Chevron's Spheres of Influence

Activists accuse Richmond oil refinery of illegally thwarting environmental reviews, and a beholden city of passing the buck.

September 25, 2002 (eastbayexpress.com)

The best view of the Chevron Richmond Refinery, according to community activist Ethel Dotson, who has lived in this city for fifty years, is from the top of the West Contra Costa Sanitary Landfill, which rises to a lopped-off mound just to the north. To get here you'll need $3 and a trunk full of garbage: Landfill operators don't welcome sightseers, and it's only after Dotson berates them from the passenger seat that the men in the office grudgingly dispense the low-price dumping permit.

From the top of this dusty, stinky, fake mountain, you can see almost the full spread of storage tanks, flares, and cracking towers, where crude oil is separated into salable chemicals. "Those are the ones," says Dotson, pointing down to a cluster of fourteen spherical tanks on stilts, like huge golf balls, each the size of a small house. These are liquid petroleum gas (LPG) spheres, and they're used to store the highly explosive by-products of the refining process.

ChevronTexaco wants to build two new spheres that would each hold as much as 30,000 barrels, fifty percent more than the current models can handle. The company says this expanded capacity is part of its routine maintenance to increase "operating flexibility" at the refinery. But the plant's neighbors are protesting, and in July the Oakland-based environmental nonprofit Communities for a Better Environment, or CBE, sued the Richmond City Council which, in June, gave the company a green light to build the spheres despite the lack of an environmental impact review.

The problem isn't so much the spheres themselves, the activists say, as that ChevronTexaco appears to be engaging in an illegal practice known as "piecemealing," in which a big project is divided into smaller ones to avoid environmental review. As a result, they say, plant neighbors will neither be privy to the impacts of the new spheres, nor will they be able to assess the cumulative effect of a host of related projects the Richmond refinery has planned. And people around here are all too accustomed to being kept ignorant about the work done in their midst.

The Dotsons, for one, have always lived downwind of something. In 1950, Ethel's parents moved the family from Louisiana, where they lived near a Conoco refinery, to Richmond's Seaport Project, a monstrous development built to house WWII shipyard employees. Among its neighbors were Stauffer Chemical, which produced sulfuric acid at its Richmond plant, and the California Cap Company, which produced explosives. The combination produced a noxious odor that "would just stink, stink, stink all around us," says Dotson.

In those days, residents concerned about the smell simply stayed indoors. With the local economy in decline following the war, environmental questions went largely unanswered. In the poorer parts of Richmond, near the big factories, residents didn't know what, exactly, was wrong with the air. They just knew it stank.

Industry operates differently these days, at least in theory. The 1970 California Environmental Quality Act, or CEQA, mandates that the developer of any significant project publish information about the project, study its environmental effects, and mitigate them if necessary. The law introduced a public-review process, a sort of official haggling period during which communities can demand conditions like job training, a health clinic, or tweaks to the facility design in exchange for the permission to build.

The law specifically prohibits piecemealing in order to ensure that projects are looked at holistically, and that things like overall air pollution, risk of accidents, or ways that a project can be made safer or cleaner are taken into account.

Richmond Chevron first filed its application for the spheres in June 2001. To the scientists at Communities for a Better Environment, it was a red flag: Refineries across the state are building LPG storage facilities, not to "increase operating flexibility," as ChevronTexaco maintains, but because they have to.

A new state law requires, among other things, that refineries replace the additive MTBE with cleaner-burning ethanol by the year's end. Ethanol has a higher vapor pressure than MTBE, and because there's a limit on how high the vapor pressure of gasoline can be, refineries need to take something out of the gas mixture to compensate. The solution is to remove pentanes -- a volatile byproduct of oil distillation. Where to put this explosive liquid? LPG spheres, of course.

To comply with the new law, nearly every refinery in the state plans to increase its pentane-storage capacity. Yet nearly all -- including ChevronTexaco's refinery in Southern California -- are completing environmental impact reviews for this and all the other state-mandated projects. So why, asked the local activists, was Richmond Chevron, one of the largest refineries in the state, avoiding a review process undertaken by its peers?

To the nonprofit, it looked like piecemealing. Most striking to CBE staff was that ChevronTexaco had admitted in a preliminary study that the new spheres were intended to help it meet the new state requirements. "In order to comply with new California gasoline regulations," the study read, "the refinery would blend fewer pentanes [which will] increase the refinery's need for LPG storage." The refiner then flip-flopped. The passage in question was "taken out" of the report, according to ChevronTexaco spokesman Dean O'Hair. The need for the spheres, he noted, was so the company could avoid storing the gases in railway cars, which are less secure.

Yet neither would it promise not to store the pentanes in railway cars anymore if the spheres were built. Eventually, Richmond leaders added a provision to the company's use permit stating that it could use the train cars only for "temporary storage, or when spheres are undergoing maintenance," a condition local activists say lacks teeth. Besides, says CBE staff attorney Adrienne Bloch, the math doesn't add up. "If they're going to clean out these 20,000-barrel tanks one at a time, why would they need two 30,000 barrels to accomplish that?" she says. "It doesn't compute."

A few days before the council approved the spheres, Bloch and CBE staff scientist Julia May turned up another ChevronTexaco permit application filed with Richmond, this one for an ethanol blending plant. It was another red flag: The new state law requires expanded ethanol production, and refineries across the state are also building ethanol-blending facilities. Unlike Richmond Chevron, virtually all are conducting environmental reviews of that, too.

