Deep Dive
Shownotes Transcript
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From KQED. From KQED in San Francisco, I'm Alexis Madrigal. Last month, oil giant Valero announced it would idle, restructure or cease operations at its Benicia refinery by the end of April 2026. The news left city officials, workers and residents scrambling to figure out what to do next. Valero is the city's largest employer and a significant taxpayer, but also a source of pollution.
The community has known that the refinery would shutter eventually as California and the world transition away from fossil fuels. We're going to talk about the possible closure and what it means for our region. It's all coming up next after this news. Welcome to Forum. I'm Alexis Madrigal.
Refineries like the Valero facility in Venetia are a necessary part of the fossil fuel economy. They take crude oil inputs and convert it into the variety of products we actually use, gasoline, jet fuel, and some sludgier things. Along the way, they make and use intermediate products like hydrogen to complete the chemistry of turning crude into fuel, and they vent some things into the atmosphere.
This background is important because the Valero facility, which the company announced plans to close by April 2026, had been hit with a huge fine for emitting contaminated hydrogen gas as part of its processes. The company didn't admit fault, but did agree to pay an $82 million settlement just last October 2020.
Now they're saying they're going to exit Benicia. All this to say local economic concerns are running up against local and global environmental problems here. There's lots to talk about. And joining us this morning, we have Julie Small, reporter here at KQED. Welcome, Julie. Thank you. We have Josh Sonnenfeld, senior California strategist with the Blue Green Alliance. Welcome, Josh. Thank you very much. And we've got Steve Young, mayor of Benicia. Welcome, Steve. Morning.
Julie, let's start with you. What did the company specifically say about their plans for April 2026? Because it feels like there's some wiggle room in there. Oh, yeah. I think they left it very – they left all their options open. They said they're going to either idle, restructure, or cease operations at their Benicia refinery. Yeah.
And since then, they've said that they're speaking to the state. They're open to a dialogue. They've kind of backed off the, you know, we're out of here rhetoric. But they also said on the earnings call recently that their intention is to close. You know, we actually have...
Well, we'll listen to it. We'll listen to it later. Well, let's let's go to Steve first. Mayor Young, you've been mayor for five years. You've been in city government for more than 10. I think you were planning commissioner all the way back 2013. So were you surprised by the Valero announcement? I was. I did not expect something of this magnitude with this short of a timeline.
If they were going to close, I was thinking or hoping that there would be at least, you know, three years notice to allow the city to calibrate the impacts that it was going to have and try to start addressing them. But a year is not much time. Why would it be easier to take three years instead of one? Well, because of the impact on the on the community and on the city's budget.
It's going to be an immediate hit of about $10 or $12 million on a budget, a general fund budget of about $60 million. And that number of $10 or $12 million could be on the low side because we're not exactly sure yet what the impact is going to be on other businesses in the industrial park for whom Valero is, if not their sole client, their major client. So there's a lot of other opportunities.
that will be affected by this and the downstream impacts on our local restaurants and hotels will also be significant. Hmm. Hmm.
Are most of the people who work in the refinery Benicia residents or is it's mostly people from outside the city? So it won't be, you know, that's something that we don't really have a handle on. It's a question that we've asked and that we're hoping to get a response from Bolero. I'm going to guess that it's not a majority, certainly maybe a quarter at most because, you know, but each is a fairly expensive place to live. And although refinery workers are well paid, a lot of them, I believe are coming in from outside the city limits.
Julie, this refinery in particular has been involved in environmental regulatory action stretching back for years. I mean, it's been there, I think, since the late 1960s. That's right. Can you tell us a little bit more of its environmental history?
Well, I'm mostly aware of its most recent environmental history. You know, before it was – the refinery was built by Humble Oil, which became Exxon, which sold to Valero. But in recent years, as you mentioned, that huge find that the company received from the Bay Area Air District, such a significant find because it wasn't for –
excess emissions for one day or a month or even a year. It was excess emissions that went on for years.
until it was discovered by the Air District. And then even then, there was a delay until they told the city of Venetia. So all that has really created, destroyed, I think, a lot of public trust in the company and in the refinery. Although if you go to Venetia into a town meeting, you will see there's also a lot of support. And for all the reasons that the mayor just said, people really don't want them to shut
You know, just shut their doors and go. They want to find a way to work with them in a clean way, in a responsible way. And and they're obviously very dependent on them for economic boost. Right. You know, Steve, I mean, you're on the Air District Board. Right. And in previous coverage, you were a strong supporter of sort of holding the refinery to account.
