Refining the Chevron refinery

Mike Aldax, August 27, 2009, The Examiner, RICHMOND — Carl Grandin said the economy didn’t cost him his job — politics did.

While thousands of construction workers in the Bay Area are struggling to find work amid an epic building downturn, Grandin and his three sons said they were once confident they would have steady work at the massive Chevron Corp. oil refinery in Richmond.

The company broke ground in September on a $1 billion modernization of the century-old plant. The massive venture, called the Energy and Hydrogen Renewal Project, promises more than 2,000 jobs to the employment-hungry Bay Area.

The groundbreaking followed a four-year environmental-review process carried out by experts hired by the city of Richmond. It also received the green light from the Bay Area Air Quality Management District, which confirmed the upgrades would reduce the pollution the refinery produces.

However, a state judge halted work on the project last month after a lawsuit challenged the environmental report. Grandin, his sons and about 1,100 workers who were already employed on the project lost their jobs.

The construction workers’ hopes of returning to the work site hinge upon a common battle between environmentalists and business that is being waged in the worst possible economic climate. A resolution could take months.

Chevron Corp. said it wants to upgrade aging equipment at its 243,000-barrel-per-day refinery that dates back to the 1930s and ’70s. The upgrades will make the refinery more modern and less polluting, it said.

But a coalition of environmentalists and community members charges that Chevron has ulterior motives: prepping the plant to refine a denser, dirtier version of crude oil that they say will pump more pollution into Richmond’s air.

Much of the Richmond refinery’s light-to-medium crude supply comes from Alaska. However, as those supplies are reduced, the refinery might need to ship in heavier crudes from the Middle East.

The environmentalists filed a lawsuit against the project, saying the possibility of the plant refining a heavier crude was not clearly addressed in the environmental impact report. On July 1, Contra Costa County Superior Court Judge Barbara Zuniga ordered Chevron to halt work until the report addresses the claim.

Chevron has appealed the ruling, and the issue will likely be back in court this fall. Both groups have tried to reach a settlement behind closed doors, but the talks have not been fruitful.

The litigants say they will likely drop their claim if Chevron agrees to an enforceable cap on the density of the crude oil it refines in Richmond.

Chevron officials have not said they would agree to a cap, which they claim proposes a somewhat draconian limit. They also say they have neither plans nor the proper equipment to process heavier crudes. If they were to purchase that equipment, they say, they would have to go through another grueling permitting process with the air district.

However, Chevron insists that what matters is not what type of oil is being refined, but what refining such oil produces, according to spokesman Sean Comey.

If Chevron wanted to refine heavier crudes, it would have to install technology that would make certain emissions levels fall under strict state guidelines — which, if not followed, include strict penalties, said Dean O’Hare, Chevron plant manager.

An air district inspector works full time at the refinery to monitor emissions, and technology in the refinery can sense the slightest slip of nasty toxins, O’Hare said.

“We still have to meet the same stringent air quality requirements regardless of what’s being done in the refinery,” he said.

The reason Chevron has not agreed to a cap on crudes is that it would negatively affect the company’s ability to react to market conditions, O’Hare said. However, Chevron insists it has no current plans to refine heavier crudes in Richmond. It says the project that has been halted is up to snuff and that every day of delay only worsens the facility’s environmental impact.

Brian Bateman, director of engineering for the BAAQMD, said the project would include “some fairly significant reduction in [ozone-depleting] nitrogen oxide” emissions. Even under the highest possible production scenarios, any increase in pollutants “wouldn’t have a significant effect on public health,” Bateman said.

However, lawyers and scientists representing environmental groups say the environmental report does not, but needs to, directly address what effect refining heavier crudes would have on East Bay communities, if any at all. They want more than a corporate promise, said Will Rostov, a lawyer for Oakland-based Earthjustice.

“You need to identify the environmental effects first,” he said. “Then you can determine how to mitigate them.”

He said that “what comes [into the refinery] dictates what leaves.”

“We need guarantees that this project will not harm even more people in this community,” said Leonard Webster, Richmond resident and member of West County Toxics Coalition.

