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Bay Air District Hails 'Decisive Victory' in Battle to Cut Refinery Pollution

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The Chevron refinery in Richmond on Oct. 27, 2023. (Martin do Nascimento/KQED)

Updated 3 p.m. Tuesday

Bay Area air regulators say they’ve won a “decisive victory” in a legal fight with a pair of oil companies that had sued to block enforcement of a rule intended to sharply reduce an especially harmful form of pollution emitted by the facilities.

The Bay Area Air Quality Management Agency (BAAQMD) on Tuesday morning announced agreements with Chevron, which runs a 120-year-old refinery in Richmond, and the Martinez Refining Company, that commit both firms to comply with a rule requiring crude oil production facilities to curtail particulate pollution beginning in July 2026.

The two companies are dropping lawsuits that challenged the rule. Chevron has committed to paying penalties and making other payments that could total more than $130 million if it delays compliance with the rule. Martinez Refining, a subsidiary of New Jersey-based PBF Energy, has agreed to implement a continuous monitoring system to ensure compliance with the district regulation. Each company will pay up to $500,000 to cover the district’s legal fees.

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“The air district agreements with Chevron and MRC mark a turning point in our commitment to enforcing air quality regulations and deterring future violations throughout the Bay Area, especially in communities already overburdened by air pollution,” said Dr. Philip Fine, the district’s executive officer, in a statement announcing the agreements.

“Everyone, no matter where they live, deserves or has the right to breathe clean air, and that’s what this announcement is about today,” said Contra Costa Supervisor John Gioia, who is a member and former chair of the BAAQMD at the air quality agency’s press conference Tuesday morning.

The board that oversees the air district approved the new rule in July 2021. Two months later, Chevron and PBF sued in Contra Costa County Superior Court to block its implementation.

The rule, known as Regulation 6, Rule 5, focuses on the operation of the refineries’ fluidized catalytic cracking units, which break down heavy crude oil into lighter products like gasoline. Following that process, carbon material known as coke is burned off, pushing large volumes of particulate matter into the air.

Particulate pollution — consisting of both fine particles, known as PM2.5, and larger particles, PM10 — can be inhaled and is associated with a wide range of lung, heart and other chronic health problems.

Primary care doctor and Climate Health Now nonprofit cofounder Dr. Ashley McClure said she was “shocked” by the news.

“It’s so rare to see that sanity and what’s in the public interest prevails … I don’t really understand their motives, but I’m really glad that Chevron and the PBF refinery are dropping their case,” said McClure, who, through her nonprofit, worked with BAAQMD to bring about the new rule in 2021. “The fact that it passed was really wonderful.”

Martinez resident Heidi Taylor, who is a member of the Healthy Martinez Refinery Accountability Group, welcomed the news, which she called “a huge win,” but said “the fight for clean air, water and soil” in Martinez was not over.

“Make no mistake, I’m thrilled, but … I want to know how the measurements are going to be collected, whether or not they’re going to be publicly available,” Taylor said. “We are now relying on the district attorney and the [BAAQMD] to follow up on past violations. We are going to be as aggressive and involved as we always have been to make sure that this community is safe and healthy.”

In the past, the two energy companies have argued that the air district overstated the health benefits of the new rule and underestimated the cost of implementing it.

On Tuesday, both companies confirmed the deal.

Chevron, though, raised concerns about how the air district comes up with its regulations.

“The settlement ends our litigation over BAAQMD’s adoption of some of the most stringent environmental regulations in the world. It provides for an extended compliance timeframe to navigate California’s difficult permitting landscape and settles the BAAQMD’s 5-year backlog of enforcement actions,” Chevron said through company spokesperson Caitlin Powell.

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“Chevron is committed to working with agencies, like the BAAQMD, on efforts to improve air quality. However, we remain concerned that the BAAQMD’s rulemaking process is fundamentally broken and believe it’s another example of how California policies have led to a hostile business environment for manufacturers, disincentivizing production of the transportation fuels that millions of Californians depend on every day,” the company said.

A PBF Energy representative said the Martinez Refining Company has been working to comply with the new rule.

“We thank our employees and consultants whose ingenuity and hard work led to an innovative technical solution to comply with the new rule, as well as the BAAQMD for working constructively with us to arrive at our mutually desired goal of improving air quality in the Bay Area,” company spokesperson Brandon Matson said.

Air district officials describe the regulation as “the most health-protective rule of its kind in the nation.” They have long argued that the reduction in emissions would reduce early deaths and other health problems for people exposed to particulate matter.

The air district said its agreement with Chevron includes a series of costly penalties if the company fails to comply with the rule when it takes effect in less than two and a half years. Chevron would pay $17 million a year for the first three years of noncompliance, which would escalate to $32 million in the fourth year. The deal also requires the Richmond refinery to take steps to reduce particulate emissions before the rule takes effect.

Chevron has also agreed to pay $20 million into a Community Air Quality Fund and another $20 million to settle 678 unrelated violations related to its Richmond refinery operations. The company also promises to reduce persistent flaring at the refinery.

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