Benicia Looks to Federal Regulators to Resolve Oil-by-Rail Controversy

Benicia’s City Council voted 3-2 Tuesday to postpone a decision on Valero’s plan to build a railroad terminal at its refinery near the Suisun Bay.

Chris Howe, health and safety director for the Valero refinery, said the company asked to delay the decision until the federal agency that regulates railroads provides some guidance to Benicia officials.

“I think they felt that they had a responsibility to be best informed before they made their decision,” Howe said.

Valero wants to build a rail terminal to connect the refinery to Union Pacific’s rail line and be able to bring in up to 70,000 barrels of crude a day.

Many residents in Benicia and officials in communities along the rail line oppose the plan, saying it poses too many environmental risks and increases the threat of injury or death from a derailment.

But three city council members said Tuesday it’s unclear whether they can reject Valero's oil-by-rail terminal without violating federal authority over railroads.

Vice Mayor Mark Hughes voted to give the Surface Transportation Board until Sept. 20 to weigh in on the question of federal preemption.

“I don’t like the fact that we don’t have some control -- or that somebody’s telling us we don’t have control -- of what goes on in or near our city," Hughes said. "But the fact is, this isn’t about whether I like federal preemption or not. The question is whether it applies to this project.”

Valero already imports crude by ship and pipeline.

“This project would provide us a third means -- primarily offsetting crude that we would have otherwise brought in by ship,” Howe said during a recent tour of the Benicia facility. “It doesn’t change any emissions from the refinery or our throughput here at the refinery.”

But opponents of the project say it would expose communities along the railroad to new and greater risks.

An environmental review finalized in January found Valero’s plan would have 11 significant and unavoidable impacts. Among them, worsening air quality, increased green house gas emissions and greater risk for injury or death from a train derailment -- like the 2013 oil train disaster in Quebec in that killed 47 people.

“I think it’s a foolhardy project,” said Jack Ruszel, who owns a production wood shop down the block from the proposed site for Valero’s rail terminal. “Their trains, which they’re requesting to come in, are going to cross my driveway four times a day.”

Valero plans to haul two trains a day -- pulling 50 tanker cars a piece -- through Sacramento and Davis on the way to the Benicia.

The Sacramento Area Council of Governments and Davis city officials have some demands for Valero and Union Pacific. They want the company to provide more training and resources for emergency responders and to load and transport the crude in the safest possible way, using the most modern tanker cars.

Benicia's Planning Commission cited many of those concerns when it unanimously denied Valero's permit request in February.

The oil company appealed the decision to the City Council and announced plans to petition the Surface Transportation Board to issue an opinion to resolve the controversy.

They also asked city officials to delay any decision on the project until the federal agency responds.

Valero’s attorneys have argued that any attempt to impose conditions on how the railroad operates -- even indirectly by opposing the oil-by-rail terminal -- violates interstate commerce laws.

California Attorney General Kamala Harris disagreed.

In an April 14 letter on behalf of Harris to Benicia officials, Deputy Attorney General Scott Lichtig wrote that federal preemption did not apply to a project proposed by an oil company -- not a traditional "rail carrier" as defined in federal law.

He wrote that the California Environmental Quality Act actually requires Benicia to consider all the foreseeable environmental impacts of Valero’s oil-by-rail terminal.

“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,” the letter says.

Benicia Mayor Elizabeth Patterson opposed delaying a decision on the Valero project.

She said three years of environmental review and public testimony on the risks the project poses to the health and welfare of residents provided enough information to reject it.

“If you’re suggesting the we should allow the Surface Transportation Board to make an opinion about the land use -- and that they could in fact preempt our authority in land use -- they've got a fight on their hands,” Patterson told the council.

Read the letter from the Attorney General's Office below:

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