Doubting Valero in Benicia
Last week, Valero’s stock dropped nearly four percent after the company announced that construction of its planned crude-by-rail terminal at its Benicia, CA refinery would be delayed by more than a year to allow time for the city to conduct an Environmental Impact Report.
During a city hearing on Thursday, Valero Public Affairs Director Chris Howe assured city staff and a room full of residents that “we agree this project deserves a full investigation.” But just a few hours earlier, CEO Bill Klesse (pictured here) complained to Wall Street investors about “groups that think we should do an environmental impact assessment just to build a rail siding”—not exactly a ringing endorsement.
There’s reason to doubt Valero’s other commitments too. Back at City Hall, Howe promised that the new facility “will reduce oil imports from abroad” and “lower emissions” of air pollution. But the public record shows little evidence to back up those claims, and the current market favors strategies that would have the opposite effect.
Reducing foreign oil imports would be speculative at best. Valero says railed-in crudes will replace marine terminal shipments. But Valero receives both foreign and domestic crude supplies at its marine terminal – mostly from Alaska. And since Alaskan crude is priced above foreign crudes, Valero would likely replace it first, not the foreign stuff. So much for energy independence.
Valero’s emissions claims are equally suspect. Harmful refining emissions are closely linked to crude quality. But Valero won’t specify the quality of crude that it intends to bring in via rail, stating only that it will be “North American.” Financially, all signs point to cheap, low-quality crudes from Canada’s tar sands. As NRDC’s comments to the city show, bringing in these crudes could significantly lower the refinery’s average crude quality, significantly increase harmful air emissions, and cause real health problems for Valero’s neighbors in Benicia.
By conducting a full Environmental Impact Report, the city chose to draw its own conclusions about these issues, and for good reason. This project is all risk and no reward for Benicia.