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HomeMy WebLinkAboutMINUTES - 11071995 - D1 TO: BOARD OF SUPERVISORS 0. / FROM: Mark Finucane, Health Services Director 1=� ;. Contra Costa DATE: October 27, 1995 County SUBJECT: Report on the September 27, 1995, incidents at Pacific Refining Company in Rodeo SPECIFIC REQUESTS)OR RECOMMMDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: Accept report from the Health Services Department on the September 27, 1995, incidents at the Pacific Refining Company (PRC) in Rodeo. BACKGROUND: On the morning of September 27, 1995, two incidents occurred at the Pacific Refining Company in Rodeo. Approximately 40 students and staff at the nearby Spectrum Center Schools were transported to emergency rooms with nauseau and other symptoms. All were released. At the Board of Supervisors October 24th meeting, Supervisor Smith requested a report from the Health Services Department. FISCAL IMPACT: None CONTINUED ON ATTACHMENT: YES X NO SIGNATURE RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON November 7. 1995 APPROVED AS RECOMMENDED X OTHER X See attached Addendtun for speakers. ACCEPTED the attached report frorn the Health Services Department; and URGED impleamentation of a fence-line monitoring-system and utilization-of a technical advisor to coordinate community notification of Pacific Refinery Company's gas releases. VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS (ABSENT--- ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. Contact Person: Elinor Blake (370-5022) CC: Mark Finucane, Director (HSD) ATTESTED_November -7, 1995 William Walker, M.D. (HSD) PHIL BATCHELOR,CLERK OF THE BOARD OF Wendel Brunner, M.D. (HSD) SUPERVISORS AND CO NTY ADMINISTRATOR Lew Pascalli (HSD) BY , DEPUTY 1 ADDENDUM TO ITEM D.1 November 7, 1995 Elinor Blake, Hazardous Materials Program, presented the staff report. The following people presented testimony on the matter: Denny Larson, Communities for a Better Environment, 500 Howard #506, San Francisco; Donald Brown, Oil, Chemical, and Atomic Workers, Local 1, Rodeo; Lynn Cherry, Rodeo Community Organization; Tom Stewart, Pacific Refining Company, Rodeo. The Board discussed the issues. Request to Speak Form ( THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. Name: v � L. D-/- Phone: j �s-Z q� 3 2 3 Address: 500SS S 1 am speaking for myself or organization: C 15 (name of organization) CH OwIsh to on It >IOate: 7�- z� speak Agenda My comments will be: g insL_. _ I wish to speak on the subject of _ t do not wish to speak but leave these comments for the Board to consider: Request to Speak Form ( THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. Name: Phone: Address: City: O_Zz 1� r�� d •G' 1 am speaking for myself or organization:Ga,,*46/�S Ac G l-3 (name of orpn�Zation) CH ONE wish to speak on Agenda Item ate: My comments will be: genual 1 wish to speak on the wNect of 1 do not wish to speak but leave these comments for the Board to consider: DATE: _� S REQUEST To SPEAK FORM (THREE (3) MINUTE LIMIT) 01 Complete this form and place it in the box near the speakers' rostrum befare addressing the Board. T� -7R9 Q r NAME: A)' PHONE: � -1 Cay: ADDREss: c'7 I am speaking for myself OR organization: NAME OF 0RGANiZ-\T1 \i Check one: _ 1 wish to speak on Agenda Item My comments will be: gen i for against I wish to speak on the subject of I do not wish to speak but leave these comments for the Board to con. . . CONTRA COSTA COUNTY HEALTH SERVICES DEPARTMENT REPORT TO THE BOARD OF SUPERVISORS OF THE SEPTEMBER 27, 1995, INCIDENTS AT THE PACIFIC REFINING COMPANY, RODEO On Wednesday, September 27, 1995, between 9:00 a.m. and 9:15 a.m. at Pacific Refining Company (PRC) in Rodeo,visbreaker naphtha was drained from a pipe. The naphtha contained 1%to 2%hydrogen sulfide and methyl mercaptan,which de-gassed from the naphtha on exposure to the air. Hydrogen sulfide and methyl mercaptan are acutely hazardous materials, and highly odorous. At about the same time elsewhere in the refinery a relief valve opened on an asphalt flux tank