Well, sure. I think all businesses need to be held account for the impacts that they have on the community. And the particular thing that Julie was talking about was a situation that arose after they bought the refinery in 2000.
and there was a series of hydrogen vent stacks that for one reason or another were not included in the reports that were being made to the air dristics on a regular basis. And so for close to 15 years,
They were emitting a variety of toxic emissions, xylene and toylene and benzene and other things that were well above the regulated limits. I think in some cases it was like hundreds of times, yeah? Yeah. And so this went on for, like I said, 12 to 15 years. And then when they did discover it,
rather than come to the city and tell us about it, they worked with the district for two or three years to try to get those levels down below the acceptable limits. They weren't able to do that. And that was a point at which they told us about it and started a process of trying to institute this fine, which was negotiated, resisted, and it looked like it was going to end up in court.
But ultimately, they decided to pay the settlement amount, which, you know, I'm glad they paid it because otherwise we'd still be in court. And the only ones who would probably see anything are lawyers. Do you think this is the fine, though, is why they're leaving? Do I think what? Do you think the fine is why they're leaving? No. No.
No, I think why they're leaving is connected to larger issues that the industry is dealing with in California. I've been meeting with the plant manager from the refinery for ever since the last election when they actually opposed me pretty heavily. But I won anyway, and then I started meeting with them and they said,
They made it clear, there have been two plant managers over the last five years, both of them made it clear that the industry in general believes that California and the governor in particular are hostile towards fossil fuels and are passing all kinds of regulations and did pass regulations that make their operation increasingly difficult.
And so I think that the decision that they made to leave Benicia and to close the Wilmington Refinery and for Phillips to close their refinery in L.A., it's all connected to is there a possibility that the state will take a second look at these regulations given the huge impact if they were to leave, if the industry in general were to leave?
what that would mean to the availability of gas and, most importantly, gas prices. Josh Sonnenfeld, you've been following the transition away from fossil fuels. Can you talk a little bit about what comes, what's the sort of pain of closing one of these refineries as part of that kind of long-term move away from fossil fuels?
Yeah. So, you know, I think it's really important to start with the broader context of why we're seeing refinery closures in California. And that's really the climate crisis, right? California is really, you know, seeing just five months ago, we had, what, 16,000 homes and businesses that, you know, burned up in the Los Angeles area. 29 people lost their lives. And we know that the cost of inaction on climate change are enormous, right? So I think it's really important as we're talking about the economic impacts of
of refinery closures and impacts to workers, which we really, you know, we need to focus on those clear strategies to support those workers, but we need to frame it within this broader context of what's happening on climate and these greater costs our state is facing. We also know that the transportation sector is the single largest source of emissions in California, about 40% of California's emissions.
It gets close to 50% once you add in the emissions from the refineries themselves, right? And so the state, you know, this is why the state is working really aggressively to decarbonize transportation, switch over to electric vehicles and other zero emission vehicles.
And so we know that this will lead to refinery closures because the number one products that our refineries in California produce is gasoline. And as we shift off of gasoline, we're going to see refineries economics declining. So that's what's happening within the state. And we're seeing all this shuffling. And yes, there's regulations that certainly play a role. But this is part of the broader transition. Right. And yes, the impacts on workers and communities are significant. Right.
But we have to think about that within this broader context and focus on how can we not, you know, not choose between the impacts of workers and communities and the broader need to transition on climate, right? That it's about, you know, a just transition is really about preparing ahead for those closures with that advanced notification so that we can support those workers and support those local communities. Yeah.
Let's just hear what Valero said on a recent earnings call about what's going on for them. Our current intent is to close the refinery. And, you know, obviously there's been some initial concern from the state leadership. And we've already had meetings with the CEC. We're working with them to minimize the impacts that would result from the loss of the refinery.
That was Valero executive talking on a recent conference call with investors. We are, of course, talking about the recent announcement of a possible closure of the Valero refinery in Benicia, what it could mean for our region, for the climate, for other things. We're joined by Josh Sonnenfeld, who's a senior California strategist with the Blue Green Alliance. We've got Steve Young, mayor of Benicia, and we've got Julie Small, reporter here at KQED.com.
We'd love to hear from you. What are your questions about the potential closure of the refinery in Benicia? Maybe you've been affected by the refinery as a worker, as a nearby resident, as a business owner. Want to hear about your experience there. Give us a call. The number is 866-733-4255.
