By LYNN DOAN
Valero Energys plan to unload as many as 70,000 bpd of
oil from trains at its Benicia refinery
will increase emissions
across California in a
significant and unavoidable way, a city report
Valero has applied to build a rail-offloading rack at the
plant northeast of San Francisco that would take oil from as
many as 100 tanker cars a day. The San Antonio-based company
delayed the project
s completion by a
year to early 2015 as it awaits approval from the city.
Project-related trains would generate locomotive emissions
in the Bay Area Basin,
the Sacramento Basin, and other locations in North
America, the city of Benicia said in an environment
al assessment posted on
its website. The city has no jurisdiction to impose any
emission controls on the tanker car locomotives; therefore,
there is no feasible mitigation available to reduce this
significant impact to a less-than-significant level.
Valero is proposing the rail spur as record volumes of oil
are extracted from North American shale formations that the
US West Coast has little pipeline access to.
Californias refiners are already bringing in the
biggest-ever volumes of oil by rail as they seek to displace
shrinking supplies of crude within the state and from Alaska.
A series of explosions and derailments of trains carrying
crude, including one in Quebec that killed 47 people in July,
touched off a flood of letters to the city of Benicia about
and compelled the planning
commission to put off a decision until an environment
al study could be done.
Regulators in both the US and Canada are imposing new rules
designed to improve the safety of trains carrying oil and a
group of California agencies released a report June 10
recommending ways in which the state should respond.
Earlier this month, the city council in Vancouver,
Washington, voted to oppose a proposal by Tesoro and Savage
to build a 360,000-bpd, rail-to-marine complex at the Port of
Valeros Benicia project
would probably result in a
spill of more than 100 gallons once every 111 years,
according to an analysis conducted as part of the citys
al report. The report
was prepared by researchers at the University of
Illinoiss Rail Transportation and Engineering Center in
Californias refiners received 557,315 bbl of oil by
rail in April, the most ever for that month, state Energy
Commission data show. Crude from Canada made up 45% of the
states total rail receipts. Oil from North Dakota
accounted for 22%.
Valero has described refining
in the western US as
a challenged market with margins close to
break-even when all of the regions plants are running
normally. Profits from the 132,000-bpd Benicia refinery
are particularly under
pressure, Joe Gorder, the companys president and CEO,
said in a presentation May 21.
The plant produces a significant yield of gasoline,
which, of course, weve seen the margins compressed on
and demand not be the greatest on, Gorder said at the
UBS Global Oil and Gas Conference in Austin, Texas. Sourcing
alternative crudes on the West Coast would increase the
economics out there for us substantially, he said.
Spot California-grade diesel has traded about 3.5 cents/gal
above gasoline in Los Angeles this year and averaged an
8.75-cent premium in 2013, data compiled by