Next legal battle nears for project at Chevron's Richmond refinery

By Katherine Tam
Contra Costa Times
Posted: 02/12/2010 09:14:42 PM PST
Updated: 02/12/2010 09:14:42 PM PST

Political maneuvering over Chevron's closely watched bid to replace equipment at its Richmond refinery continues as the project marches toward its next legal battleground.
Chevron, city officials and environmental groups are gearing up for opening arguments Feb. 23 before the California Court of Appeal in San Francisco. It could be weeks before there's a ruling.
Sacramento is wading into the fray. The Attorney General's Office is sponsoring a multipronged proposal — the product of meetings with the environmentalists with an eye toward reaching a middle ground with Chevron — that has rekindled hope of a settlement. State lawmakers organized a meeting in Sacramento in late January to try to help the parties resolve the dispute. Labor unions, hungry for the 1,000 jobs the project promises, are prodding the groups to negotiate.
The project in question is Chevron's estimated $800 million proposal to replace its decades-old power plant, hydrogen plant and reformer to refine a wider range of crude with more sulfur and produce more California-grade gasoline.
But a settlement that would skirt a prolonged and expensive legal fight has yet to materialize.
A second scheduled meeting with state lawmakers was canceled after Chevron declined. Chevron wants to go through the court-mediated process, which is confidential, said refinery spokesman Brent Tippen.
"We appreciate the interest Attorney General (Jerry) Brown and others have expressed in the renewal project," Tippen said. "We ask that they respect the ongoing confidential Court of Appeal mediation process."
The environmentalists have thrown their support behind the Attorney General's Office-sponsored proposal, even though portions of it depart from their original demands.
"We believe this proposal will protect the health of the community," said Will Rostov, an attorney for Earthjustice, representing the environmental groups in the appeal. "It's a significant compromise, a way to show we're willing to negotiate."
The Richmond City Council narrowly approved Chevron's project in July 2008 after heated public hearings.
Opponents argue that the project would open the door to processing heavier crude, which could increase pollutants by five to 50 times. Chevron disputes claims that its project may be a public health risk and said it will keep refining light to intermediate crudes, including more from the Middle East as supplies in the Alaska North Slope wane.
The West County Toxics Coalition, Communities for a Better Environment and Asian Pacific Environmental Network sued the city and Chevron. The environmentalists prevailed last year when a Contra Costa Superior Court judge found the project's environmental report was unclear on the issue of heavier crude production and stopped construction until the report is fixed. Chevron is appealing.
"It provides lucrative jobs to the community," Tippen said. "The project was properly analyzed and permitted, and should move forward."
Chevron's announcement last month that it intends to cut jobs in fuel production, retail and marketing operations has spurred fear and speculation that the oil giant might close its Richmond plant. Others say such rumors are a negotiating ploy and untrue.
Chevron has said it is "premature" to discuss refinery closures. The company is slated to release more details next month. The City Council on Feb. 23 plans to discuss what to do if the refinery, the city's top employer and taxpayer, closes.
Though the Richmond refinery has declined to talk about negotiations for its project, members of the environmental coalition say they have backed off an original demand for a comprehensive crude cap, which would set restrictions on various characteristics of the oil being processed.
Instead they're supporting the Attorney General's Office-sponsored proposal that would limit the crude's gravity, a numerical measure of how heavy or light oil is, to a level that they say would prevent the processing of the worst oils.
"We have a proposal on the table now so we're going to see if Chevron is serious about being a good neighbor and sign on the dotted line," said Henry Clark, head of the West County Toxics Coalition.
The Attorney General's Office-sponsored proposal also calls for more air and equipment monitoring; routine reporting of the characteristics of the crude being processed; the city to hire an independent expert, funded by Chevron, to analyze the data; replacing old boilers; and installing a combined 30 megawatts of solar panels at the refinery and on low-income homes in the city.
Katherine Tam covers Richmond. Follow her at Twitter.com/katherinetam.
IF YOU GO
·  What: Chevron, the city of Richmond and environmental groups will make opening remarks before the California Court of Appeal.
·  When: 9:30 a.m. Feb. 23
·  Where: 350 McAllister St. in San Francisco