Suit challenges Richmond’s Approval of Chevron’s Refinery Project

San Francisco Business Times - September 5, 2008.

Three community groups sued the city of Richmond and Chevron Corp. and its subsidiary Chevron Products Co. to try and force the city to throw out the environmental impact report it conducted for a substantial upgrade project at Chevron’s Richmond refinery.

The groups, Communities for a Better Environment, the Asian Pacific Environmental Network, and the West County Toxics Coalition, asked the court to have the city withdraw the approvals and project permits it issued in July for the project.

The plaintiffs allege the city illegally certified the environmental impact report, or EIR, and issued a conditional use permit and a design review permit to Chevron Products Co. that will allow the refinery to process lower-quality heavy oil that is more polluting than the grade of oil currently processed there.

The plaintiffs allege 11 violations of the California Environmental Quality Act, including failure to provide an adequate project description, failure to provide a proper baseline for measuring polluting emissions, and failure to evaluate the project’s significant environmental impacts.

“We want a brand new EIR,” said William Rostov, an attorney with Earthjustice representing the community groups. “We want the project to be fully studied and the environmental impacts from the project mitigated.”

The multi-year, $1 billion refinery upgrade, dubbed the Energy and Hydrogen Renewal project, includes four major components and many smaller components. The main pieces of the upgrade include replacing a hydrogen plant, replacing a power plant, hydrogen purity improvements, and a new catalytic reformer. It would include replacing and building new storage tanks, new maintenance facilities and a new central control room.

The draft EIR did not address greenhouse gas emissions at all. The final EIR did include the fact that the project will increase greenhouse gas emissions by at least 898,000 metric tons per year, but gave the oil company a year to develop a plan to mitigate that increase in emissions.

A spokesman for the Chevron refinery could not be reached immediately to comment. Richmond Mayor Gayle McLaughlin could not be reached immediately to comment.

In a succession of hearings before the city planning commission and City Council, Chevron officials denied that pollution will increase as a result of the changes planned at the refinery.

After the city certified the EIR and issued conditional use and design review permits, both Communities for a Better Environment and Chevron appealed. Chevron challenged a number of conditions of approval that the city placed on the company as it issued the permits, saying some of the conditions were infeasible. Communities for a Better Environment, in its appeal, challenged the EIR as inadequate.

During a July 15 hearing of the appeals, Chevron presented a so-called Community Benefits Agreement under which it agreed to give the city $61 million over a number of years on the condition that the city issued it the necessary permits to go ahead with the project.

The terms of that agreement, signed on July 31, call for the money Chevron gives to the city to fund jobs, safety and education initiatives in Richmond. Some of the funding would go to hiring new police officers, and $14 million in funding would be provided for alternative-energy projects within Richmond over a five-year period, including alternative-energy projects at the refinery.

The suit challenging the city’s approval of the renewal project puts the community benefits agreement at risk, according to the agreement.

One provision of the agreement states that if a court sets aside the city’s approval of the renewal project for any reason except for a challenge by Chevron, then the agreement will be null and void and Chevron will owe no funding obligations to the city. During the length of the court challenge, however, the agreement will be deferred.