6786. That's 866-733-6786. You can email your comments and questions to forum at kqed.org or you can find us on social media, Blue Sky, Instagram, etc. We're KQED Forum. I'm Alexis Madrigal. Stay tuned.
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Welcome back to Forum. Alexis Madrigal here. We're talking about the possible closure of the Valero refinery in Benicia, what it means for our region. Got Julie Small, KQED reporter. We've got Josh Sonnenfeld, senior California strategist with the Blue Green Alliance. And we've got Steve Young, mayor of Benicia. Love to hear your questions about the potential closure or maybe you have been affected or have worked at or live near this refinery. You can give us a call. The number is 866-733-7333.
That's 866-733-6786. The email is forum at kqed.org. Josh, let's just stay on workers for another minute here, which is interesting.
Are the skills of refinery workers, can they be transferred easily into other parts of our future energy economy? Or is being a solar or wind installer something totally different from what refinery workers do?
Yeah, that's a great question. And I think it's really important to understand that refinery workers, these are really skilled workers, right? They move volatile chemicals through pressurized pipes on a daily basis. And they have developed this really incredible safety culture over decades of working in these refineries and frankly fighting the management of the refineries to keep these facilities safe and
And so other industries in our society as a whole can really benefit by supporting these workers and moving into these new industries. We actually did a study, this was through the UC Berkeley Labor Center after the Marathon Martinez Refinery closed in 2020, on where refinery workers are most likely to find other jobs and what actually happened to those workers.
And some of the results were sort of surprising, I think, that a lot of times folks think, hey, you know, are they moving into solar? Are they moving into wind? You know, a lot of those green industries are still in development. But some of the jobs that refinery workers are best suited for, they include utilities, things like water, sewage treatment, PG&E. These are also other union jobs, right, that have better pay, better benefits, where those skill sets can be really valuable. Right.
So there are real opportunities to support refinery workers with transition. But the challenge is that there's just not enough jobs that can utilize that skill set. And oftentimes the quality of those jobs, particularly in Contra Costa and Solano counties, aren't quite there yet. And so workers see a real decline in their wages and benefits, particularly when they're moving to non-union facilities. Yeah.
Although, as I understand it, Julie, this facility is largely not unionized. That's correct. There's 400 workers at the Valero Benicia Refinery, and there's about—the contract workers who go through there apparently are in unions, but they are on temporary contracts. 200 people on average a day are in the refinery, but it can affect thousands of workers. Okay.
I just want to note, we just had a caller calling to tell us the refinery, there seems to be a fire there. And Benicia Fire Department units are currently responding to an active fire at the Benicia Valero Refinery, the fire department says. If you can smell or see smoke in your area, close the doors and windows and stay inside, they say. Mayor Young, I assume you've been made aware of this also. A few minutes ago. Yeah.
And what should residents do?
Well, I understand that there is a shelter-in-place order coming from the fire department for a nearby elementary school, as well as residents who live near the facility. I don't think it covers the entire city, but depending on the direction that the wind is blowing, that might change. But the immediate order, I believe, is simply for the school, Robert Semple School in Venetia, as well as neighborhoods in the immediate vicinity of the refinery.
I mean, how common is this? Does this happen a lot? No, it doesn't. It happens more at other refineries. Valero has probably been the safest refinery of all five in the Bay Area, but that's
excuse or help understand why this particular fire started. I don't have any information on that. Yeah, yeah. We will keep you updated on that, obviously, here at KQED. I'll just say it's just amazing that this is happening while we're on the air, but it's good that it is in the sense that
I think this is a reality that the people who live in these communities deal with. And it's kind of a hidden reality for the rest of us. You know, we might smell an odor or hear that there was a fire. But, you know, when you're on the ground there, like they were in Martinez when the fire broke out there in February, you're seeing plumes of black smoke going to the sky. You don't know what's happening. Your children are at school. They have to shelter in place. This is a reality. This is part of reality.
Why it's, you know, my people have also wanted to see these refineries, you know, be much better partners, run more safely and have more increased oversight and regulations on them. Yeah.
Let's bring in another guest here. We've got Severin Bornstein, who is a professor at UC Berkeley's Haas School of Business and faculty director of the Energy Institute and member of the Board of Governors for CalISA, which is the California Independent System Operator. Welcome.
Good morning. You know, here's a comment from a listener, and it's on the same topic around safety. Daphne writes, I was born and raised in Rodeo, which is right next to the Phillips 66 refinery. I'm now working in my community to get air monitoring, which is scarce or non-existent in spite of our asthma rates being in the 93rd percentile. It's really hard to see how close families live to the refinery. A lot of residents consistently complain about odor, flaring, health burdens like asthma, cancer, low birth rate, blood disorders.