and steam and vapors were released. Asphalt is not acutely hazardous, but has a strong petroleum smell. At approximately 9:15 a.m., the refinery received a complaint of odors and of students feeling ill from the Head Start class on the grounds of Garretson School, located on the refinery's fenceline. This message was received on voice mail, as the school called the main PRC line, not the emergency line. The school decided to move the students away from the area. Students and staff at Spectrum Center School were also experiencing symptoms. The Rodeo-Hercules Fire Department also received the complaint from the Head Start class immediately following the call to PRC. The Rodeo-Hercules Fire responded to the site immediately, notified the Health Services Department (HSD) at approximately 9:30 a.m., and called again at approximately 9:40 a.m. HSD received a call from PRC at 9:45 a.m. notifying us of the incident. HSD arrived at the site at approximately 10:15 a.m. Staff also went to the schools and elsewhere in the community. Fifty two people went to emergency rooms for treatment of nausea and other symptoms. All but thirteen were staff or students of Spectrum Center School, and all were released shortly. The County's Multi-Casualty Incident Plan was put into effect so that patients were directed to hospitals throughout the county and no hospital was overwhelmed. HSD spoke with the Spectrum Center School director several times on the day of the incident, and on the day following to gather and provide information. HSD also spoke with Head Start officials to review the Community Warning System and the Shelter-in-Place program. HSD has received a 72-hour report from PRC, (see attached) and is continuing to interview PRC employees and investigate the incidents. On October 4, 1995, HSD convened a meeting of PRC representatives and a number of agencies that regulate the facility, including the States Land Commission, U.S. Coast Guard, District Attorney, Bay Area Air Quality Management, and Rodeo-Hercules Fire Protection District to discuss PRC's on-site plans for protecting community health through the Spring of 1996 and beyond, as the company continues to reduce its refining operations. (see October 6, 1995 HSD letter and PRC'S October 16, 1995 letter in reply, attached). At a follow-up meeting of PRC, 2 HSD, the Bay Area Air Quality Management District, and the Rodeo-Hercules Fire Protection District, PRC plant manager Paul Miller reviewed their process for assessing the risk of each operation that they carry out and decided what procedures to follow. He also reviewed in general PRC's plans for the next six months. Mr Miller agreed to provide the agencies with written monthly plans and to meet with us to go over them. A meeting was set for October 31, 1995, to review the November plan; similar monthly meetings will follow. HSD believes that this review and discussion will help prevent further incidents and provide us with information that will help the agencies respond quickly should an incident occur. Attachments a:\blake\prcrept.bos 10/27/95 FOLLOW UP NOTIFICATION REPORT A 72 hour follow up report was requested by Greg Lawler of the Contra Costa County Health Services Department at 1:30 p.m., September 27, 1995. Responses to the Contra Costa County Facility Incident Check List follow: • Contra Costa Health Services Department was informed of the subject incident at 9:44 a.m. on September 27, 1995 by Jeff Jakonczuk, an employee of Pacific Refining Company, 4901 San Pablo Avenue, Hercules, CA 94547. • C.A.N. was not activated. • For additional information regarding this matter please contact Paul Miller at (510) 799- 8001 and FAX: (510) 799-8042. • For a description of the events and quantities of materials involved, see attachment A. • For wind speed and direction data, see attachment B. • According to the BAAQMD, there were approximately 16 off-site odor complaints. • According to Contra Costa County Emergency Medical Services, 38 people were transported to hospitals. We are informed that several others also received