Chevron Hits Rough Patch in Richmond, Calif.

The following is an excerpt from an article in:


The New York Times
Thursday, January 03, 2013

Chevron Hits Rough Patch in Richmond, Calif.

By NORIMITSU ONISHI

RICHMOND, Calif. — The Chevron refinery’s massive oil storage tanks sit on the hills overlooking this small, impoverished city in San Francisco’s East Bay. Painted earthen red to blend with the natural surroundings, the tanks cannot help dominating the city’s skyline, much the way the oil giant itself has long shaped Richmond’s identity, economy and politics.

But Chevron’s grip on Richmond’s politics began to loosen a few years ago after left-wing anticorporate activists seized control of the City Council and mayor’s office. In an area of the country where high-tech companies tend to coexist peacefully with affluent municipalities, perhaps nowhere have locals and a giant corporation rubbed shoulders with such intensity as in Richmond.

If city leaders likened themselves to anti-oil-company fighters in Nigeria, Ecuador and other developing oil-rich nations, Chevron’s response would not have been out of place in the Niger Delta. It has spent millions of dollars on social programs and community-building here, as well as on friendly politicians.

Now, Chevron will get an inkling of whether its new strategy is working as the city weighs the company’s plans to rebuild a critical unit damaged in a major fire in August. Chevron says it wants to complete repairs this month at the refinery, where production has been cut in half since the fire.

Not so fast, the city says.

At a recent raucous public hearing, Mayor Gayle McLaughlin stood up to criticize Chevron, leaning on a pair of crutches after knee surgery. The mayor pointed out that the company had yet to provide documents requested by federal regulators, who are expected to release a report on the cause of the fire early this year. To applause, the mayor said, “In terms of response and transparency, I have concerns.”

At issue is Chevron’s choice of metal to replace a 5-foot-long, 8-inch carbon-steel pipe that became corroded and sprang a leak in August. The resulting fire sent plumes of black smoke into the air, spewing emissions of sulfur dioxide, as the authorities warned Richmond residents to stay indoors. Thousands went to emergency rooms with various health complaints. Chevron says it will compensate residents with valid claims for medical and property expenses, although it has not said how many of the 23,700 claims it has received will qualify.

The selection of a metal alloy called 9 Chrome will make the new pipe resistant to the kind of corrosion that affected the carbon-steel pipe, Chevron says; while the city’s own metal consultants confirm that the material meets industry standards, critics say there could be better choices.

The larger issue is the trust between Chevron and Richmond, which has deteriorated since the fire.

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