Not only that, fires, explosions, and leaks happen more than they should. Given the Benicia refinery shutdown, do you offer any hope to Rodea residents? What should we know? Maybe as someone who focuses on the energy side of this, these are...
So externalities that happen, right? I mean, they are a necessary part of like the refinery. This is just how they work. These things are these health impacts are real and it's not like they can go away. So how should that be factored into the way that we think about the energy system we have and these specific refineries?
Well, I think there's no question that these refineries do occasionally put out and maybe more often than occasionally emissions that harm people nearby. That is something that regulation has to deal with. I was for five years on the advisory board to the Bay Area Air Quality Management District, and I know this is something they focus on very much.
The goal is to minimize those events and to make sure that the refineries have the right incentives to minimize those events.
But there is always this tension as the as it's been discussed earlier in the show that on the one hand communities benefit from having a big industrial facility that provides good jobs and taxes and on the other hand they are impacted by having those particularly the people who live very close and so the government really has to keep a close eye to make sure that those
emissions don't rise to the level that they're causing real health consequences. Over time, we've learned more and more about what those health consequences are and how pervasive they are. And I think that that's why we've seen a greater focus on this in the last decade. Let's bring in a caller here, Marilyn Ian Benicia. Welcome.
Hello, my name is Marilyn Bardet and I've been a long activist in town, focused largely since 2000 on the Valero Refinery and keeping our community safe and healthy. And just on the issue of public trust, I've
I believe that Valero really lost it between the years of 2013 and 2016 when they proposed to bring crude oil in by train. In other words, oil trains coming in every day into our community. And we showed during that same period how many derailments there were across the United States where you had fires and explosions.
And I made the point to the refinery that it just wasn't safe, and they couldn't sell
safety to the community. It had to be safe and it wasn't. And so even we had the support of Kamala Harris as the office attorney general rejecting that permit. And so from that point on, and the community was organized against the Crude By Rail project. And so the community has remained alert. But I have two other points here. Given the economic factors,
that plague, you know, Valero as well as other refineries, including the price of oil sales.
The crude oil per barrel cost is down, and that would look to be an advantage for Valero, but it's not. And I believe what they're doing is they will not be making major capital improvements in the future because of this uncertainty. But also, KQED News, Matthew Green, on April 26th,
characterized what they might be doing since it's an indeterminate set of three options that they cited. And Matt Green talked about a Hail Mary pass. And my question is, okay, who's the wide receiver? And I believe it's Carb.
and the governor, and they don't want, you know, major... They're bristling at the major restrictions and requirements, whether through the Air District or other regulatory policy requirements
And CARB is looking to possibly take away local authority for stationary sources, a.k.a. refinery, and transfer that under SB 318, if it gets out of committee, would transfer authority away from the air districts to CARB, which would...
stifle public involvement. Well, Marilyn, let's stop there only because I want to get Steve Young on this. Obviously, Steve, I imagine as Mayor Benicia, you are actively involved and thank you so much, Marilyn, for your comments and your knowledge. I imagine that you
You're part of these negotiations. Are you hearing that Carb may be as an Air District board member or as Mayor Benicia that Maryland's theory is already in play and in practice?
Well, nothing has the mayor. I'm learning about this. You know, Maryland is a great resource on this kind of information. As an Air District board member, also, we have not heard anything directly, although we have a board meeting Wednesday in San Francisco. And I expect that there will be some real discussion about this, about the fire, about all kinds of related issues at that time.
Julie Small, what have we seen with, and Josh, feel free to jump in on this if you need to, but what have we seen when it comes to these kinds of closures or negotiations with fossil fuel facilities that they try and say, listen, we're going to leave. There's going to be no gasoline available in the state of California. Therefore, you've got to pull the heat off on environmental regulation. Yeah.
Well, I don't think it's really slowed us down. I mean, I think the state lawmakers have been very aggressive in recent years, dating back to the highest gasoline prices we saw in the state in 2022. That led to legislation cuts.
subtly named the California Gas Price Gouging and Transparency Law, which established greater oversight. And we've gone so far as to say, okay, we want to make sure that we know what your inventory is like. We don't want to, because the price is spiking is caused by lapses in production and just, you know, unexpected things that happen like temporary closures. You know, we want to
we want to be able to know when that's going to happen. We want you, maybe we're going to require that you have a certain amount of inventory. And this has just made the oil companies go crazy.
