.Feature: Crude awakening

By Will Parrish

In recent years, oil corporations have intensified their push to make the San Francisco Bay Area and other areas of the West Coast into international hubs for refining and shipping of one of the world’s most carbon-intensive and polluting fuel sources: The Canadian tar sands.

In April, that long-standing effort spilled into Santa Rosa mailboxes. Constituents of 3rd District supervisor Shirlee Zane received a letter, addressed to Zane herself, from a group called Bay Area Refinery Workers.

“As a member of the Bay Area Air Quality Management District,” the letter read, “you’ll soon vote on a proposal that will impact our jobs, our refineries and the important work we do refining the cleanest gasoline in the world.”

It asked that Zane “please remember that the Bay Area refineries provide more good-paying union jobs than any private sector employer in the region.”

Twelve refinery employees provided signatures, but the letter was produced and mailed by an organization called the Committee for Industrial Safety, which is bankrolled by the oil giants Chevron, Shell, Tesoro and Phillips 66. According to state and federal records, each corporation annually provides the group between $100,000 and $200,000 to advocate on their behalf.

The letter’s apparent aim was to influence Zane’s upcoming vote on a little-known but potentially far-reaching Bay Area Air Quality Management District (BAAQMD) regulation called Refinery Rule 12-16 that’s aimed at reducing greenhouse gas (GHG) emissions. If enacted, the measure would make the BAAQMD the nation’s first regional air district to go beyond state and federal mandates in regulating refinery GHG emissions, the pollutants that fuel global climate change.

Zane is one of the BAAQMD’s 24 directors, along with elected officials from nine Bay Area counties extending from Santa Clara in the South Bay to Sonoma and Napa. They will determine the measure’s fate at a yet-to-be-scheduled meeting later this year.

Staff members at the BAAQMD have proposed four alternative forms of Refinery Rule 12-16. But only one has the support of a coalition of environmental groups and the unions that represent refinery employees: A quantitative limit, or cap, on GHGs.

Processing the tar sands would dramatically increase greenhouse gas pollution at the refineries under the BAAQMD’s jurisdiction, and advocates from groups like Oakland’s Communities for a Better Environment (CBE), an environmental justice organization, say an emissions cap would turn back what they call the “tar sands invasion” from the San Francisco Bay Area.

Critics warn that without the cap, the oil industry will continue pursuing new tar sands infrastructure on the West Coast at a frenetic pace. “We’ve seen them come at us at a 10 times faster rate in the last few years,” says CBE senior scientist and refinery expert Greg Karras. “Up and down the refinery belt, refineries are retooling for the tar sands and creating infrastructure for export of refined tar sands products overseas.”

Experts have warned of the effects of a significantly expanded production of the tar sands—a sticky mixture of sand, clay and bitumen trapped deep beneath Canada’s boreal forest. It would lock in dramatic increases in global temperatures and result in devastating impacts to ecosystems and human societies throughout the globe. A 2015 report in the journal Nature found that trillions of dollars’ worth of known and extractable coal, oil and gas reserves (including nearly all remaining tar sands and all Arctic oil and gas) should remain in the ground if global temperatures are to be kept under the safety threshold of 2 degrees centigrade that’s been agreed to by the world’s nations at the Paris climate summit last year.

In an ecologically minded region like the Bay Area, an emissions cap to stop a dramatic increase in regional tar sands production (and tar sands exports from local ports) might seem like a political no-brainer. But staff and some members of BAAQMD say they are concerned that GHG emissions averted in the Bay Area would simply occur somewhere else, since the oil industry would increase production elsewhere. Doing so would render Refinery Rule 12-16 ineffectual in curbing climate pollution because other regions might not be so attentive.

Karras and other advocates believe the opposite is true. The cap offers local elected officials a rare opportunity, they say, to make a significant contribution to heading off the catastrophic impacts of global warming.

Refinery row

The San Francisco Bay Area has been a core oil-refining area for over a century. In 1881, the Pacific Coast Oil Company opened California’s first refinery on the island of Alameda. Pacific Coast Oil Company went on to become Chevron, rated by Forbes as the world’s 16th wealthiest corporation.

In 2014, the Bay Area’s five refineries, including Chevron’s flagship Richmond facility, processed an average of 754,000 barrels of oil per day (45.5 percent of California’s production total) into gasoline, jet fuel, propane and other products. California, in spite of its reputation as a haven for tree huggers, is the third leading oil producer among U.S. states, much of it exported to surrounding states.

