Court mulls Chevron San Francisco Bay plant upgrade

SAN FRANCISCO (Reuters) - A state appeals court will decide within 90 days whether Chevron Corp (CVX.N) has done the proper paperwork to restart a $1 billion upgrade of its refinery on San Francisco Bay, the lead judge said on Tuesday.

Upgrade work at Richmond, Chevron's oldest refinery and a candidate for closure according to a local newspaper, stopped last summer when a lower California court ruled the environmental impact report (EIR) filed to get construction permits for the new hydrogen plant was insufficient.

The second-largest U.S. oil company laid off 900 of the 1,000 workers on the project in Richmond, adding to the woes of a working-class city with unemployment nearing 18 percent.

In the opening arguments of an expedited case at the California Court of Appeal, the lawyer from Earthjustice, Will Rostov, accused Chevron of not being specific enough in the EIR about its plans to refine heavier crude oil after the upgrade.

"By talking in generalities, they misled the public," Rostov told the court in San Francisco. "It was a failure of the document as a public information document."

Chevron lawyer Ron Van Buskirk countered by reading a passage from the EIR about the types of crude oils refined being kept within a previously agreed range.

As part of the refinery upgrade, work started in 2008 on a Praxair-built (PX.N) hydrogen plant that would ship excess hydrogen through a new pipeline to nearby refineries owned by ConocoPhillips (COP.N) and Royal Dutch Shell Plc (RDSa.L).

Rostov argued the pipeline's impact had not been thoroughly considered in the EIR, and should have been since the hydrogen plant would produce 30 percent more than what Chevron needs.

But Van Buskirk said the pipeline was not a necessary part of the upgrade, its route had not been decided, and it was more a county responsibility than that of the City of Richmond, which commissioned the EIR, given where it would be built.

Judge Ignazio Ruvolo, presiding on the three-judge panel, said the court still had lots of work to do on the case and would make a decision within 90 days.

The case is "Chevron Products Company et al v. The Superior Court of the County of Contra Costa" in the First Appellate District of the California Appellate Courts, case no. A125531.

(Reporting by Braden Reddall)