Chevron weighs response as city board seeks limits

HOUSTON, June 6 (Reuters) - Chevron Corp (CVX.N) was weighing its options after the planning commission in Richmond, California, voted to limit the types and amounts of crude and feedstocks its refinery in the San Francisco Bay-area city can use after a planned upgrade.

"This is in our knowledge unprecedented in the industry," Chevron spokesman Sean Comey said.

The Richmond Planning Commission's vote does not affect current operations at the 243,000-barrel-per-day refinery.

State and regional environmental regulators routinely impose restrictions when issuing refinery operating permits, but city design and zoning permits are usually limited to construction and siting issues.

"We need the caps because we already have a lot of pollution in the city of Richmond," said Commissioner Nagaraja Rao, who voted in favor of the limits. "Some people think it's a toxic dump."

Chevron's planned upgrade will allow the refinery to run crude oil with higher sulfur content than it can now, but won't add to the refinery's throughput. The project will also give the refinery more flexibility in the products it manufactures.

Using cheaper yet higher-sulfur crude oil will lead to higher levels of pollution, Rao said.

Chevron believes upgrading inefficient refinery units, some first built 70 years ago, will reduce pollution from the refinery, Comey said.

The Planning Commission will consider a formal draft of the limits at a June 19 hearing. If the limits are adopted, Chevron can ask the Richmond City Council to overturn them.

The refinery upgrade will take up to five years to complete, once state and local permits are granted. (Reporting by Erwin Seba; Editing by Braden Reddall)