Court greenlights Chevron’s Richmond refinery project

A California superior court has cleared the way for Chevron Corp. to proceed without further delay in executing its long-planned, $1-billion project to modernize operations at the company’s 257,000-b/d refinery in Richmond, Calif. (OGJ Online, June 6, 2014; Mar. 19, 2014).

In addition to the Bay Area Air Quality Management District’s (BAAQMD) reissuing of an authority-to-construct (ATC) permit for the project in February, California’s Contra Costa County Superior Court on Apr. 8 discharged a writ of mandamus and subsequent injunction that has halted construction on the project since 2009, according to Tom Butts, mayor of the City of Richmond.

With the reissued ATC permit in place and injunction now lifted, Chevron is free to proceed with construction on the project, Butts said.

The ATC permit and lifted injunction are two very important milestones on the company’s path to a newer, safer, cleaner, and modernized Richmond refinery, Chevron said in an e-mail to OGJ.

“We are beginning to update our engineering, procurement, and construction plans,” said Leah Casey, communications specialist for Chevron’s Richmond refinery.

The company also is working with the City of Richmond, as well as building and construction trade unions, to increase the pool of local residents with the necessary skills they need to be able to work on the project.

“If all goes well, field construction could restart mid to late 2016,” Casey said.

Once under way, the project will take about 2 years to complete, the company said.

A long road

Chevron’s attempts to modernize the Richmond refinery date back to nearly a decade, when in 2005, the company proposed a hydrogen and energy renewal project (HRP) at the plant (OGJ Online, Oct. 26, 2006).

In 2008, the City of Richmond approved the HRP as well as certified the HRP EIR, allowing Chevron to begin construction on portions of the original project, including a new hydrogen plant and hydrogen purity improvements.

In 2009, however, the Contra Costa County Superior Court agreed with environmental groups and area residents that the City of Richmond improperly approved the project’s original 2008 environmental impact report (EIR) on the grounds that it obscured project objectives and failed to adequately analyze potential environmental impacts that could result from the project’s implementation.

Chevron, which already had started construction on a portions of the original project after receiving all necessary approvals and permits in 2008, was forced to suspend construction activities, leaving the hydrogen plant and purity improvement portions uncompleted.

The California’s First District Court of Appeal in 2010 upheld the lower court’s writ ordering the 2008 EIR and construction permits be set aside, requiring the City of Richmond to officially vacate the 2008 project permits, according to documents available from Chevron.

In 2011, the company submitted an application to the City of Richmond for a revised refinery modernization project, reducing the overall scope of the original 2008 program.

The superior court’s Apr. 8 ruling follows a request from Chevron for dismissal of the 2009 writ and injunction after the city’s approval on July 29, 2014, of the final EIR, which complied with the writ’s requirement that the EIR must analyze the potential environmental impacts that could result from the company’s downsized plan for the refinery’s modernization (OGJ Online, Aug. 1, 2014).

Community investments

In addition to accepting an alternative, more environmentally friendly plan for the project proposed by city officials in the final EIR, Chevron also has tripled its environmental and community investment agreement with the City of Richmond to $90 million from an original proposal of $30 million (OGJ Online, July 22, 2014).

“For the $90 million in Richmond and North Richmond community benefits, Chevron plans to make an $11 million payment to the City of Richmond in June 2015,” Casey said, adding that additional payments will be made over the next 9 years.

The company’s proposed community investments will be used to provide area residents funding for career training, college tuition, local green initiative programs, greenhouse gas (GHG)-reduction programs, as well as grants for local nonprofit organizations and a 60-acre solar farm, according to Chevron.

The approved project

Referred to as Alternative 11 in the project’s final EIR, the environmentally superior Alternative 11 will limit the amount of sulfur that the Richmond refinery can process, ensure GHG emissions from the plant will not increase, and result in additional reductions in health risks as well as other emissions.

The modernization project will replace some of the refinery’s oldest processing equipment with safer modern technology meeting some of the toughest air quality standards in the US but will not change the basic operation or amount of crude the refinery can process.

Main components of the project include replacement of a 1960s hydrogen plant with modern technology that is safer, cleaner, and 20% more energy efficient, which will allow the plant to process higher-quality hydrogen more efficiently and reliably.

While the revised project plan will reduce by half Chevron’s initial proposal for increasing the refinery’s sulfur processing capacity, the amended plan still affords the complex flexibility to process crude blends and gas oils containing higher levels of sulfur while meeting safety and environmental standards, the company said.

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