Meanwhile, fallout from the work stoppage has hurt the workers, according to unions. Those who lost their jobs have stormed Richmond City Council meetings to protest. Some are divided about whether the court order was the right call. But most are concerned about whether they will be able to feed their families and pay the bills, Grandin said.

“When you don’t make a lot of beans, you have to eat a lot of beans,” said the 57-year-old Antioch resident, who says his home is downwind of the Richmond refinery.

Richmond residents will also be hurt by the work stoppage.

Due to the court injunction, Chevron suspended an agreement in which it would provide $61 million to the city of Richmond over several years for city services. The funds would have been used to boost police resources, health and employment services and other city needs.

That would have been a great benefit to a city that has seen 10 homicides in just the last month and has an unemployment rate that is nearly double the national average, said resident Antoine Cloy, also an out-of-work construction worker.

“We’re starving,” Cloy told Richmond lawmakers at a recent council meeting. “Our kids are being locked up, police is getting cut, [city government] is going to get cut. Everything we get in Richmond comes from Chevron.”

But environmental groups say the health of Richmond’s citizens will not be bought, no matter how much the $61 million would help the city.

What Chevron says
The project will replace existing equipment with newer, cleaner technology that uses less energy and lowers emissions.
The project was greenlighted by environmental consultants hired by the City of Richmond.
The Bay Area Air Quality Management District has confirmed that overall emissions would be reduced, and it approved permits for upgrades.
The project could create more than 2,000 jobs.
Due to the July court order, more than 1,000 people were laid off.
Chevron has agreed to provide $61 million in community benefits to the city of Richmond for carrying out the project. That agreement has been suspended due to court order.
What environmentalists say
The Chevron project is a refinery expansion in disguise.
The project could allow processing of heavier, dirtier crude oil that could increase pollution.
The company publicly refused to agree to a cap on heavier crude oil to be refined on site.
The project’s environmental report is fully inadequate in identifying potential impacts.
Children in the Richmond community are hospitalized for asthma at almost twice the rate of children in the rest of Contra Costa County.
Chevron should commit to not worsening the refinery’s impact on community health in a manner that the company can be held liable if that happens.
How refining is done
The essence of oil refining is converting crude oil into higher-value products.

To convert heavy fuels to usable transportation fuels, the refinery must conduct a process called “cracking,” which essentially breaks down large molecules into smaller molecules. Chevron Richmond Refinery uses two cracking units:

The fluidized catalytic cracking unit: Cracks the heavy fuel into gasoline.
The hydrocracking unit: A catalytic cracking unit patented by Chevron to create gasoline and jet fuel. Molecules in this process are cracked, but not ready to power vehicles.
By the numbers
Richmond’s long history with the Chevron refinery is far from over.

Built: 1902
City of Richmond incorporated: 1905
Size of refinery property: 2,900 acres
Refining capacity: 240,000 barrels of crude oil per day
Refining capacity in 1902: 10,000 barrels of crude oil per day
Central focus: Converting crude oil into transportation fuels — gasoline, jet and diesel — and lubricating oils
Current refinery jobs: More than 1,000
Refinery jobs in 1902: 80
Population of Richmond in 1905: 200
Current Richmond population: Approximately 104,000
Jobs proposed for refinery upgrades: More than 2,000

Energy and Hydrogen Renewal Project
Moves for modernization at Chevron’s century-old plant:

Major components of the $1 billion project

Hydrogen plant replacement
Power plant replacement
Catalytic reformer replacement
Hydrogen purity improvements
Project objectives as identified in the environmental impact report

Replace existing facilities with modern facilities providing improved reliability, energy efficiency and additional environmental controls.
Decrease the amount of energy imported by refinery.
Ensure refinery’s ability to process future crude and gas oil supplies.
Increase percentage of refinery’s total gasoline production that can meet California specifications and be distributed at local markets to 300,000 gallons per day or 6 percent more than current refinery production levels. (The project would not increase refinery use of crude oil beyond currently permitted levels.)