medical attention. We believe that no one was admitted to a hospital. • The Pacific Refining "emergency operations center" was activated at 9:35 a.m. and closed at 1:30 p.m. on September 27, 1995. • Emergency Response teams responded to 545 Garretson Avenue, Rodeo, CA 94572. • Hazardous materials remain on-site. For further information in this regard, please see the business plan on file with Contra Costa County. • A list of sensitive receptors is included as attachment C. • As indicated above and in the attachments, one complaint was received by the facility and several others were received by the Bay Area Air Quality Management District. • For a list of other agencies that responded to this incident, please see attachment D. ATTACHMENT A The following is a description of the current understanding of events at the Pacific Refining Company facility on September 27, 1995. The times indicated are approximate. At 9:14 a.m.,an outside caller left a voice mail message that there was an odor at the Garretson School. At 9:15,a Pacific employee retrieved the message. The tone of the callers voice was calm and business-like. Pacific has a special odor hot-line which was designed to allow Pacific to respond quickly to outside concerns. This call was not made to the odor hoc-line. The employee who retrieved the message made line personnel aware of the outside call and they began looking for an odor source. By 9:30,several areas had been checked. Three potential sources were identified and were in the process of being addressed. Personnel continued to check for other possible sources. At 9:35,the Rodeo/Hercules Fire Department(RHFD) arrived at the refinery and opened the refinery's Incident Command Post. RHFD told Pacific Refining Company officials that: °two students had become ill at Spectrum School; °RHFD was responding to the school;and °RHFD had called the Contra Costa County Health Services Department(CCCHS)and that CCCHS was going to respond. Additional Pacific personnel were requested to report to the Incident Command Post and the agency notifications by Pacific began at 9.44. The CCCHS was the first agency to be called. Potential Odor Sources Investigated by Pacific Employees: A&dvities involving a vacuum truck: On Wednesday at 7:30 a.m.,a vacuum truck arrived at the refinery. The vacuum truck operator and a Pacific worker stared moving jet fuel with the vacuum truck The worker monitored the job and left the area. The worker checked on the vacuum truck a little while later. After the odor complaint was received, two people were dispatched to see if the vacuum truck was causing odors. No odors were detected. Acdvi 'es involving tank N3- Steam was observed coming out of the vacuum/pressure valves on tank 803 which contained a heavy hydrocarbon used in asphalt blending. The oil in tank 803 has been kept warm by pumping oil from the tank through a steam heater and back to the tank. The pump was shut down at about 8.30 a.m.to allow maintenance on the electrical supply system to the pump. The steam valve was pinched but not totally shut off. Steam may have leaked through the heat exchanger,into the pipes and into the tank after the pump was shut down. Probably, more steam leaked into the tank than the tank's vapor recovery system could recover and steam came out of the vacuum/pressure valves on the tank. The steam had come in contact with the heavy oil,however,it was white and appeared oil free when it left the tank. The lines into and out of tank 803 were blocked in at about 9:45 a.m. and the steam plume diminished rapidly(5 to 10 minutes). Activities including visbreaker naphtha M* At about 9:00 a.m.,workers began to blind a line connecting into the light slops line. A Attadirmnt A to PRC 72 hr repos for 9117195 worker-loosened the bolts on a flange and observed some liquid. The worker tightened the bolts, and requested that the line be depressured. A second worker depressured the line by opening a valve and letting about two gallons of liquid out of the line. At first,condensed water and diesel- like material