Richmond City Council approves Chevron's plan to upgrade refinery by 5-4 vote

Katherine Tam - San Jose Mercury News, July 17, 2008.

A divided Richmond City Council early Thursday morning approved Chevron's contentious plan to replace decades-old equipment at the local refinery, as well as a separate agreement for the oil company to provide $61.6 million for public safety, low-income healthcare and other services.

Environmental activists, who say Chevron's plans pose a public health risk that has not been fully studied, immediately shouted 'Shame on you!' from the audience and vowed to vote councilmembers out of office.

Councilwoman Ludmyrna Lopez defended the decision, saying a series of measures will require Chevron to cut emissions and other impacts.

"We are reducing the pollution that would otherwise be created by this project," Lopez said. "This is a responsible project."

The council voted 5-4 to approve Chevron's plan, with Mayor Gayle McLaughlin and councilmen Tom Butt, Jim Rogers and Tony Thurmond dissenting.

"This process has been an extreme disappointment," Butt said. "The EIR (environmental impact report) is an extreme disappointment. I found it to be shoddy, incomplete and characterized by incompetence."

The decision came at the end of a seven-hour meeting that adjourned at 2:10 a.m. Thursday. About 80 people both for and against the project remained in the audience when the vote was taken.

The City Council is the final authority on projects at City Hall, meaning anyone who disagrees with the decision would appeal through a court of law. City officials already are bracing for a potential lawsuit.

Proposed about four years ago, Chevron's bid to replace its power plant, hydrogen plant and reformer with newer equipment quickly became one of the most heated and emotional issues in Richmond. After multiple packed meetings, the Planning Commission on June 19 approved the project with about 70 provisions, including a restriction on the crude running through one piece of equipment regarded as critical in the refining process.

Neither Chevron nor its opponents were satisfied with the ruling and appealed it to the City Council, though for different reasons. The appeal began on Tuesday night with five hours of presentations and public testimony. It adjourned early Wednesday morning and resumed Wednesday night.

Refinery representatives say upgrading antiquated equipment would mean a safer, more efficient facility. It would allow the processing of a wider range of crude with higher sulfur content, while still processing the same light to intermediate crudes that is handled now.

"This project does not make a change with the crude we process at the refinery," said Tery Lizarraga, the refinery's health, environment and safety manager. "We will not process heavy crude. We are not configured to process heavy crude."

But opponents don't believe Chevron. A coalition of environmental activists argue that the project would allow the refining of heavier crude that would increase pollutants by 5 to 50 times. The state Attorney General's Office has raised similar concerns. The environmental impact report fails to address that and must be redone, critics said.

"There are so many unanswered questions," said Greg Karras, scientist with Communities for a Better Environment. "There's a lot more information we need. There's a lot more analysis we need."

While the crude oil was a major focus of the discussion, the 'community benefits agreement' also generated much debate. Under a proposed agreement submitted to the city Tuesday, Chevron offered to give $6.8 million for job training and placement; $11.3 million for public safety; $6 million to Brookside Health Clinic; $10 million in financial aid to local nonprofit groups; $5 million for the Bay Trail; $14.6 million for alternative energy projects; and $5 million for other environmental mitigations. The agreement would be contingent on approval of Chevron's upgrade project.

Butt and McLaughlin blasted the document. Some of the dollar amounts would not sustain services long term, they said, and others are crafted in a way that the community benefit is questionable. In addition, they said the agreement was negotiated between Chevron and some city leaders without full council or public input.

'It first came to public light 20 hours ago,' Butt said. McLaughlin described it as 'totally unacceptable.'

The council voted 6-1 to approve the community benefits agreement. McLaughlin voted no and Thurmond abstained. Butt, who grabbed his papers and walked out of the meeting just before the vote, was absent.