The Bay Area refinery corridor in Contra Costa and Solano counties constitutes the country’s second largest oil production center west of Houston. The largest is in Southern California, particularly the south Los Angeles areas of Wilmington and Carson, where the population is more than 90 percent Latino, black and Asian-Pacific Islander. Most people downwind of the Contra Costa and Solano refineries are also people of color.

As with the tar sands, some of California’s petroleum sources—including the oil fields in Kern County—are much denser than more conventional, lighter forms of crude. California refineries have developed a unique capacity to refine heavy crudes.

A little more than 8 percent of oil produced in the U.S. comes from the tar sands. Due to opposition to the Keystone XL pipeline, however, the tar sands industry has been unable to expand its production in the Louisiana–Texas Gulf Coast. Without the pipeline, say industry experts, it’s left to the West Coast to provide the infrastructure for the tar sands’ specialized production requirements on a large scale.

“The tar sands are potentially very cheap, and a lot of refineries in California are already optimized to process it,” says Joshua Axelrod, a policy analyst at the Natural Resource Defense Council (NRDC). Axelrod is a tar sands expert who co-authored a 2015 report called “West Coast Tar Sands Invasion.”

Oil consumption in Central and Latin America is starting to outstrip production, another factor driving the tar sands industry’s West Coast ambitions. California producers could make up the difference via shipments from nearby ports. The 2015 NRDC report concluded that West Coast tar sands refining could increase eightfold—from 100,000 barrels per day in 2013 to 800,000 over the next decade.

One argument in favor of the tar sands, repeated by most leaders of the Republican Party and some Democrats, is that greater tar sands production would wean the U.S. from oil sources in more politically hostile regions. Environmental advocates counter that the oil industry already receives more than $1.5 trillion in government subsidies, according to a 2015 International Monetary Fund study, that should instead be dedicated to low-carbon transportation and renewable energy.

Over a barrel

Growing public opposition has slowed the tar sands’ entry into the U.S. in recent years, including the grassroots campaign largely responsible for convincing President Obama last year to veto the Keystone XL pipeline. The pipeline would have carried tar sands crude from Canada to the Gulf Coast. Indigenous people in Western Canada have played a decisive role in delaying two pipelines through British Columbia that would enable large-scale shipments to Washington and California via tanker, barge and train.

In 2013, Valero announced its intention to bring large volumes of tar sands crude oil into Los Angeles and the Bay Area by rail, and applied for permits to the South Coast Air Quality Management District and the BAAQMD. The pipeline proposals were already in limbo, so the company saw railway shipments—up to 70,000 barrels a day, according to the company’s permit application—as an alternative. Both the Bay Area and Southern California air districts have granted the permits; the Benicia City Council is set to make a ruling on the Bay Area spur of the project sometime this year.

Phillips 66 already receives a small volume of tar sands via an elaborate delivery system that involves a railroad line to Bakersfield, truck deliveries to a pumping station and a pipeline extending between its refineries in Santa Maria and Rodeo, with the latter processing it into jet fuel. The company now proposes new Southern and Northern California rail projects that would bring a far greater quantity of tar sands to each facility.

Other possible projects include a Bakersfield rail hub that would bring tar sands crude to existing California pipelines and rail-to-ship projects in Portland and Vancouver, Washington.

A coalition of environmentalists and refinery employees have opposed the oil industry’s push to refine dirtier fuels. The tar sands are a major focus in their efforts, along with Bakken shale oil from North Dakota and other U.S. sources. Among the organizations are the Bay Area chapter of          350.org, the Sierra Club, the Asian Pacific Environmental Network, Richmond Progressive Alliance, CBE and Steelworkers Union Local 5—which represents 80 percent of the workers at three refineries.

While climate change impacts are a major focus of this opposition, these groups also oppose the threat that increased tar sands refining poses to public health. Oil refineries have imposed an especially large pollution burden on the low-income people and people of color who have been disproportionately forced, by historical and economic circumstance, to live alongside them.

The same combustion processes that release climate pollution also emit toxic effluents that cause cancer and neurological damage, as well as particulate matter that penetrates lungs and clogs arteries, as the federal Environmental Protection Agency and state and regional air districts have acknowledged.

In a conversation at a restaurant on San Pablo Avenue in southeast Richmond, CBE community organizer Andrés Soto, who has lived downwind of Chevron for most of his life, described his community’s struggles with cancer, autoimmune disorders and other health problems, and linked local struggles to eliminate pollution to the broader climate-change fight.