came out of the line, then,VBN started coming out of the line. VBN is a naphtha with a heavy mercaptan, sulfurous odor. The worker closed the valve. To reduce the odor,he applied a deodorizing liquid and along with a third worker and washed the liquid into the closed oil recovery system. The workers didn't experience any adverse symptoms from the odor. The liquid was exposed to the atmosphere for less than 10 minutes before the liquid was washed into the closed system. The workers responded quickly and believed that they had prevented offsite impacts. Quantities of material involved: (1) We believe there was not a release from the vacuum truck- (2) ruck(2) We believe the amount of material from tank 803 was below the reportable quantity of any suspected hazardous material. The oil in tank 803 is heavy and not very volatile. (3) We believe that the amount of material from the blinding operation was below the reportable quantity for any suspected hazardous material. Pacific's Ground Level Monitor located at the Garretson School is sensitive to H2S and mercaptans. The monitor showed approximately 10 minutes of activity between 9:00 and 9:15 with a maximum reading of 6 parts-per-billion. The total volume of material associated with the blinding,of which only a portion was VBN,was less than two gallons. Atuch+neLK A to PRC 72 M cepco for 9/L7/95 SENSITIVE RECEPTORS Name Address Telephone* Distance (miles) Schools Garretson Middle School 545 Garretson Ave., Rodeo 799-4489 .15 St. Patrick's Elementary 7th St. at Vaqueros Ave., 799-2506 .4 Rodeo Hillcrest Elementary California and Mahoney St., 799-4431 .8 Rodeo Day Care Centers Atonda Turley 715 San Pablo Ave., Rodeo 799-1897 .35 Adventures in Learning Pre- 734 3rd 9t., Rodeo 799-6505 .4 school , C YMCA Child Development 200 Lake Ave., Rodeo 799-3122 .5 Center Patricia Burgess 918 Viewpointe Blvd., Rodeo 799-0458 .9 Doreen Van Der Baard 933 Sandpoint Dr., Rodeo 799-1290 .9 Karen Daniels 367 Newsury St., Hercules 799-4694 .9 Bayo Vista Tiny Tots 2 California St., Rodeo 799-4219 1.0 Nursery School Saundra Huston 945 Viewpointe Blvd., Rodeo 799-7631 1.0 Mary Alice Peoples 912 California St., Rodeo 799-3840 1.0 Bayo Vista Child and 545 Garretson Ave., Rodeo 799-4218 .15 Family Center, Inc. Montessori Children's 355 Parker Ave., Rodeo 799-5233 .4 House of Rodeo PACIFIC REFINING COMPANY Attachment D RESPONDERS TO THE INCIDENT COMMAND POST SEPTEMBER 27, 1995 Name _ Agency Captain .Biagi Rodeo/Hercules Fire Department A. Salmi Rodeo/Hercules Fire Department Chief Mike Radcliffe Pinole Fire Department John Eaves, Sgt. Hercules Police Department Sgt. M. Stevenson Hercules Police Department W. I. Imboden Hercules Police Department Ron Pilkington Bay Area Air Qualtiy Management District Dena Hutchin Contra Costa County Health Service Greg Lawler Contra costa Conty Health Service Art Gray _ Contra Costa Sheriff Sgt. John Dodd Contra Costa Sheriff Jeremy Kimbail Bay Area Air Quality Management District PACIFIC REFINING COMPANY 15 Minute Meteorological Observations For PRC Met Station Wind Max Wind Sigma Speed Gust Direction Theta Temp Precip Date Time mph mph * Deg Deg. OF In. 09/27/95 08:00 8.6 14.0 SW 216 13 64.8 0.00 09/27/95 08:15 8.4 15.6 SSW 205 12 65.3 0.00 09/27/95 08:30 9.2 13.5 SW 219 15 66.2 0.00 09/27/95 08 :45 8. 2 13. 1 SW 217 16 67.2 0.00 09/27/95 09:00 7.3 13 .5 SSW 212 14 68.2 0.00 09/27/95 09:15 10.3 14 .7 SW 215 15 68.0 0.00 09/27/95 09:30 12. 6 18.1 SSW 209 9 68.3 0.00 09/27/95 09:45 12.8 ' 18. 1 SSW 211 13 68.0 0.00 09/27/95 10:00 12. 1 17.4 SW 214 11 68.1 0.00 09/27/95 10:15 12.7 18 .6 SSW 206 12 67.5 0.00 09/27/95 10:30 11. 6 17.4 SSW 208 13 69.2 0.00 09/27/95 10:45 12. 0 17 .9 SSW 197 12 68.7 0.00 09/27/95 11:00 12.9 17. 9 SSW 208 9 69. 1 0.00 09/27/95 11: 15 13. 3 19 .9 SSW 204 14 69.5 0. 00 09/27/95 11:30 12.3 17 . 6 SSW 203, 11 69.5 0.00 09/27/95 11:45 11.8 17 . 4 SSW 200 15 69. 6 0.00 09/27/95 12 :00 12.4 18. 6 •SSW 195 16 69.8 0.00 09/27/95 12:15 12.8 18.3 SSW 200 11 70.2 0.00 09/27/95 12:30 12.7 19.0 SSW 207 11 70.5 0.00 09/27/95 12:45 13.3 19.0 SSW 202 12 70.3 0.00 09/27/95 13:00 12.4 18. 