Oil

Saturday, May 17 2014 08:59 PM

Projects would boost crude shipments to Kern

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    By Casey Christie / The Californian

    Bakersfield High School is in the background behind the rail cars that go through town, as viewed from the overpass on Oak Street.

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    By Felix Adamo / The Californian

    Work is underway on the Plains All American Pipeline LP oil offloading facility about 25 miles southwest of Bakersfield west of I-5.

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    By Felix Adamo / The Californian

    Crews work on the Plains All American Pipeline LP project near South Lake and Santiago Roads southwest of Bakersfield.

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    By Felix Adamo / The Californian

    Construction of the Plains All American Pipeline LP project about 25 miles southwest of Bakersfield is underway.

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BY JOHN COX Californian staff writer jcox@bakersfield.com

Dallas-based Alon USA Energy Inc. has proposed an oil car offloading facility at the company's Rosedale Highway refinery.

A similar facility by Houston-based Plains All American Pipeline LP is under construction near Taft.

Neither plan has received much local public discussion, though the quiet surrounding Alon's project may soon be over.

An environmental review of its proposed offloading facility is expected to be released any day. It will likely call for the company to make new safety investments in the county.

Local officials say they know little about Alon's plans, and less about the Plains All American project, which was approved more than a year ago without an environmental review or much public notice.

Several city and county representatives declined to comment on the Alon project or its safety risks, saying they hesitated to pre-judge the proposal before the release of its environmental review. Some noted regulation of interstate rail shipments is a federal responsibility, not a local one.

Kern County Supervisor David Couch, whose district encompasses both projects, said the public relies on federal regulators to "do their job. ... I hope they don't drop the ball in this case."

Some of the safety initiatives now under consideration in Washington and Sacramento specifically target shipments of North Dakota and other Midwestern oil. Ideas being discussed include tougher tank car shell standards, more communication between railroads and local emergency agencies, and a shift in the way California responds to oil spills and industry pays for them.

Kern County Fire Chief Brian Marshall and State Fire and Rescue Chief Kim Zagaris said the county's review of Alon's project provides an opportunity to match local risks with local capabilities.

"We're going to address it," Marshall said, "but at what levels do we address it?"

Alon wants to expand its existing, small offloading facility with a double-loop version at the mothballed, former Big West plant along Rosedale. The company proposes to reopen the refinery and process as much as half the 150,000 barrels it would receive by rail daily, diverting the rest into a pipeline leading to refineries in the Los Angeles Basin and the Bay Area.

The project would have "potentially significant" impacts as a public and environmental hazard, according to the notice of preparation for the project's environmental review.

Alon declined to comment.

Plains All American has no refining plans. Upon completion of its project toward the end of this year, it would receive 140,000 barrels of oil and divert them all into a pipeline bound for Los Angeles-area refineries.

Plains bought the project in 2012 from Houston-based rail facility builder U.S. Development Group LLC, which secured construction approval without need for county hearings or special review because the site was already permitted for uses including a rail offloading facility.

However, a full-scale review may be required for a 5.9-mile oil pipeline segment Plains has proposed that may be related to the offloading facility.

Plains learned from the county May 6 the pipeline's proposed route through county right-of-way would require a full environmental review.

The project would have been spared such extensive scrutiny under a "mitigated negative declaration" the county had circulated for the right-of-way. But the declaration drew public comments convincing staff the project "may have significant environmental impacts which require additional environmental review," the department's letter to Plains said.

Spokesman Brad Leone emphasized the company's offloading facility won't be limited to accepting North Dakota oil. He noted the terminal will support 60 new jobs and generate $1 million in annual tax revenue.

He emphasized that Plains, operator of seven oil-by-rail terminals nationwide, focuses on public safety.

"We've worked closely with area first responders for years to educate them on our local activities, involve them in our emergency response exercises and support their efforts through equipment donations," he wrote in an email.

Costs of Alon's and Plains' projects have not been disclosed.

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