Tuesday, April 27, 2010

Court: Chevron Richmond Expansion Is Illegal

by Robert Gammon
Tue, Apr 27, 2010 at 12:25 PM

For more than two years, Chevron maintained that East Bay environmentalists had filed a frivolous lawsuit against the oil company’s planned Richmond refinery expansion. Chevron even blamed environmentalists for allegedly costing the region much-needed jobs and hinted that it might shut down the Richmond facility if it didn’t get its way. But yesterday, the California First District Court of Appeal in San Francisco said the environmentalists had been right all along. Chevron's expansion plans, the court said, violated California environmental law.

Specifically, the appellate court upheld a lower court ruling that Chevron’s environmental impact report for the expansion was unlawful because it failed to adequately analyze the oil company’s likely plan to refine heavier, dirtier crude oil in Richmond. Chevron had maintained that it only intended to refine crude with a higher sulfur content that would not cause serious environmental problems after the refinery expansion. But the court noted that the oil company had disclosed to the US Securities and Exchange Commission in 2007 that it in fact did plan to refine heavier, dirtier crude. In other words, the oil company’s environmental report was misleading, if not downright false.

Chevron could appeal the ruling to the state Supreme Court, but its chances of winning look slim now that it has been thoroughly defeated at the state and appellate court levels. Or, the oil giant could just redo its environmental report in an honest fashion and hope the Richmond City Council approves it again. But this option also looks unrealistic because the council is no longer dominated by Chevron-friendly politicians like it was in 2008 when the expansion plan won a slim 5-4 approval.

The oil company’s other option is to seek a settlement deal with the environmental groups and the City of Richmond. Although Chevron has refused to make such a deal so far, it could solve the company’s legal woes and bring a lot of blue-collar jobs to Richmond. As for the threat to close the refinery, Chevron revealed earlier this year that it has no such plans because the old facility still makes money.

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