Criminal investigation at Chevron refinery

Jaxon Van Derbeken

Updated 11:29 p.m., Saturday, September 22, 2012

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Jack Broadbent, executive director of the Bay Area Air Quality Management District, says Chevron was "routing gas through that pipe to the flare that they were not monitoring." Photo: Liz Hafalia, The Chronicle / SF
Federal authorities have opened a criminal investigation of Chevron after discovering that the company detoured pollutants around monitoring equipment at its Richmond refinery for four years and burned them off into the atmosphere, in possible violation of a federal court order, The Chronicle has learned.
Air quality officials say Chevron fashioned a pipe inside its refinery that routed hydrocarbon gases around monitoring equipment and allowed them to be burned off without officials knowing about it. Some of the gases escaped into the air, but because the company didn't record them, investigators have no way of being certain of the level of pollution exposure to thousands of people who live downwind from the plant.
"They were routing gas through that pipe to the flare that they were not monitoring," said Jack Broadbent, executive director of the Bay Area Air Quality Management District, whose inspectors uncovered what Chevron was doing and ordered the bypass pipe removed.
The U.S. Environmental Protection Agency's criminal enforcement unit opened an investigation in early 2012, more than two years after the local inspectors made their discovery, according to air-quality officials and others familiar with the probe. The investigation is still open, and Chevron employees have been interviewed.

Who knew what

Federal criminal investigators are trying to determine who at Chevron was aware of the bypass pipe and whether the company used it intentionally to deceive air-pollution regulators. Chevron says its use was inadvertent and that it estimates that the amount of released sulfur dioxide - one of the major components of flaring gas pollution - was minimal.
In a statement, Chevron said it was informed in March of a federal investigation "that appears to be related to flaring at the Richmond refinery." It said it was cooperating with the probe.
The chairman of the Bay Area air-quality district's board, Contra Costa County Supervisor John Gioia, said that if Chevron intended to deceive regulators, its actions raised "extremely serious" questions about the company's credibility.
"That's a criminal act, intentionally bypassing the monitoring," Gioia said. "The rule is designed to reduce flaring, and refineries are supposed have a responsibility to abide by it."
The criminal probe came to light after The Chronicle obtained citation data from the air-quality district under a state Public Records Act request, following the Aug. 6 fire that destroyed part of the Richmond refinery. The probe is unrelated to that blaze.

Health risks

The federal investigation centers on Chevron's burning, or flaring, of gases created during the superheating needed to generate fuels from crude oil. Although flaring burns most gases, environmental groups have long maintained that residual gases blowing away from the refinery pose a risk of cancer and respiratory ailments.
Under a 2005 settlement of a lawsuit filed against it by the Environmental Protection Agency, claiming that Chevron violated federal environmental rules, the company agreed to limit flaring at Richmond and its other refineries and account for each flaring event.
The Bay Area air-quality district, which enforces federal air standards, ordered Chevron to install monitors at the Richmond refinery to measure pollutants in the gases burned off during flaring, and to report all instances of flaring.

Spotted by inspectors

Wayne Kino, an enforcement manager for the air-quality district, said two inspectors with the agency became suspicious Aug. 17, 2009, when they saw steam from a flare coming from a high-pressure, high-temperature hydrocracking complex in Richmond called the Isomax unit, where 62,000 barrels of oil a day are converted into gasoline and jet fuel.
The inspectors asked to see Chevron's pollution-monitoring equipment, and discovered "it wasn't recording anything," Kino said.
Chevron had installed more than 100 feet of 3-inch pipe, linking the vessel where oil is processed to the flare tower, and bypassing two sets of monitoring equipment, Kino said. When an operator activated the bypass pipe, the gases were sent up the flare stack without being recorded.
Chevron said the pipe was designed to balance pressure in the refining process, but investigators could find no legitimate use for it, Kino said.

Bypassed 27 times

During a two-year investigation that involved examination of refinery surveillance tapes, Kino said, the air-quality district determined that Chevron used the pipe bypass 27 times from April 2005 to August 2009. He called the violations "very serious."
In August 2011, Chevron agreed to a settlement with the agency in which it paid a $170,000 fine for two violations. That same month, the air-quality agency renewed Chevron's permit for operating the Richmond refinery for five years.
In September 2010 - a year into the agency's investigation - Environmental Protection Agency officials expressed concerns that Chevron was flaring at the Richmond refinery as a matter of routine. The air-quality district, however, dismissed the suggestion.
"There is no evidence that the flares at the Chevron refinery are being used as control devices," the district said. It cited "flaring reports from this refinery covering the period from 2004 to the present show no instances of 'routine' flaring."
Kino said the agency official who wrote the response hadn't known about the investigation. He said the federal agency was ultimately notified of the violations in May 2011.
The environmental agency issued a statement saying it "does not comment on ongoing investigations."