You know, they hate it. They hate it. But it doesn't seem like other than this most recent, you know, moment with Gavin Newsom, where he said, you know, when he found out about Valero saying that they were leaving, well, we're going to all hands on deck and we're dealing with this. He's been stridently, openly accusing oil companies of being liars and cheats and unethical and all these things. So he's...
And I don't see the state legislature, at least for now, backing off that even with this threat of departure. Yeah. And what I would add in is, you know, I know a lot of the conversation is, you know, how is the state managing supply and demand? And, you know, obviously we've got two refineries in the state in the process of closing. Are we importing fuel? What does that do for, you know, for the prices? Does Valero stay open? Do they not? Right.
But the other piece that we need to be talking a lot more on and working on is what's the actual just transition plan for if or when they do close, right? So we've got a year to prepare. There's hundreds of workers. They're going to need support in transitioning to their new careers. There's the city of Benicia that's going to need support in thinking about their tax base, right, and how to support public services like fire, water, sewage, public transport.
Parks and Rec, right? You know, all those economic development pieces. And then there's the whole decommissioning. We're talking about 900 acres, right? A former arsenal even before it was a refinery, right? And we're really lacking policies in all of these areas right now. So we really need to be advancing that sort of broader just transition planning, knowing that closures are a part of the energy transition. Yeah.
Just want to let people know, you know, Joe also writes in, you know, saying the explosion at the refinery this morning shook our house. The smoke clouds are thick over Robert Semple Elementary and in our neighborhood on East 2nd Street. Again, you know, we...
Make sure if you're a Benicia resident, you're checking in with the fire department. They're updating as well over there. We are talking about the possible closure of that facility. Like I said, we know there's a fire there right now. Not planned, obviously.
We are joined by Julie Small, reporter at KQED here, Josh Sonnenfeld, senior California strategist with the Blue Green Alliance. We've got Severn Bornstein, professor at UC Berkeley and faculty director of the Energy Institute there. And we've got Mayor Steve Young of Benicia.
If you want to call in, you've got questions about this potential closure or about the refinery's operations or the impact to the city, number is 866-733-6786. That's 866-733-6786.
Mayor Joe writes in to say, I grew up and recently moved back to Benicia after 35 years in Southern California. I've watched Benicia transform into a go-to destination while the school has improved and the population doubled. While other things track toward continuing success, Valero has resisted being part of positive change in any collaborative capacity. The loss in tax basis is expected to be material for the city. What civic business development opportunities might now be prioritized to maintain the positive economic growth Benicia has been tracking towards? Just to Josh's point.
Well, we're starting our two-year budget development process right now, and we're going to have to obviously figure out how to balance this kind of revenue hit with trying to maintain as many services as possible. The community has made it known through surveys and through their votes on previous tax measures that they prioritize public safety,
And I think the council agrees with that. So, and then one of the, you know, Benicia is a very safe town and that's of key importance to everybody. But the fire and police make up 50% of our budget. And so we're going to take a $12 million hit on a $60 million budget and try to think that we're going to not touch police and fire on in any level. That means we're going to focus on
We'll have to focus on other things like parks and the pool and the library and everything has passionate supporters. So it's going to be a very difficult budget development process. The other thing I can say is that we're working on putting together some community leadership groups to advise on a variety of impacts and give feedback.
How can we use, for example, the settlement money? The Air District changed their policy last summer that it used to be that all the fines went to the Air District. And then the board changed that policy so that depending on the size of the fines, a portion or a majority of the fines go back to the communities where the occurrence happened.
And under this policy, we're scheduled to receive the benefit of about $56 million, which is certainly significant. And if it were in the form of a check to the city, that would be an easy way to sort of address a lot of these fixes. However, it's not. The Air District will approve grants.
to various projects that are either air quality or public health related. And so one of my jobs is going to be working with my fellow directors on the board to find out if there is a way that we can use that money. Thank you for that, Mayor Steve Young in Benicia. We'll be back with more with Julie Small, Josh Sonnenfeld, and Severn Bornstein when we come back from the break. I'm Alexis Madrigal. Stay tuned.
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Welcome back to Forum. Alexis Madrigal here. We're talking about the possible closure of the Valero refinery in Benicia. We also know there's a fire at the refinery right now, and you should take a look at the Benicia fire department's
Posts about it if you're there in the city. Hope everyone is safe. Julie Small joins us, reporter here at KQED. Josh Sonnenfeld, senior California strategist with the Blue Green Alliance. Severn Bornstein, professor at UC Berkeley's Haas School of Business and a faculty director of the Energy Institute at Haas. And we also have Steve Young, the mayor of Benicia, on the line.