3 SSW 207 12 71.2 0. 00 09/27/95 13: 15 13.8 19 . 5 SSW 207 11 70.3 0. 00 09/27/95 13 : 30 •13.5 19 . 9 SSW 205 9 70.4 0_00 09/27/95 13 :45 11.5 17.0 SSW 203 14 70.9 0.00 09/27/9$ 14 :00 11. 0 18.8 SSW 212 12 71.4 0. 00 Avg/Tot 11.6 17. 3 12 68.9 0.00 Health Services Department •;' '; OFFICE OF THE DIRECTOR Administrative Offices A� ---- 20 Allen Street Martinez,California 94553-3191 Phone: (510) 370-5022 Fax: (510)370-5098 r'4 COUPS October 6, 1995 Pacific Refining Company Paul Miller Vice President and General Manager of Refining 4901 San Pablo Avenue Hercules, CA 94547 Dear Mr. Miller: Thank you for meeting with us and the several other agencies on October 4th concerning PRC's plans for ensuring the health and safety of the community during this period of reduced operations and, as Mr. Moyer expressed it, a change in the company's business. At the close of the meeting, we summarized action items that had resulted from our discussion. As part of our follow-up, I am listing those below. o PRC will notify the Bay Area Air Quality Control District 24 hours in advance of any de-gassing activities. o PRC will review communication issues highlighted by the incidents on September 27th, 1995, with the Rodeo-Hercules Fire Protection District and adjust procedures accordingly. o PRC will train your contractors on the County's Hazardous Material Incident Notification Policy, including training on how a contract employee can act to meet its requirements. o On the day of our meeting, PRC sent a letter to the community reminding everyone of the odor hotline. o PRC will notify the State Lands Commission and the Coast Guard when you plan to remove oil from the wharf lines. o PRC will inform the Fire District of who will be cleaning tanks and providing backup, and when, so that the District can properly carry out their role in the event of an enclosed space accident. o PRC will give quick consideration to providing our Department and other interested agencies with your monthly plan that includes management of change information, special procedures, written maintenance and operations procedures for ongoing work, and any other policies and procedures that will protect the community from health and safety risks. We agreed that any confidential information could be placed on separate pages and kept confidential according to our agencies' established procedures. A-345A (4,92) Contra Costa County I am sure that you recall the considerable discussion about the last item above. All of the agencies present (and the two unable to attend) have as our mission to foster the health and safety of communities under our respective jurisdictions. To do that well, we need advance information about the activities you are carrying out to maintain the value of your assets and the firm's capabilities. Such fundamental cooperation also provides some additional assurance to the community that the company is paying close attention to their well-being, and that government agencies have what is required for community protection. Our staffs are also available for consultation to you. We look forward to receiving this month's plan from you in the immediate future. Sincerely, Elinor Blake Special Assistant for Programs and Policy EB:vw cc: William Walker, M.D., Contra Costa County Health Officer Lew Pascalli, Contra Costa County Hazardous Materials Division Randy Sawyer, Contra Costa County Hazardous Materials Division Jeff Smith, Contra Costa County Supervisor Lon Wixson, Contra Costa County District Attorney Ralph Edwards, The Coastal Corporation Craig Moyer, Demetriou, Del Guercio, Springer and Moyer Attorneys at Law Dennis Salmi, Rodeo-Hercules Fire Protection District Alan Biagi, Rodeo-Hercules Fire Protection District Roy Mathur, State Lands Commission Jay Phelps, State Lands Commission Lane Johnson, U.S. Coast Guard Ron Pilkington, Bay Area Air Quality Control District Jim Guthrie, Bay Area Air Quality Control District Jim Karas , Bay Area Air Quality Control District Jack Bean, Bay Area Air Quality