Benicia officials embrace refinery regulations despite possible Valero lawsuit

BENICIA - Benicia officials expressed support for an ordinance that would regulate businesses like the Valero Refinery at a meeting Tuesday, despite concerns about possible legal challenges from Valero.

The latest draft of a proposed Industrial Health and Safety Ordinance that would monitor and audit “high hazard facilities” like the refinery was presented to Benicia City Council on Tuesday night. 

Numerous public commenters expressed strong support for the ordinance, which the council expects to take up for a vote in a few weeks. The council made a few last tweaks to the ordinance that has been developed over more than a year.

Councilmember Kari Birdseye suggested that city staff make two revisions: to mention all agencies by name that the ordinance might affect, and add language requiring transparency of how much the city has paid using collected fines from all relevant businesses. Staff will bring the ordinance back at a future meeting.

While Valero was the major concern, the ordinance would apply to at least 12 facilities in the city, such as Interstate Batteries at 535 Getty Court and the Benicia Water Treatment Plant at 100 Water Way.

Public interest in better regulating Valero was particularly pronounced on the heels of an incident Saturday at the Martinez refinery in Contra Costa County, which is about 7 miles from Benicia. A hydrocarbon material leak at the Martinez Refining Company caused a fire that injured six people and triggered a health advisory.

Valero has had its own recent controversies as well. The company didn’t meet Bay Area Air Quality Management District requirements to monitor and report fugitive gasses from their operating equipment. Its refinery has been the site of several air pollution incidents, such as a 15-year leak of 2.7 tons of airborne toxins, for which the refinery paid a record $82 million to the air district last year.

However, Mayor Steve Young said he doesn’t consider Valero worse than other large oil refineries in the Bay Area. 

“There are worse operators than Valero, as we just saw across the river,” Young said, referring to the Martinez Refining Company. “They are not the enemy, and they are not bad operators, but they obviously have some safety issues that we are trying to address.”

Benicia fire Chief Josh Chadwick said in a report to the council Tuesday that Benicia, as the only Bay Area city without an industrial safety ordinance, needs a program to better audit businesses producing potential health risks to nearby communities. 

Chadwick said that recent incidents at “high-hazard facilities” showed the need for additional oversight. “Especially given what happened over the last weekend, it’s really essential for the public to understand that no regulation is going to completely eliminate the risk of industrial incidents,” Chadwick said.

The ordinance’s third draft specifically requires that, following an incident at one of these facilities, the city may audit and inspect the site, and the company must issue an Incident Notification Report within 72 hours. The city would then be able to publish the final investigation report on its website, with the ability to issue consequences such as fines or other penalties if a business refuses to comply.

But enacting the ordinance may jeopardize a revenue source for the cash-strapped city. Under a voluntary cooperation agreement, Valero currently pays $331,320 annually to the city. Under the new ordinance, that agreement would be moot, requiring an independent consultant to help the city create a new fee schedule. And Valero will likely sue over the ordinance if passed, Young said, which is why he’s concerned about passing it without an agreement in hand. 

Councilmember Lionel Largaespada said he believes the city is entitled to strong regulations over industries working within its limits, but he advocated for tightening its language to be very specific about businesses and fees collected from them.

“Wherever we can be crystal clear about something, I think it only makes this ordinance better,” he said. 

Councilmember Terry Scott disagreed, saying the city has spent more than a year on the ordinance draft and Valero has already responded to it in “a fairly threatening manner.” 

“Local control matters. Many times we’ve asked them, ‘Come to the table,’” Scott said. “I think we can give them the opportunity in the next several weeks to send us another letter. Why do we have to go to them and establish another session to review the document with them?”

Birdseye also disagreed over whether to allow Valero to sit in on the independent auditing authority as a business owner given the potential conflict of interest. She opposed allowing Valero to have any influence, saying, “It is the fox in the henhouse.” 

Benicia officials have already heard lots of feedback from the public about the matter, including from 178 people who responded to surveys between March 25 and May 19. Many people turned out Tuesday night, speaking for more than an hour, with most pleading with the city to pass the new version of the ordinance. 

Some mentioned the potential for cancer and other health impacts which could result from toxic gas releases, while others pointed out how much stronger a safety ordinance can make local authorities seeking to protect and notify people as quickly as possible.

“This has been an issue that’s so important to Benicia,” resident Kathy Bennett said. 

She added that the Martinez incident Saturday reflected the importance of having a safety ordinance in place. 

“Because of there being an ISO in place in Contra Costa County, it did improve prevention and protection and responses, notifications and advisories to the community,” Bennett said. “And as we’ve also seen in the recent Los Angeles fires, an entire community can be destroyed in a single horrific event.”

“The big elephant in the room is Valero,” resident Diana Smith said. “But it’s been brought up that you have at least 12 facilities here that need that oversight. And Valero likes to come along and threaten us. How many millions of dollars would it take … to clean up that refinery?”

It is not yet clear when staff will bring the revised ordinance back to the council for a vote.

Editor's note: This story has been updated to clarify that no vote was scheduled for Tuesday's meeting, which was for informational purposes and to correct Diana Smith's name. ​​