The Air District, just so people know, has also issued an air quality advisory for Solano and Contra Costa counties, just so people know. Yeah.
Severin Bornstein, let's come to you on the sort of like big picture here. Obviously, you know, in a world where we know fossil fuel use has to go down, that means fewer refineries. And this is, you know, something people have known for as long as they've been wanting to fight climate change. So what's the plan been for refineries? Like how has, you know, how have people at the state level or people in your position tried to prepare for these kinds of moments?
Well, yeah, that's right. We're not only going to see disruptions in jobs and the tax base, but also in the gasoline market. And that is something that the California Energy Commission recognizes and is working on a study of. I think they thought they had a few more years before they had to really have this all worked out. As we consume less gasoline, some of the California refineries are going to shut down.
If that could happen bit by bit as demand declined, that would be great, but that's not how refineries work. And so we are likely to see the sudden changes of fairly large shares of the market.
Now, realistically, I think those are likely to be made up with imports, but we're not really prepared for all that for the imports either at this point. That means we have to have enough port capacity. We have to have enough pipeline capacity to move the fuel away from the ports once it arrives.
We have to have more inventory and storage capacity because those ships that come in bring millions of gallons, millions of barrels, which is 40, 50 million gallons of gasoline at a time. So you need to have a place to store all that gasoline.
Those are the things that we need to be working on now so that when we get these refinery shutdowns, and we're going to get two of them in fast succession, it looks like, within the next year, we have the capacity to smooth out supply so that we don't see a big price spike.
Yeah. Like talk to me about what happens if we don't do that. Cause yeah. So Josh mentioned, uh, you know, uh, uh, equitable transition and that's true for workers, but it's also true for gasoline buyers, uh,
There are a lot of EVs being sold. They are overwhelmingly sold to wealthier Californians. The lower income Californians disproportionately will be buying gasoline for the next decade, certainly. And so making sure we avoid those price spikes.
is really critical as we phase out gasoline and that means making sure we have the facilities to receive imports at adequate volume as the refineries do shut down now some people have
uh propose some alternatives one of which i've heard a number of times is california should take over these refineries and run them and i think that's just not realistic uh refineries are incredibly complex um
operations and not something that I think the state is well suited to do. So I think we really need to make sure that we can import supply as we need it. There are a lot of states that don't have refining capacity and import supply. California is in a bit more difficult position being on the coast, but we have the facilities. We just have to make sure that there's enough of them to bring in supply as we need it.
Josh, how come people aren't talking about biofuel production, right? Isn't that what's been happening with some of the other refineries? It's kind of kept them in the black or...
Yeah, so we've had in Contra Costa County, two of our five Bay Area refineries have converted to biofuels. The Phillips 66 Refinery in Rodeo, I think we had a caller from Rodeo earlier, and the Marathon Martinez Refinery, also in Contra Costa County. And, you know, the state, the California Air Resources Board has placed an emphasis on biofuels as a key part.
transition fuel, particularly for biodiesel. There's also sustainable aviation fuel. It's been pretty controversial environmentally in terms of biofuels. It's questionable whether it actually improves local air quality, for example. It actually requires more hydrogen use in biofuel than in petroleum production. But on the flip side, for labor folks, from labor unions, it has helped to provide more of a glide path for jobs.
Phillips 66 refinery, when they converted, they were able to keep their workforce. The Marathon Martinez refinery, unfortunately, they laid off over 750 workers when they closed down before they converted to biofuels, and they only ended up hiring back about a quarter of those workers.
and there have been some safety incidents there too. So I think the question is still an open one around biofuels, but we also know that it's for a particular segment of the economy. It doesn't replace gasoline usage and the conversion to EVs. Let's bring in a caller here. Let's bring in Brian in Hayward. Welcome, Brian. Yes, thank you. Thank you for having me. Oh, go ahead. My question is, I know you were speaking about the employees and leaving of the company in 2016.
I'm from San Francisco, and in Bayview Hunters Point, the shipyard left all the contamination, the benzene, the mercury, and all those things. I think that the refineries should be responsible for cleaning up after they leave, like having a deposit on the land. You put that returning land to as it was before they came.
And then the employees can stay. But with that being said, they should have that plan because the plan, you know, it's a boy's plan, but it's called be prepared. It's a boy scout, say be prepared. So they should be prepared with all the billions of dollars that they're making to clean up after themselves. Because my grandfather, my grandfather, and my father all died from cancer at this point. They only offered $600 for my dad. And is it something that's just not right? Yeah.
