(Updates with Chevron comments, paragraphs 4-6, 8-9)
By Erwin Seba
HOUSTON, July 2 A California state judge
ordered Chevron Corp (CVX.N) to halt a $1 billion project aimed
at expanding the types of crude oils its San Francisco Bay-area
refinery in Richmond, California, can process, according to
court documents released on Thursday.
Contra Costa County Superior Court Judge Barbara Zuniga
sided with California environmental activists that the
environmental impact report filed to obtain construction
permits for a new hydrogen plant failed to depict how pollution
from the refinery would be changed by the project and provide a
greenhouse gas mitigation plan as required by California law.
"It's a complete victory," said Will Rostov, attorney for
Earthjustice, which represented California community groups
opposing the project.
A Chevron spokesman said the company would begin
demobilizing the project and was laying off workers as it
weighs its next move in consultation with the City of Richmond,
California, which issued the permits.
"Chevron is disappointed with the court's ruling," said
company spokesman Brent Tippen. "Chevron believes the project
was properly analyzed and permitted."
One hundred workers out of the 1,000 employed on the
project have been laid off and more will be let go in the
coming weeks, Tippen said.
Zuniga's order provides a 60-day period for Chevron to
demobilize the project, but that work cannot include any new
construction, according to the order.
Tippen said the community would lose between $50 million
and $75 million in workforce income along with $61 million
Chevron had agreed to donate to the city of Richmond.
Richmond will also lose the improved environmental
performance the refinery would have gained from greater
efficiency and environmental upgrades, he said.
The Richmond City Council granted the permits last summer
after a contentious debate. Opponents of the project believe
the hydrogen plant will allow the refinery to run heavier
grades of crude oil, which contain pollutants like mercury and
Chevron began construction on the hydrogen plant along with
a cogeneration unit in September. The company has said both are
needed to replace outdated equipment and make the refinery more
competitive in today's markets.
Large U.S. refiners have been switching their plants to run
cheaper, heavy crude oils to reduce costs and increase profits.
Hydrogen is used to reduce sulfur content and increase the
fuels refined from heavy crude oil.
Under Zuniga's order, the Richmond City Council must set
aside construction permits issued for the project and cannot
issue any new permits until the environmental impact report
complies with California law.
The lawsuit to halt the project was brought by California
Green organizations Communities for a Better Environment, Asian
Pacific Environmental Network and West County Toxics
"The residents of Richmond do not accept letting Chevron
continue to poison our community," said Tom Nompraseurt of the
Asian Pacific Environmental Network in a statement.
The 245,271-barrel-per-day refinery is Chevron's oldest,
having operated for 107 years. It is the largest refinery in
the San Francisco Bay area and the third largest in California,
the largest U.S. motor fuel market.
California drivers receive most of their motor fuels from
the state's refineries or from imports delivered by ship. There
are no pipelines shipping refined products through the Rocky
Mountains from refineries in the Midwest and Gulf Coast.
(Editing by Christian Wiessner)