Chevron Richmond touts economic impact to city, but skeptics wonder at what cost
By Robert Rogers
Contra Costa Times
Posted:   07/18/2014 06:26:14 PM PDT# Comments
Updated:   07/18/2014 06:29:16 PM PDT

RICHMOND -- Chevron's mammoth refinery leaves a footprint in Richmond far beyond its 2,900 waterfront acres. But whether that footprint gives the city a leg up or leaves it a step behind is a topic of fierce debate among residents and local leaders, one that has heated up again as the global oil giant pursues a $1 billion modernization project.
Tens of millions in Chevron tax revenue bolster the city's budget, providing police and other services that similarly sized cities in Contra Costa County can only dream about. Millions more are filtered to dozens of nonprofits and businesses throughout the city -- and to the company's favored political candidates each election cycle. Billboards throughout the city feature workers and well-known community leaders extolling the benefits of the refinery and its planned modernization.
While some local leaders laud Chevron as a financial bulwark for a long-struggling city, others -- most notably Green Party Mayor Gayle McLaughlin -- portray the refinery as an albatross whose contributions are outweighed by chronic pollution and fires that imperil residents' health and depress property values. Far from being a paragon of generosity, they say, Chevron has fought paying its fair share over the years, as evidenced by recent court battles to reduce its property tax bills.
The mix of money, oil, politics and culture has spawned entrenched backers and critics who differ over how the city should pursue policies that affect the company. Tensions have never burned as hot as they have since an August 2012 fire at the refinery sent plumes of smoke across the bay and thousands to area hospitals.
In the wake of the fire that drew a federal investigation and shut down the refinery's operations for months, the city took the unprecedented step of suing its largest taxpayer. The refinery's direct tax payments to the city amount to about one-third of Richmond's $134 million general fund budget; the decline in its property tax valuation that resulted from the fire blew a $6 million hole in the city's budget last year.
"Chevron and Richmond are like bickering, fighting spouses," Councilman Jim Rogers said. "But Chevron needs to understand that one spouse is going to be really pissed off if the other burns the house down."
Chevron and the city are engaged in a high-stakes chess game over the refinery's modernization project, a partial retooling of the facility that the oil company says is vital both to the health and safety of the community and to its long-term corporate fitness. The project, which city leaders hold significant leverage over thanks to a 1987 ordinance that requires the refinery to submit projects to city building inspections, has rekindled the complex discussion of just how important the refinery is to the city's health. The City Council is set to weigh the project Tuesday.
A 22-page report released earlier this year by Beacon Economics, which was commissioned by Chevron, found that between 2009 and 2013, the refinery's standard operations supported 3,600 employees as well as 500 additional jobs in West Contra Costa.
In addition, $5 million-plus in annual social investments generated another $7 million in revenue and supported 75 jobs in Richmond. The investments, focused on education and workforce development programs, have coincided with an improving employment picture in the city in recent years.
That money helps the city of 106,000 people fund vital city services, including a larger-than-average police department and robust code enforcement and crime-intervention programs that have helped drive down crime rates.
"One of the reasons we've had success in reducing crime is we have a funding base that allows for good staffing levels," police Chief Chris Magnus said. "It's just a fact that Chevron is a big part of that funding base."
The Richmond Police Department has 190 sworn positions, according to Magnus. Slightly larger cities such as Antioch and Concord have far lower general fund budgets and police forces of 89 and 147 members, respectively.
But the numbers don't quell critics in the city, making Richmond a far cry from the accommodating company town it was for most of the last century. Less than 10 percent of Chevron's 2,100 local workers live in the city, reducing the positive impact its payroll dollars could have on the local economy. At nearly $4 billion, the refinery represents one-third of the property value in the whole city.
"It should surprise no one that they have a major impact on the economy as well as public sector revenues wherever they do business, including Richmond," Councilman Tom Butt wrote in an email. "On the other hand, there are substantial costs to society from Chevron and the fossil fuels industry in general, and to Richmond in particular. Perhaps (the costs are) harder to explicitly quantify than taxes and jobs, but the overall impact could be huge."
The costs and benefits of Chevron's operations in Richmond, as well as the modernization project, depend in part on who you are and where you are, said Scott Anderson, senior vice president and chief economist for Bank of the West in San Francisco.
"If you live next door to the refinery, you might come up with a different answer than those who live farther away," Anderson said. "But the net benefits of the refinery and of its proposed modernization certainly do outweigh the costs for the Bay Area economy as a whole. From an economic standpoint, the project is a winner."
Anderson cited recent figures for the Bay Area -- excluding the South Bay -- showing $360 billion in economic activity annually, and noted that the proposed modernization was estimated at $1 billion in total spending, with 1,000 construction jobs.
"That's 0.3 percent of the Bay Area's GDP," Anderson said. "That's significant, so you can expect a nice multiplier effect from those dollars."
Chevron's philanthropy already has a multiplier effect each year in the community. Barrie Hathaway, executive director of the Stride Center, a workforce development nonprofit with locations in Richmond and San Pablo, said Chevron's support has helped his group provide technology training to hundreds of local residents in recent years and sustains more than a dozen jobs and paid internships at any given time.
Hathaway said Chevron has given his program $334,000 since 2011, a nearly fivefold jump from the prior three-year period. Similarly big numbers are sprinkled about to dozens of area nonprofits, including the Latina Center, which Chevron has given $287,000 since 2009.
But many remain skeptical of Chevron's true value to the community, and are especially put off by the refinery's all-out media blitz ahead of crucial city votes about whether to approve the modernization project, which critics say doesn't do enough to reduce pollution. Chevron has used its deep pockets -- although it won't divulge how much -- to fund community news websites and slick marketing campaigns that tout the refinery's benefits to the city, push the modernization project and pillory critics.
Hathaway said there are no strings attached to Chevron's investments in his nonprofit but did acknowledge that Chevron public affairs staff invites him and his workers to attend community events and support the modernization effort, which he has.
Although no comprehensive study has ever been done on the refinery's effects on the health of Richmond residents, surveys have found high rates of asthma and other respiratory illnesses in some nearby neighborhoods. Anderson, the economist, said the refinery drags down real estate values in the city but probably not as much as high crime and the poor performance of the school system.
"An oil refinery is good for your city's tax revenues," Anderson said. "But there are costs that come with it, and the costs aren't distributed equally."
·  The refinery accounts for $76.5 million in total economic output in the city per year, producing $16.3 million in local and state tax revenue.
·  465 additional jobs created in Richmond outside the refinery
·  $7 million in revenue and 75 jobs supported in the city through Chevron charitable giving
·  About $60 million in annual expenditures at vendors in Richmond
·  Chevron's directly-paid taxes constitute about one-third of the city's $134 million annual budget.
·  Employs 2,100 people in the city (10 percent of them are Richmond residents)
Sources: Beacon Economics and city of Richmond

