Oil Industry Blocks Effort to Increase Fines Against Polluting California Refineries … Again

California’s oil industry has once again quashed an attempt in the state Capitol to increase penalties on refineries that violate air quality laws.

It’s the fourth time in a decade that the industry has successfully killed or delayed such an endeavor.

The latest proposal was put on hold last week, just days before the Legislature finishes its work for the year on Sept. 14. Assemblymember Buffy Wicks (D-Oakland), who authored the bill, said the move was prompted by concerns some lawmakers would vote against it because it wasn’t weakened enough to satisfy California’s main oil industry group, the Western States Petroleum Association (WSPA).

“It became apparent that we were going to need more time to work on AB 1465 with our sponsor, the Bay Area Air Quality Management District, and with opposition groups who engaged us on the possibility of additional amendments,” Wicks said in an email on Friday.

WSPA represents the oil companies that own all of the Bay Area’s petroleum refineries. The region’s Chevron, Valero, PBF, Marathon and Phillips 66 plants have for decades produced gasoline and jet fuels that have powered major components of the region’s transportation sector. But they have also received hundreds of notices of violations from local air regulators in recent years, stemming from minor flaring incidents to severe accidents that forced nearby residents to stay indoors.

Those incidents prompted Wicks to propose tripling the maximum penalty amounts oil companies would pay when their refineries violate air quality regulations.

There are a variety of fine amounts refineries can face, but the general limit on those fines is currently $10,000. Environmentalists and some Bay Area elected leaders have described those penalties as part of the mere cost of doing business for companies like Chevron, which earned $6 billion in the second quarter of this year.

Wicks’ bill would increase the ceiling on fines to $30,000 per violation.

But WSPA has opposed any attempts to crack down on air quality violations.

And even before Wicks sidelined the bill last week, the industry group had already convinced legislators to significantly change the proposal several months ago by expanding its scope. Under the changes, the fines would also apply to dozens of industrial facilities that release chemicals into the air, including refineries, that are covered by Title V of the federal Clean Air Act. In the Bay Area there are dozens of such sites.

“There is no public policy rationale for singling out refineries,” wrote Shant Apekian, vice president of California policy and strategic affairs at WSPA, in a letter to Wicks in April.

While that complaint arose this spring, lawmakers did not amend the bill until June — and not everyone was happy with the change. Several industry and public agency associations, including the California Association of Sanitation Agencies, urged legislators to vote “no” on the bill.

“Unlike refineries, which are privately held for-profit corporations, public wastewater agencies provide an essential public service and all costs to the agency, including penalties, are borne by the rate-paying public,” the group wrote to legislators.

But even though lawmakers in the Senate approved the change, WSPA continued to fight against the bill. It’s a debate that has taken place behind closed doors — not in public committees.

In fact, the bill has sailed through all of its legislative votes and was headed for a full vote in the state Senate when, last week, Wicks abruptly asked that the proposal be moved to the “inactive file,” essentially scuttling any debate or votes until next year.

Those involved in conversations with Wicks and WSPA say that decision was driven by a push by the petroleum association to make the proposal effective only in rare cases — in WSPA’s words, only when “discharge results in a significant increase in hospitalizations, residential displacement, shelter in place, evacuation or destruction of property.”

But air district officials say that definition is too narrow, because refineries often violate air regulations in less extreme incidents that are still dangerous to human health. They argue the standard the industry is arguing for won’t actually provide a deterrent or change how refineries do business.

For example, last November the PBF refinery in Martinez released nearly 50,000 pounds of powdered, industrial chemicals, much of it landing on residential neighborhoods. The accident led to investigations by the EPA, FBI, Contra Costa County regulators and the air district.

Under the changes the oil industry wants to make, that release would not be covered by the proposed fine increases, local air regulators said.

“In our view, the purpose of the bill is to strengthen penalties for those types of events, not to protect them,” said air district spokeswoman Kristine Roselius, adding that the changes proposed by WSPA “would have provided an economic incentive to large facilities such as refineries, to downplay events as they were happening if they felt they could avoid higher penalties.”

If this kind of successful pushback sounds similar, that’s because it has happened every time a refinery fine increase proposal has emerged in Sacramento over the last decade.

Last year, just as another Wicks bill to do something similar was about to get a vote in the state Senate, she killed it because it was watered down so much that even the industry dropped its opposition.

In 2018, Sen. Bill Dodd (D-Napa) proposed tripling some of the most serious penalties for refineries. Amid opposition from the oil industry — and, on the other side, pushback from environmentalists and the mayors of Richmond and Benicia, who said the proposal wasn’t strong enough — that bill never even got a hearing.

In 2013, then state Sen. Loni Hancock (D-Berkeley) introduced legislation to raise such penalties on the heels of a major fire at Richmond’s Chevron refinery, the worst refinery accident in the Bay Area in the last few decades. That bill died on the Assembly floor, also after opposition from oil companies.

But even as the debate rages on in Sacramento, the problem for communities around these refineries persists. The day Wicks presented this year’s bill — at its final hearing before a Senate committee — the Contra Costa County refinery owned by PBF Energy released petroleum coke dust. Some residents described the dust as a “flaky ash.” The pollution came eight months after a much more severe chemical release from the same facility.

“This morning in Martinez, which I drive through on my way here, there was a toxic dust release,” Wicks said at the July 11 hearing. “This is happening in our communities all the time.”