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Oil Companies Bet on Tar Sands, Against California Neighbors

Brant Olson

Posted June 12, 2013

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Oil's Rail Wager

A series of rail terminals proposed by California's biggest oil refiners could dramatically increase the supply of crude oil from the Canadian tar sands into the state,  potentially posing major health hazards to local communities. 

In recent weeks, ValeroTesoro, and Phillips 66 have all announced plans to build rail facilities that could eventually bring as much as 286,000 barrels of dirty oil per day from the Canadian tar sands into California refineries – roughly five 100-car trains full of oil every day.

Betting Against Communities

This dramatic increase of tar sands oil into California refineries poses a series of potential problems. Refining tar sands crudes creates more local air pollution and increased health consequences for residents near refineries than conventional crude. The highly corrosive nature of tar sands could also increase the likelihood for spills and accidents like the recent explosion at Chevron's Richmond Refinery, posing safety risks and exposure to increased toxic emissions for both plant workers and the surrounding community.

Refining tar sands also creates more carbon pollution than conventional crude, which puts these projects into direct conflict with the state's landmark clean energy laws. California's Low Carbon Fuel Standard (LCFS) requires oil companies to reduce the carbon pollution from gasoline and diesel 10 percent by 2020.  LCFS doesn't prohibit refining lower-quality crude oils, but by forcing refineries to ratchet down the average carbon content of fuels produced for California, it effectively creates a penalty for sourcing high-carbon crudes like tar sands.

The law has come under constant attack by oil and gas interests who have now poured more than $28 million into lobbying state lawmakers since 2011. For their investment, the industry has succeeded in placing a range of bills onto the floor of the State Legislature to either weaken or repeal the LCFS.

The First Hand

Valero is the first of several crude-by-rail terminals planned to connect California to Canada's tar sands

Benicia's Planning Commission decides whether to issue permits to the first of these facilities on July 11. Valero is proposing to build a new rail terminal to receive 70,000 barrels of crude oil per day at its refinery -- roughly two 100-car trains per day.  The Commission's preliminary environmental assessment of the project found no significant impact, but failed to address the potential of increasing air pollution caused by refining lower quality crude that would be potentially facilitated by the project. 

Oil companies including Valero should stop spending millions on infrastructure and lobbying aimed at increasing dirty oil supplies into the state, and begin investing in the alternative fuels and efficiency programs that are already moving California toward its clean energy goals. 

How to Get in the Game

  1. Demand due process for local communities. Benicia’s Planning Commission will decide on July 11 whether to green-light construction of Valero's project or require a full environmental review. Join local community members to demand a full assessment.
  2. Tell regulators to keep our skies clean. The Bay Area Air Quality Management District is asking for public comment on a new “Refinery Emissions Tracking Rule.” The rule would strengthen air quality monitoring and enforcement to prevent increased pollution from refineries no matter what crude they use.
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