Hey, Brian, really appreciate that call and thinking about these kind of long-term environmental impacts. I mean, Julie Small, let's come to you and then Mayor Young, I'm going to come over there on this.
I mean, we have so many sites in the Bay Area that, you know, Army base, Alameda Naval Base, and a lot of industrial facilities, too, where we didn't get that cleanup, right? Or at least the city or the county or whoever, the state has been on the hook for that cleanup.
Yeah, I think that that is part of the new legislation that's been passed. That includes having the California Energy Commission figure out ways that the refineries will pay for the closures and shutting everything down in a safe manner. And I forget the terminology. It's like plugging something. But I think that is also something that California is trying to be more –
aggressive about. Yeah. Yeah. Mayor Young, you know, this is, as Josh said earlier, 900 acres. It's, you know, we're right on the bay there. Do you have any estimate? Has anyone given any estimate or like how long would it take to actually remediate this land and, you know, return it to the state that it once was long, long, long ago now?
Well, I think it's the minimum of three to five years. And that in terms of who's responsible, it's my understanding that Valero will be responsible for the cleanup. They have, I understand, set aside $337 million for dismantling the equipment there and site remediation. Whether that's going to be enough?
Maybe not. But that is the number that they have put forward that they are prepared to or that they've put on the books as a future cost. Yeah. Josh, why isn't that part of the glide plan and dress transition? Right. Couldn't the refinery workers become remediation workers?
You know, the decommissioning and cleanup is a critical component. And one of the key topics we should be discussing here is also the level of cleanup, right? I mean, these are legacy industrial sites. And, you know, sometimes it's very common we see developers trying to negotiate the level of cleanup so that it's not, you know, it's never going to be returned back to the way it was, right? And so the level of cleanup really matters in terms of what else you can develop out there. Sure, you can create some jobs from that cleanup process, right?
But the greater opportunity is actually around the redevelopment, right? So what's the vision for redeveloping these lands? These are thousands of acres of refinery lands around the Bay Area. They're also on the water, and we've got sea level rise, groundwater rise, and so we really need to be making sure that that cleanup –
happens to the greatest extent possible, that we've got strong worker standards, safety standards in place so no one's getting sick from that cleanup. And also that, you know, the redevelopment process is really driven by local communities rather than some development firm coming in, you know, trying to, you know, maximize the amount of profit they can get out of that situation. Yeah.
Severin, Cheryl writes in to say, you know, I worked at the Benicia refinery as an engineer from 74 to 85, and safety and the environment were extremely high priorities. How has investment in maintenance over the last 20 years supported the refinery in the community? Is it still state-of-the-art? How does it compare to the much older refineries in the Bay Area? Just making the key point, this is, I think, the youngest of the refineries. Severin?
Yeah, I am not going to be able to help out on that question. I don't know the history of the refinery and the safety records. Sorry. No problem. No problem. Let me... Sure. Valero is the newest refinery on the West Coast, the second newest in the United States, I understand. And in terms of safety, I believe it is...
has been the safest refinery in the Bay Area, certainly with the least amount of incidences. Of course, this 15-year high-end... Yeah, I was about to say, how's that bacon there?
Otherwise, and now we're saying this as there is a fire going on simultaneously, but I think most people would recognize that Bolero is the most technologically advanced refinery. They spent the most money on equipment and upgrades, and they are the safest refinery in the world.
which is on a relative scale, of course. Yeah. And Mary Young, on the redevelopment score, is the idea that this would be redeveloped into other industrial facilities is, I mean, you know, we already kind of knew that eventually this would come down the line. What did you imagine in your time, say, as a planning commissioner or city council member even, would go out there when Valero eventually left?
Well, what has happened recently that we haven't talked about so far is that Valero has engaged a development firm, Signature Development out of Oakland, who is a relatively large developer to develop
have what in redevelopment terms is called an exclusive right to negotiate where they will take the next year to examine various development scenarios, types of development that might work, look at the cleanup issue and how fast it's going to happen. But they're open to
housing, industrial, commercial, retail, virtually anything is an open door now. So, you know, I think it's a positive development in the sense that we have a reputable developer entertaining public ideas about what could go there down the road. But this is, you know, you have to look at this is probably a five to 10 year process
And in the meantime, we're going to have these economic hits that are going to happen right now and for the next 10 years. So while I'm encouraged by the fact that there is likely to be some type of transition and that they're open to various types of uses, the timing is going to be an issue for the city. And just when I looked at signature development, they seem primarily a residential builder, yeah? Yeah.