Chevron running slick campaign to control Richmond
David Helvarg
Updated 5:40 pm, Friday, July 18, 2014

Black smoke rises from a fire at Richmond's Chevron refinery in 2012. Photo: D. Ross Cameron, Associated Press
Court is right that corporations are people and money is free speech, then Chevron is the biggest loudmouth in Richmond, where I live.
When people think of unlimited campaign spending, they tend to think of national elections, but the most insidious impacts may be taking place at the state and municipal levels. I know Chevron contributes to our local economy because it disbursed more than $2 million in city election campaign money since 2010, or roughly $50 each on me and every other registered voter in our small city of 106,000. The company provides jobs not only at its sprawling Richmond oil refinery but also for public relations, printers and a private detective who was hired a few years ago to smear the mayor.
Chevron wants to get rid of our Green Party mayor and progressive City Council majority because they've challenged the company on property taxes and pollution. That's why in 2012 Chevron spent $422,000 backing a single candidate for one of the seven council seats that pays $16,830 a year. The company wants to return to the days when the council majority was known as the "Chevron 5."
In August 2012, there was a fire at the refinery. I took pictures of the billowing black column of smoke while 15,000 other people went to local hospitals complaining of burning eyes, nausea and trouble breathing. Cal-OSHA fined the company close to $1 million for safety violations, and it pleaded no contest to a series of misdemeanor criminal charges. That is what corporations now do in lieu of anyone going to jail. I'll agree with the conservative majority of the U.S. Supreme Court that corporations are people when Texas places one of them on death row.
Now Chevron wants to assure me that things are better, and we should all be "Richmond Proud." That's the name it's given a multimillion-dollar PR campaign of billboards, T-shirts, tote bags, mailers, robo-calls, highly publicized charitable contributions, a local newspaper it created, and TV ads. Phase one of the campaign was all about being proud of our parks and waterfront and youth opportunities, which all expanded under the progressive City Council that Chevron wants to get rid of.
Then I attended a Richmond Planning Commission meeting on the company's billion-dollar refinery modernization plan, which the City Council could vote on this month. A contingent of folks showed up in blue and white T-shirts reading "A Modernized Refinery. Another Reason to be Richmond Proud." I couldn't help noticing that while 80 percent of the folks in the pro-Chevron shirts were white, 69 percent of Richmond's population is not.
Now in PR phase two, the billboards, TV ads and mailers are telling us how good this plant modernization will be for Richmond. Unfortunately, the $1 billion for the refinery upgrade will not be spent in the part of the facility that caught fire but on a hydrogen plant that will allow the company to burn higher-sulfur-content petroleum from places like Iraq. This could increase air pollutants 24 percent and greenhouse gas emissions 16 percent, by one reading of the company's environmental impact report.
Chevron, which will probably make barrels of extra money burning this "sour" oil, insists there will be no net increase in pollution, thanks to new and innovative approaches like carbon trading. But even reducing greenhouse gas emissions from an oil refinery is like reducing gun violence at the Colt firearms factory. It misses the point.
Richmond has double the childhood asthma rate of Marin County just across the bay. California is experiencing a historic drought and forest fires linked to climate change brought about by carbon pollution. It's become a product liability issue. Chevron's product, used as directed, overheats our planet.
When I asked the company how much it planned to spend in this fall's city elections (that would include phase three of their media blitz), I was told the company hadn't decided yet but would support candidates committed to public safety, job creation and other boilerplate.
Richmond Mayor Gayle McLaughlin didn't mince her words, however. "We get all their pollution not only in the air, but they pollute our elections, too. If they'd reduce their emissions and withdraw from our elections, they'd be respecting our health and democracy."
Of course, if they'd do that, then I'd be Richmond Proud of them, but I'm not holding my breath, although, living 2 miles from the refinery, I probably should.
David Helvarg is executive director of Blue Frontier, an ocean conservation and policy group. His latest book is "The Golden Shore - California's Love Affair with the Sea." To comment, submit your letter to the editor at www.sfgate.com/submissions/#1.

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