Chevron Banking on the Courts 

The company spurns Jerry Brown and environmentalists, hoping that a court decision will green light its proposed expansion of the Richmond refinery.

Three environmental justice groups that successfully halted a major overhaul of Chevron's Richmond refinery have discovered that the big oil company prefers the courtroom to the bargaining table. Last year, the groups convinced the Contra Costa County Superior Court that Chevron's environmental impact report failed to address a number of critical issues related to air pollution and greenhouse gas emissions. Chevron appealed the decision in July and has refused to negotiate outside of court for an end to the impasse — even after the environmental groups backed down on a number of their initial demands by agreeing to a proposed settlement from California Attorney General Jerry Brown.

Collectively represented by Earthjustice, the three organizations — Communities for a Better Environment, Asian Pacific Environmental Network, and West County Toxics Coalition — have grown frustrated with the oil giant's tactics. "They want to do this really quietly through a court mediation process, where they can slow down the process of finding a resolution," said Nile Malloy, Northern California program director for Communities for a Better Environment. "They are unwilling to entertain the attorney general's offer in any sort of way."

Chevron spokesman Brent Tippen would not elaborate on why the company had declined to negotiate outside of court. "We appreciate the interest of the attorney general and others that have expressed interest in mediating, but we ask that they respect the ongoing court of appeals mediation process," he said. "We believe that the court of appeals mediation presents the best venue for discussion."

Work began on Chevron's Energy and Hydrogen Renewal Project in September 2008 after it was approved by the Richmond City Council. Designed primarily to enable the refinery to process a wider range of crude oils, the project also calls for the replacement of 1960s-era hydrogen power plants and the construction of a 9.5-mile hydrogen pipeline connecting the new plant to the rest of the refinery. It does not allow for increased crude processing capacity.

Chevron's plan underwent a four-year permitting process and was reviewed by three independent consultants, as well as the Bay Area Air Quality Management District, Tippen noted. However, the environmental groups argued that Chevron's environmental impact report failed to account for increased pollution and greenhouse gas emissions that would result from processing heavier grades of crude oil. They demanded that Chevron provide a new report and not be allowed to process dirty crude. When the Richmond City Council approved the project, the groups sued both parties.

But through its endorsement of the attorney general's recent proposal, the coalition has softened its stance a bit. At the February 2 Richmond City Council meeting, the groups threw their support behind Brown's plan and encouraged the city to do the same. "The attorney general's proposal is way off from what we asked for," said Sandy Saeteurn, the Asian Pacific Environmental Network's lead organizer in Richmond. "We asked for a cap on expansion."

Now, however, she sees the concessions as a sensible starting point, and said her group would be willing to budge even further — if only Chevron would come to the table. "We're not trying to stop expansion," said Saeteurn. "We're just making sure that the city and Chevron are making sure they're not polluting the community even more than they are now. We are asking for pollution reduction in some areas."

The attorney general's plan contains provisions to increase energy efficiency at the refinery 20 percent by 2020; generate green jobs through the installation of 30 megawatts worth of photovoltaic power both on-site and in the surrounding community; and reduce air pollution by installing flare-prevention equipment, limiting the weight of incoming crude, and replacing a number of 1930s-era boilers.

The proposal came six months after Brown first offered to intervene. Chevron has balked at negotiations ever since. In December, its threats to downsize or leave Richmond, taking with it thousands of jobs and 40 percent of the city's tax base, suggested it wouldn't shy away from hardball tactics. At a January meeting in Sacramento hosted by Assembly Speaker Karen Bass and Senate President Pro Tem Darrell Steinberg, Chevron sent only a lobbyist. A follow-up meeting was postponed indefinitely because Chevron pulled out entirely.

"Chevron has not been fair in terms of trying to find a resolution," Malloy said. "We're just concerned that Chevron is trying to do some behind-the-door dealings and not focus on the real issue of putting people back to work and protecting the environment." The environmental coalition, meanwhile, has further strengthened its position by partnering with the labor group Contra Costa Building Trades and by earning support from the Service Employees International Union.

At this point, Chevron's next meeting with Earthjustice and the three environmental groups will likely not take place until February 23 in San Francisco, when oral arguments are scheduled for the appeal — and where Chevron seems to be banking on a victory. A decision from the appellate court could take up to ninety days. If Chevron does win, construction could resume immediately; if it doesn't, it may finally be forced to bargain.

"I've always advocated that this should be settled," said Richmond City Councilman Tom Butt. "Both the environmental groups and the attorney general's office have approved this plan, so I think it's got a lot of credibility. ... At this point if [they] could settle this thing and move on, it's probably for the good."

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