At first, company officials were evasive. "[ChevronTexaco's attorneys] wrote a letter, I guess to the city, saying that that there would be no ethanol in the refinery," recalls councilman Tom Butt. "And when I questioned them about it, they refused to acknowledge that it was in the refinery. They gave an address on Castro Street [where the plant is located] and I said, 'Well, isn't that in the refinery?' And they said, 'No, it's adjacent to the refinery.' "

Digging through the company's permit applications, Bloch and May turned up a trove of other proposals -- for an alkylation plant, a Butamer plant, and expansion of its sulfur-processing unit -- all associated with state-law compliance, and all of which have been under environmental review at other refineries, including ChevronTexaco's Southern California facility. Still, the company claims that complying with the new law requires "no major changes" to the Richmond facility.

In a faxed response to questions about the piecemealing allegations and lack of environmental review for the new spheres, O'Hair said the company is confident the courts will rule in its favor. "ChevronTexaco believes the city of Richmond properly applied the requirements of CEQA in approving the LPG spheres at the Chevron Richmond Refinery," said the spokesman.

While both activists and politicians support the conversions associated with the new law -- who doesn't want cleaner gas? -- they also realize Richmond residents will pay the price. "For people next to the refinery, making cleaner gasoline is not a benefit," says CBE's May. "It means an expanded refinery; it means more air pollution, more water pollution, more solid waste."

When an earlier version of the law took effect a decade ago, "it cleaned up air emissions all over California, wherever Chevron sells gas. But it increased emissions in Richmond," says Butt. "I've always maintained that's fine, but Richmond should get something to compensate it for the additional emissions, the additional danger, the additional detriment to the city's reputation."

With the spheres, the greatest danger is that a malfunction could have a catastrophic domino effect. In 1984 in Mexico City, a ruptured pipe at an LPG sphere led to an explosion that killed 500 people. Such accidents are extremely rare, but that's one of the factors an environmental review would take into consideration: How much worse would a catastrophic explosion be, given an extra 60,000 barrels of fuel?

The more likely threat is simply that of increased pollution in an already polluted town. According to May, ethanol manufacture often creates water pollution. And expanded sulfur processing, another result of ChevronTexaco's proposed expansion, compounds the danger of an accidental release of hydrogen sulfide, a toxic gas.

A recent Environmental Protection Agency study found that oil refineries put more chemicals in Bay Area water and air than any other industry, and it named Richmond Chevron as among the top five offenders. In 1999, the plant accidentally spewed thousands of pounds of hydrogen sulfide and sulfur dioxide into Richmond skies. It took company technicians three to five hours to acknowledge the leak, the Contra Costa Times reported, and they didn't do so until residents called the police complaining of a rotten-egg stench and throat irritation. According to CBE, such incidents illustrate the need for a full environmental review process. "We want them to produce cleaner gas," says Bloch. "It's just that we want to see all the parts of the project so that we can see what the impacts are and where the appropriate mitigations might be."

But the city is conflicted. Richmond has always been a company town, incorporated four years after Chevron, then part of Standard Oil, broke ground on its Point Richmond refinery in 1901. Today, the refinery and adjoining research complex together employ about 2,700 people, making it Richmond's largest employer. The company also pays $17 million in local taxes each year, about fifteen percent of the city's general fund. For politicians, that makes it hard to say no. "By and large, Chevron has gotten whatever it wants from the city council for the last hundred years," says Butt.

All but two of the current councilmembers have accepted campaign donations from the company. They are Butt and Jim Rogers -- the latter voted for the spheres despite his claims that the company "spent a lot of money to keep me off the city council."

Butt says the city's sense of indebtedness keeps it from getting in the way of the company's plans. "There are two distinct worldviews of Chevron and its relationship to Richmond: One view is that Chevron is a huge taxpayer and a critical part of the Richmond economy.

"The other view," he says, "is that there are substantial downsides to having Chevron here in Richmond, due to the fact that they are heavy industry. It affects Richmond's ability to attract businesses and residents that could be a major part of economic development. And the portions of Richmond that are downwind of Chevron are handicapped in terms of future development because of the stigma that's attached to being downwind of a refinery."

The council imposed two conditions on the company when it approved the LPG spheres: Besides limiting use of the railway cars, it required that ChevronTexaco indemnify the decision. In other words, if the city got sued over the permit, as it has, the company would pick up the tab.

Add a get-out-of-jail-free indemnity clause to a case laden with eye-glazing technical jargon and, from the city's perspective, you've got two very good reasons to pass the buck to the courts. The whole process is a pretty good indication that nonprofits like CBE will stay busy in Richmond. Neighbors of the refinery, it seems, may have to depend on plaintiffs' attorneys. Butt calls the indemnity clause "good business," for the city, and indeed it is, but that's not the point. The more important concern is whether it's good government.

Instead of burdening taxpayers in affected areas with the costs of removing MTBE from their drinking water, Weitz & Luxenberg will aggressively go after the oil companies responsible. We want to do what is best not only for our clients, but for the environment and future generations as well. You have a right to clean, safe drinking water, and Weitz & Luxenberg is a powerful ally to have on your side. If you or your municipality needs our help, please fill out this simple form, call us at (800) 476-6070 or email us at clientrelations@weitzlux.com.

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