Primarily, but they've also worked on a big commercial project with Meta down in Menlo Park and a large mixed-use project in Santa Rosa. They did the dog patch project in San Francisco. So I think, you know, although it's probably primarily residential and they're certainly open to residential, you're probably not going to put residential right over the site where a refinery used to sit.
but you might be able to do other types of uses there. And we have about 200 acres of buffer zone that Valero owns in between the refinery and other residential uses that is up higher geographically and wouldn't necessarily have those same kinds of pollution concerns underground. Josh Sunfeld, let's return to the workers here at the end.
You know, I think there's been some sense that job training or something is the answer. You know, people reskill and they do something else. Has that been shown to work or is there some other strategy that needs to be employed?
Yeah. Well, so I think, again, we want to start with that these are already highly skilled workers, right, that offer a lot for the local economy. And we actually, you know, we did a study. We brought together labor unions and environmental justice groups after the Marathon Martinez refinery closure. And we put together a whole report on how can we make sure that refinery workers and refinery communities' needs are met, you know, in the
the refinery transition, the energy transition. And one of the things that we really identified is we need a much better safety net for workers. And we saw this with the workers that came out of the Marathon Martinez refinery.
You know, Valero's given a year's notice. Marathon gave 60 days notice before those workers were laid off. 750 workers. Right. And so you've got folks in majority of which have mortgages. They've got kids in school. They're scrambling to find that next job. And oftentimes that next job is not paying anything near what you're making in that moment because unemployment is, you know, it's that's it.
does not pay very well, right? But if we can develop a better worker safety net so that folks have wage replacement, a longer sort of glide path to find that right next position, that'll really help a lot. But it won't be enough. We also need to be doing that economic development, creating those quality union jobs, frankly, in the regions where the refinery workers are working to help support them transitioning and to help communities like Benicia with their tax revenue, right? Yeah.
Steve Young, we know you've been busy on the air here. Do you have any updates you want to give us on the fire? Any specific information about what's happening at the refinery? Let me see. I just got something from the city manager. Good progress being made on fire situation looking better. Okay. Well, that's hopeful. Hopeful here for everyone there. I also just wanted to get one.
Last comment in here. Elspeth writes, you know, I'm a Benicia resident. We actually closed on our dream house on the day the announcement was made about the refinery closure. Wondering how the closure will affect the community and public services specifically, especially the schools and things Valero supports like Benicia Little League. Probably some changes coming to town, sounds like.
Steve, actually, one last, last comment. Steve on the Discord also just wants to note, you know, with Valero being the biggest employer and biggest taxpayer in Benicia, it looks like a big hit.
The regional impact, though, may not be over 400 jobs. It's relatively big in a city of 26,000, much less so in the greater Bay Area. And Sandy writes, I'd be happy to see no fossil fuel refineries on our local hills. This is not to minimize the short-term economic harm of abrupt refinery closures. That's a real concern. But why not see this as a chance to build back in a green way? There should be good union jobs available to remove and clean up after the refineries, and the refinery owners should be required to cover the costs. Local governments can be leaders in creating a
post-fossil fuel economy. We have been talking about the possible closure of the Valero refinery in Benicia. We know there's a fire there. Again, take a look at what's coming out of the Benicia Fire Department and official sources for what's going on. And of course, we'll also have coverage here on KQED. We've been joined by Julie Small, a reporter here at the station. Thanks for joining us, Julie. Thank you, Alexis. We've also had Josh Sonnenfeld, senior California strategist with the Blue Green Alliance. Thank you. Thanks very much.
Stephen Bornstein, professor at UC Berkeley's Haas School of Business and a faculty director of the Energy Institute. Thanks for joining us. Good to be with you. And we've had Mayor Steve Young from Venetia. No, you probably need to get out of here real fast. Thank you so much, Mayor. Thank you, sir. I'm Alexis Madrigal. Stay tuned for another hour of Forum Ahead. And a special thank you to KQED Managing Editor, News Editor Ted Goldberg and the Newsroom for keeping us updated on the breaking news about the fire. Stay tuned for more with Mina Kim just ahead.
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I'm Jorge Andres Olivares and I'm hosting a new show, Hyphenacion. I'm like many other hyphenated Latinos in the U.S. Our cultures and our communities inform our choices, like with money. We had that pressure to be the breadwinner. Religion. I just think Jesus was what we would now define as Christ.
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