Control District Alan Friedman, Water Quality Control Board Patricia Barni, Department of Toxic Substances Control PACT FIC REFI N I NG COM PANY A Joint Venture of Sinochem and The Coastal Corporation Subsidiaries Paul L. Miller VICE PRESIDENT AND GENERAL MANAGER REFINING Elinor Blake October 16, 1995 Special Assistant for Programs and Policy Contra Costa County Health Services Department 20 Allen Street Martinez, California 94553-3191 Dear Ms. Blake: Thank you for your letter of October 6, 1995. Our highest priority is to maintain the well-being of personnel on-site and in the community. We agree that understanding Pacific's and the agencies activities is important and Pacific would appreciate your help in removing barriers to good communications. To facilitate communication with the community, after Wednesday September 27, 1995, Pacific has: - Briefed Pacific's Community Advisory Panel on the September 27, 1995 incident and described current and future activities. - Mailed 7,000 news letters to people living in Hercules and Rodeo. - Met with members of the Rodeo Citizens Association, answered questions concerning the September 27, 1995 incident, current status and future plans, and discussed implementation of pertinent element of the settlement agreement between us. Pacific would like to review the status of the action items from our October 4, 1995 meeting, which you listed in your letter dated October 6, 1995. Item: "PRC will notify the Bay Area Air Quality Control District 24 hours in advance of any de- gassing activities." Status: Pacific agrees to notify the Bay Area Air Quality Control District 24 hours in advance of tank de-gassing activities as outlined in Regulation 8, rule 5. Item: "PRC will review communication issues highlighted by the incidents on September 27, 1995, with the Rodeo/Hercules Fire Protection District and adjust procedures accordingly." Status: Complete Item: "PRC will train your contractors on the County's Hazardous Material Incident Notification Policy, including training on how a contract employee can act to meet its requirements." Status: Pacific agrees and will work with your staff to determine the details of such training. 4901 San Pablo Avenue Hercules,CA 94 54 7-2 100 (510)799-8000 FAX(510)7998042 TLX 910482-5481 Item: "On the day of our meeting, PRC sent a letter to the community reminding everyone of the odor hotline." Status: Complete Item: "PRC will notify the State Lands Commission and the Coast Guard when you plan to remove oil from the wharf lines." Status: Pacific agrees and will notify the State Lands Commission and the Coast Guard prior to removing oil from the wharf lines. Item: "PRC will inform the Fire District of who will be cleaning tanks and providing backup, and when, so that the District can properly carry out their role in the event of an enclosed space accident." Status: Pacific agrees and will inform and work with the Fire District Item: "PRC will give quick consideration to providing our Department and other interested agencies with your monthly plan that includes management of change information, special procedures, written maintenance and operations procedures for ongoing work, and any other policies and procedures that will protect the community from health and safety risks. We agreed that any confidential information could be placed on separate pages and kept confidential according to our agencies' established procedures." Status: Pacific is developing a plan in response to this request and will further discuss the details with you during our October 17, 1995 meeting. I look forward to seeing you on October 17, 1995. Please call me at (510) 799-8001 if you have questions. Sincerely, Paul L. Miller PLM/d xc: Jim Lopeman William Walker, M.D., Contra Costa County Health Officer Lew Pascalli, Contra Costa County Hazardous Materials Division Randy Sawyer,Contra Costa County Hazardous Materials Division Jeffrey Smith, Contra Costa County Supervisor Lon Wesson, Contra Costa County District Attorney Ralph Edwards,The Coastal Corporation Craig