Benicia seeks federal guidance on Valero rail
OREANDA-NEWS. Officials in Benicia, California, have delayed a decision on an embattled Valero rail project proposal for up to five months to seek clarification from federal regulators.
The Benicia city council on 19 April voted to delay a decision until as late as 20 September as they seek an opinion from the Surface Transportation Board on whether federal rail regulations preempted local control over land use involving a proposed 70,000 b/d railed crude unloading facility at Valero's 170,000 b/d refinery in the city.
"That is a precious decision-making ability that we have as a city and I wouldn't give that up easily," Benicia mayor Elizabeth Patterson, a project opponent, said before voting against the decision during the meeting. "I will go down fighting."
Valero appealed the city's February rejection of the terminal. The US independent refiner says that the planning commission's consideration of environmental and safety risks to the transport of crude, rather than the limited scope of the construction and operation of the rail unloading facility, was improperly broad. Federal laws preempt local control of what Valero ships by rail, the refiner argues.
The California attorney general countered last week in a letter submitted to the city that federal rules did not preempt such consideration.
"In fact, for Benicia to turn a blind eye to the most serious of the project's environmental impacts, merely because they flow from federally-regulated rail operations, would be contrary to both state and federal law," California attorney general Kamala Harris's office wrote in the letter on the argument.
The project approval decision has received considerable outside scrutiny, part of a broader debate over the use of rail cars to transport North American crude production. Refiners have sought rail facilities to increase their options for crude sourcing, even as arbitrage for railed crude deliveries to the east and west coasts fade. Benicia also takes crude by pipe and from tankers.
But rail unloading facilities on the west coast have faced years-long delays. Phillips 66 waits for a sixth day-long of hearing in May on its proposed 28,000 b/d unloading terminal in San Luis Obispo county for the southern plant of its 120,000 b/d San Francisco complex. Port commissioners earlier this month offered a tentative extension on more flexibile lease terms to Vancouver Energy, a Tesoro and Savage joint venture project proposing to unload 360,000 b/d in Washington, as that project waits through a third year of delays in what by statute should be a one-year state approval process.
Benicia council members in support of seeking the opinion of the Surface Transportation Board said they would not be rushed into an important decision.
"I've had threats of going to jail, to hell, and to not be re-elected," councilwoman Christina Strawbridge said during the meeting. "I'm not going to bullied into making this decision tonight when we don't have all of the information."