“You can either move and hope to get away from it, or you can try to fight back and try to help everybody’s lives,” Soto says. “And I’m not just talking about fighting for people in Richmond or Benicia or Martinez. Because of global warming, I’m talking about the whole planet.”

This merging of climate change and environmental-justice activism solidified following a 2012 episode when a crack in a steel pipe at Chevron’s Richmond refinery caused a fireball to ignite inside the facility. Nineteen workers escaped with their lives. For several hours, the flame was visible throughout the Bay Area. A toxic plume spread over Richmond and San Pablo, and prompted 15,000 residents to seek medical treatment.

In response, the BAAQMD proposed a set of refinery regulations geared toward monitoring refinery emissions and requiring further health studies. By 2014, the BAAQMD board of directors unanimously passed a resolution directing staff to “prepare a strategy to achieve further emissions reductions from petroleum refineries which shall include as a goal a 20 percent reduction in refinery emissions, or as much emissions reductions as are feasible.”

Three years after the Chevron fire, the U.S. Chemical Safety Board pinpointed managerial negligence as one cause. But the main factor was the refinery’s reliance on oil with high sulfur content, which caused rapid corrosion of the pipe. The tar sands contain even more toxic metals and chemicals than Chevron’s existing crude sources, as well as a higher concentration of sulfur,

the BAAQMD notes, and thus threaten more frequent spills, fires and explosions.

Frustrated by the BAAQMD staff members’ slow progress, numerous environmental groups demanded last year that the agency impose a refinery-wide numerical cap on particulate matter and greenhouse gases. The tar sands are more carbon-intensive and more toxic to refine than conventional crude. Tar sand bitumen is heavy and takes more energy than conventional crude to refine into usable products. The refining process also leaves behind large quantities of petcoke, the only fossil fuel the EPA regards as dirtier than coal.

The 2015 “Tar Sands Invasion” report noted that tar sands oil production causes about three times the carbon pollution of conventional crude, and that 800,000 barrels per day of the sticky substance—the amount the oil industry is pushing to bring to California in the next decade—equals the annual emissions of 33.7 million vehicles.

Meanwhile, existing BAAQMD regulations have reduced smog, but have failed to reduce emissions of very fine, extremely small particles, which are greatly increased in tar sands refining. Particulate matter is already causing an estimated 2,000 to 3,000 deaths in the Bay Area—it’s the region’s most lethal pollutant. Refineries are the largest industrial source of GHGs and particulate matter pollution alike, with refined products—namely, gas and diesel burned in vehicles—being the biggest source overall.

Yet BAAQMD staff declined to include the particulate matter emissions-cap proposal as part of Refinery Rule 12-16. Instead, they proposed four possible means of regulating GHG pollution: A refinery-wide emissions cap; limits on GHG emissions from specific pieces of refinery equipment; restricting refinery emissions of methane; and a two-pronged regulatory structure like the one in Washington state that requires refineries either to increase their energy efficiency or reduce GHG emissions by a set amount by 2025.

At a June 1 BAAQMD committee meeting in San Francisco, Executive Officer Jack Broadbent acknowledged that three of the measures would take years to study and implement. The only option that could happen quickly is a cap.

But Broadbent and other BAAQMD staff members were strongly critical of the cap idea and asserted that they had no legal authority to implement it. Staff member Eric Stevenson said in an interview that the biggest flaw in the emissions-cap proposal is that it would “cause production to go somewhere else to meet the demand in California, so that you don’t end up achieving an overall reduction in emissions.”

About 50 proponents of an emissions cap attended the meeting and several said the BAAQMD should adopt all four of the proposals. Some noted that the cap would be a first step in meeting the air district’s long-range goal of reducing regional GHG emissions by 40 percent by 2030 and 80 percent by 2050. Refineries are responsible for roughly 15 percent of Bay Area GHGs.

“It’s really absurd, in the truest sense of the word, that these folks from communities alongside refineries have to be here to implore you to not allow emissions to be going up in an era of declining emissions, and given what the air district’s job is,” said Jed Holtzman of 350 Bay Area. “Preventing an increase is part of reducing. If you know you’re going the wrong way, then arguing about how fast you’re going, or whether you know everything you could about your tires, is not a smart move, and it’s not what you’re here for.”

Tip of the cap

Ironically, one of the main bulwarks against the emissions cap so far has been the California Air Resources Board (CARB), the agency that implements California’s climate change programs. In a letter to the BAAQMD last September, executive officer Richard Corey flatly stated that “a local cap on Bay Area refinery emissions will have no effect on overall GHG emissions . . . Any emissions reductions from a Bay Area refinery cap would likely be compensated by emissions increases (also called emissions leakage) in other parts of the state. This emissions leakage would likely be associated with shifts in business activity outside the Bay Area.”