Workers interviewed

Officials of the union that represents workers at the refinery said Chevron employees had been questioned by the environmental agency investigators.
"The union is aware that there is an ongoing investigation," said Jeff Clark, a field representative with the United Steelworkers Local 5. "Our members have been interviewed as part of it, and we cannot comment further at this time."
The investigators have also questioned air-quality agency officials about what they knew about the bypass system. Kino said his inspectors have cooperated with the criminal probe.
Gioia, the air-quality board chairman, said he was upset that the agency's staff didn't tell him and other district directors about the $170,000 fine before it was issued. The fine was the most Chevron has paid in the past decade for air-quality violations at the Richmond refinery.
"It's serious under any circumstances for a refinery to bypass the collection monitors," Gioia said. "It's a pretty large fine, and that means it's a large incident."
He added, "We have gone around as a district declaring that the flare-monitoring rule has been a success and has reduced emissions. But if we are not capturing all the emissions, it's hard to judge how effective it has been."
Jaxon Van Derbeken is a San Francisco Chronicle staff writer. E-mail: jvanderbeken@sfchronicle.com

Read more: http://www.sfgate.com/science/article/Criminal-investigation-at-Chevron-refinery-3886927.php#ixzz27JE8F4D5

Chevron fined $170,000 for not fully reporting polluting releases

By Mike Taugher
Contra Costa Times
Posted: 08/04/2011 02:34:29 PM PDT
Updated: 08/05/2011 06:19:13 AM PDT

RICHMOND -- Chevron has agreed to pay $170,000 to air quality regulators for underreporting pollution from the flaring system at its Richmond refinery.
A gas line at the refinery was sending gases to the flare stack in a way that bypassed the refinery's flare monitoring system. That meant that in flaring events on 27 days between 2005 and 2009, the company underreported how much pollution was released from the flare, according to the Bay Area Air Quality Management District.
Both Chevron and a spokesman for the air district said the amount of unreported pollution was not large.
"It was not deliberately done," Chevron spokeswoman Melissa Hollander said of the mistake that allowed one of the lines to bypass the monitoring equipment.
"As soon as it was discovered, it was fixed and reported to the air district," Hollander said. "We've been really dedicated to reducing our flaring."
Refinery flares are the highly visible flames that occasionally come out of tall stacks at refineries. They are meant to safely release pressure and prevent explosions. Flaring can be controversial when the gases released bypass pollution control equipment.

	CHEVRON RICHMOND
August 4, 2011   Dear Chevron Richmond Employees and Contractors, You may begin to hear media coverage regarding a settlement agreement between the Bay Area Air Quality Management District (BAAQMD) and the Richmond Refinery. I wanted to provide you with some additional information about the settlement, which addresses two notices of violation (NOVs) and a $170,000 payment to the BAAQMD. In August 2009, it was discovered that an intermittent amount of flow to one of our flares inadvertently bypassed a flow monitor, and the flow was not being measured as required by the BAAQMD. This portion of the system was immediately taken out of service, and a project was initiated to ensure compliance with the BAAQMD’s requirements. Additionally, we inspected all other Refinery flare systems to ensure that similar situations did not exist. We found none.  One NOV was issued because there was a flow of hydrocarbons to the flare that did not pass through a flow monitor during 19 minor flaring events between 2005 and 2009. We estimate that over the four and one half year period, the total emissions from these events was 219 lbs of SO2, which is a relatively small amount and would not be reportable quantities under current air quality regulations, even if it were a single event. The second NOV was issued because the potential to bypass the flow monitor was not identified in the Refinery’s Flare Minimization Plan.  Chevron takes this matter very seriously as demonstrated by the immediate and high level of effort and resources committed to immediately correct this situation.  This settlement should not distract us from our outstanding and ongoing efforts to reduce our flaring, which remains a key priority for the Refinery. Our flaring levels in 2010 were reduced by more than 96 percent from those levels recorded during the 2004 through 2007 time period.  According to the BAAQMD, the Richmond Refinery’s use of flares was the lowest of all Bay Area refineries in 2009 and 2010. Please direct questions or requests for more information to Mellissa Hollander at 510-242-4700. All the Best, Mike Coyle