Sustainable Business

California county says Marathon, Phillips projects may need to shrink due to environmental impact

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U.S. oil company Phillips 66 headquarters in Houston, Texas, U.S., September 27, 2020. Picture taken September 27, 2020. REUTERS/Gary McWilliams/File Photo

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Oct 15 (Reuters) - California's Contra Costa County said on Friday that oil refiners Marathon Petroleum (MPC.N) and Phillips 66 (PSX.N) may need to reduce capacity of proposed renewable plants by about 50% and 20% respectively to mitigate environmental impact.

The two petroleum refiners are planning to convert oil refineries in the San Francisco-area county to produce transportation fuel from feedstocks such as soybean oil and animal fats that produce less greenhouse gas emissions.

Contra Costa is required to identify an environmentally superior option to the projects under the California Environmental Quality Act.

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The county said it would be an "environmentally superior option" for Marathon to process 23,000 barrels per day of fuel instead of the planned 48,000 barrels per day in a draft environmental impact report (EIR) released Friday.

The draft EIR will be available for public comment for at least 45 days, the county said.

To reduce environmental impacts of a similar project at Phillips 66's Rodeo, California site, the county identified the refiner could supply 102,000 bpd of renewable fuels to the regional market instead of 120,0000 bpd using only two pre-treatment trains, which would cut down the number of marine vessels needed.

The county said Marathon's project would reduce air emissions from the plant due to less feedstock being processed. However, it said emissions from the facility and other nearby development would still exceed "regional air quality thresholds of significance, and this impact would remain cumulatively significant and unavoidable."

Environmental advocates have said demanded the county consider the effects on water, air quality and food prices.

Marathon said Friday that it is conducting a study to determine whether the use of "green hydrogen" would be feasible at the facility at a later date. Using hydrogen is necessary to produce renewable fuels.

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Reporting by Laura Sanicola; Editing by Cynthia Osterman

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