Corey’s reasoning is tied to a state-level greenhouse gas reduction program that applies to stationary pollution sources like refineries and power plants: Cap and trade. The program caps carbon emissions from these entities, with yearly reductions in allowable levels of pollution. From 2015 to 2020, for example, the cap is dropping by 3 percent per year.

But the program is aimed at providing maximum flexibility to the oil industry, so it allows them to buy credits, or offsets, from carbon-saving projects elsewhere in the United States, or in Quebec, or to sell credits themselves if they’ve reduced their own emissions.

Environmental-justice advocates have criticized the program for allowing polluters to buy their way out of reducing emissions at the source—and thereby allowing them to continue burdening communities with pollution. Chevron is a case in point. The company was California’s second-largest greenhouse gas emitter in 2013, according to CARB data. But it was also the largest purchaser of offsets under the cap-and-trade program in its inaugural two years between 2013 and 2014, according to a recent study by the Oakland-based California Environmental Justice Alliance.

The company used forests in Maine, Michigan, South Carolina, Willits and Humboldt County—and an Arkansas-based project to destroy ozone-depleting substances—to offset its pollution, which mainly occurred in Richmond. As a result, its emissions were undiminished. If the facility were to increase emissions through full-tilt tar sands processing, it could purchase additional credits. Another state program, the Low Carbon Fuel Standard, also creates an incentive to reduce at-source refinery emissions but does not require it.

The proposed Bay Area emissions cap would have no trading component. While some sources say that CARB may be reconsidering its stance, the oil industry’s chief regional lobbying group, Western States Petroleum, has seized on the agency’s current position. In a statement for this story, lobby president Catherine Reheis-Boyd noted that “if BAAQMD is considering a local greenhouse gas cap on refinery emissions, [Western States Petroleum] strongly encourages the District to take into account the California Air Resources Board’s concerns. CARB has clearly stated that a local cap will: (1) not reduce statewide GHG emissions; (2) reduce cap-and-trade efficiencies; and (3) undermine statewide efforts to reduce GHGs.”

Environmentalists describe these arguments as right-wing and defeatist. “Cap and trade is being used as a barrier to creating a simple limit on refinery pollution,” Karras says. “Tell me if their argument doesn’t sound a lot like what the Republicans are saying about why we shouldn’t have a climate policy, which typically goes something like, ‘China will just pollute more anyway, so we might as well get the economic benefits.’”

Big oiled

The oil industry has been California’s biggest spender on lobbying and elections for years, with much of their effort aimed at climate-change legislation, California secretary of state data reveals. California mandates GHG emissions reduction by 20 percent from 2005 levels by 2020. Last year, the state moved beyond that goal with SB 350, which requires that 50 percent of electricity generation must come from renewable sources, and that energy efficiency of buildings double, both by 2030.

In the run-up to the adoption of SB 350, oil companies unleashed a gusher of cash. The industry spent more than $31 million lobbying California legislators in 2015, according to data on the California secretary of state website. The effort appeared to pay off, as moderate Democrats agreed to strip a provision from SB 350 that would have required a 50 percent reduction in petroleum use by California’s cars and trucks by 2030.

Gioia says he has never seen anything quite like the industry’s recent Bay Area Refinery Workers mailer. At the June 1 BAAQMD meeting, he noted that it has become well known in Sacramento that the oil industry will attempt to pass legislation to limit the authority of local air districts if Refinery Rule 12-16 goes forward. Proponents say that a regional refinery emissions cap will enable the BAAQMD to fulfill its role in a struggle to starve the tar sands beast, and to stand up to the power of the oil industry. In that way, the agency would fill a regulatory gap not addressed by state climate programs, such as cap and trade and the California Low Carbon Fuel Standard.

But proponents say the cap is also a pragmatic approach to the tar sands invasion the Bay Area faces. The full BAAQMD board of directors will hear a staff presentation on Refinery Rule 12-16 at a San Francisco meeting on June 15. Expect it to be well attended. “Oil refining is the largest industrial emitter of GHG and [particulate matter] in the Bay Area,” reads a recent letter from 13 regional community groups who are tracking the tar sands invasion, “and yet refineries here have no facility-wide limits on these emissions, though other industries do. Keeping emissions from increasing would not require any change in current operations of any refinery.”

To read the full story, visit pacificsun.com.