures by negotiating a deal that provides the city $114 million over 15 years.
"We were able to reach common ground with taxes, maybe we can go ahead and do that again here," Councilman Jeff Ritterman said.
Chevron is considering how to proceed and sees the council resolution as a positive step, spokesman Dean O'Hair said. The refinery is looking for a clear, predictable permitting process.
"Chevron is committed to investing in the Richmond operation and the community," O'Hair said. "When you're investing in this type of project, we just need greater certainty."
Butt said it's incumbent on everyone to make sure the process doesn't drag on, adding Chevron provided incomplete information before or was slow to deliver information that was requested.
First pitched in 2005, Chevron's plan calls for replacing the power plant, hydrogen plant and reformer to allow processing of a wider range of crude with higher sulfur content and produce more California-grade gasoline. The project would employ about 1,000 workers.
Environmentalists argued the plan would allow Chevron to refine heavier crude oil, which would increase pollutants and harm the public. The state Attorney General's Office raised similar concerns. Chevron disputed the claim, insisting it would refine the same light to intermediate crudes it does now.
A divided City Council narrowly granted approvals in 2008 after multiple packed public hearings.
The West County Toxics Coalition, Communities for a Better Environment and the Asian Pacific Environmental Network followed up with a lawsuit and won. A Contra Costa Superior Court judge in 2009 found the project's environmental impact report was inadequate, including on the crude question, and ordered construction halted until the report is fixed. Chevron appealed unsuccessfully.
Crews were more than halfway done with the hydrogen plant and hydrogen purity components when construction stopped under the court order, O'Hair said.
The environmentalists told the council last week they support a refinery upgrade that protects public health and creates jobs.
"We got to work together. Chevron is not going anywhere and neither are we," the Rev. Kenneth Davis said. "Let them come in and be honest in their dealings with us."