Moyer, Demetriou, Del Guercio, Springer and Moyer Attorneys at Law Dennis Salmi, Rodeo-Hercules Fire Protection District Alan Biagi, Rodeo-Hercules Fire Protection District Roy Mathur, State Lands Commission Jay Phelps, State Lands Commission Lane Johnson, U. S. Coast Guard Ron Pilkington, Bay Area Air Quality Control District Jim Guthrie, Bay Area Air Quality Control District Jim Karas, Bay Area Air Quality Control District Jack Bean, Bay Area Air Quality Control District Alan Friedman, Water Quality Control Board Patricia Bami, Department of Toxic Substances Control Gayle Bishop, Contra Costa County Supervisor REGENSI Why do so many old refineries dis gu NOV — 7 W S. refining industry for decades. my recently,has capacity utilization the landscape? Ask the.environm n � ARD OF SU rept up from 85% five years ago to CONTRA COSTA CO. 2%, and that's still not enough to enable most refineries to earn a con- alp on- sistent profit, says Salomon Brothers ei a �. energy analyst William Randol. In '. most industries companies would • simply shutter their least efficient plants. "But [in petroleum refining] nobody can afford to shut down,"wdible -d says Randol. By the way, those edible-dirt stan- dards aren't costing just the oil com- By Toni Mack panics big money. They apply to the U.S. Energy Department's closed I AsT YEAR Chevron Corp. Chairman er for environmental matters at Chev- bombmaking sites, where taxpayers Kenneth Derr agreed to sell two.oT. .ron's research unit: are liable for an estimated $230 bil- refineries for a combined $122 mil- "You,couldn't close a large old lion to -meet the law's ridiculous Eon, one to Sun .Co., the other to refinery for much less than$1 billion cleanup rules. Horsham Corp. (which may pay an-,..[in cleanup-costs]. Say you're losing A recent experiment at Amoco's other$125 million depending on fu- $100,000 a month running a refinery. Yorktown, Va. refinery shows how ture refining margins). The buyers You're.better off running it, hoping silly current rules are. Engineers from got a great deal.Building new refiner to reach break-even in. the future, Amoco and the EPA spent two years ies with the same capacity would have than to'close it and trigger big losses studying the plant's pollution and cost them at least$3 billion: . with no chance of recovering them." how it could best be controlled.Exist- Yet such are the distortions that In the.case reported here,Chevron ing regulations required Amoco to fit Environmental .Protection Agency:' sidestepped the problem. by selling the refinery's sewer pipes with $31 rules have imposed on the market;' the offending refineries. They will, million worth of benzene filters, but that Chevron actually saved itself lot however,continue running. Thus do the engineers found that only a little of money by almost giving away the environmental laws perpetuate.a ca- benzene leaks from the sewer pipes, refineries. Chevron didn't need them pacity surplus that has overhung the while a lot oozes from the nozzles and was losing money pumping refined prod- ori one of them. But ucts into barges.There dismantling the refin- the benzene could be cries would have cost . contained for $6 mil- Chevron as much as$2 lion-and the environ- billion in cleanup costs. meat much better By selling, Derr trans served. ferred much of the The Amoco York- cleanup liability to the town study was com- buyers, who can defer pleted in December the cost as long as the 1991. Politicians from refineries stay open. Al Gore to Bob Dole Nice deal all around. have praised the study. But why should it .' But Amoco still awaits cost$2 billion to close permission to imple- a couple of old refiner- meat the cheaper solu- ies with a market.value t` tions.Chevron just got under $250 million? tired of waiting. Because the 1984 Re- r•5 source Conservation& 4 Recovery Act amend- ments require a�haz- ardous waste.site,once , closed, to be-'scrubbed so thoroughly that a child could literally eat dirt in a.backyard built., on the site. Says Mark. Keller,,general manag- 112 Forbes r May 8, 1995 3y ° p"a '