Refinery Operations in Los Angeles County

By Matt Goldberg

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Oil refinery operations have a long history in Los Angeles County dating back to the early 1900’s. There are currently 6 major companies operating oil refineries in LA County. These include: Chevron (El Segundo), ConocoPhillips (Wilmington and Carson), Exxonmobil (Torrance), Tesoro (Wilmington), and Valero (Wilmington) as well as BP (Carson), which is currently in the process of being sold to Tesoro. These 6 companies provide a majority of the petroleum products in Southern California, as well as Arizona and Nevada. These refineries are located near major population centers and have had major impacts on their surrounding communities. This research paper will give a general background of how refineries work, focusing on a few of these refineries. It will also look at some of the negative health impacts these refineries have had on the local population, as well as any struggles the local communities have had in dealing with the companies operating the refineries.

All oil refineries essentially operate in the same way. They take the crude oil that is extracted from wells and make it usable for many different products that we use in our everyday life. Two characteristics are important in determining the quality of crude oil; it’s density and sulfur content. The density is described as being heavy, intermediate, or light. The heavier and thicker, the more work the refinery must to do turn the oil into a usable form, so light is preferable. The other characteristic is the Sulfur content. Low sulfur is considered “sweet”, while high sulfur content is sour. Oil companies look for light and sweet crude oil because that is easiest to turn into usable form. Once in a refinery, oil goes through three processes : Distillation, Conversion, and Alkylation (Oil to car). During these phases, oil goes through a de-sulfurization processes to remove this unwanted chemical. Distillation uses heat to separate petroleum into different products. During this phase, gasoline rises to the top because it is the lightest and of the highest quality, while the oil that will eventually turn into asphalt sinks to the bottom (Oil to car). Once separated, these components are processed further in conversion units, which changes the chemical makeup of the various levels of oil that were separated out. In this phase, crude oil is fully converted into finished products like gasoline. After this phase, gasoline, diesel, and other fuels are move to other parts of the refinery for the final product. Once refined, it is then blended with other additives to make transportation fuels and other chemicals. One of the major differences between refineries is how the crude oil gets to the refinery. In Los Angeles, the most used method for getting the crude oil to the refinery is to have a pipeline connecting the refinery a barge that is located a mile off the coast (Oil to Car). Other methods include using trains and trucks to bring in the crude oil from other places. In California, 45% of the crude oil that comes into the refineries in the state comes from Iraq, Saudi Arabia, and Ecuador. The rest either comes locally from California, which has a well developed system of pipelines throughout the state, or from Alaska (Oil to Car).

The top six oil refineries in Southern California combine to refine 54% of the total oil that is refined in California and 6% of the nation’s capacity to refine oil. Below is a table and a map showing the top six refineries, their location, and the barrels of oil per day they produce.

Source (Oil Refining Capacities, updated for 2011 figures)

The table shows that though there are six major refineries in Los Angeles County, the two top refineries combine to refine over half the total oil that is refined in the County. The BP refinery is in the process of being sold to Tesoro, and once the sale goes through in 2013, the percentage of oil that is refined by Chevron and Tesoro will become even greater (Ronald White, LA Times). The fact that so much of the oil comes from a select few refineries has major consequences for Southern Californians and for the people who live near in the communities near these refineries. The rest of this research paper will focus on these consequences and the effects these refineries, and in particular Chevron, have had on the surrounding local communities and on Los Angeles County in general.

The Chevron El Segundo is the largest producing refinery on the west coast of the U.S. This Chevron refinery is also one of the oldest on the west coast (History of California). Chevron has been refining oil here since 1912, and even since has played a major role in the development of this community, so much so that the city was named after the refinery (El Segundo Refinery Overview). The main products of this refinery are transportation fuels, including gasoline, jet fuels, and diesel (El Segundo Refinery Overview). The refinery uses over 141 million gallons of fresh water a month, covers approximately 1,000 acres, and makes use of 1100 miles of pipelines (El Segundo Refinery Overview). The net income of Chevron from 2011 was $26.9 billion, and the total output of oil for the company is 1.8 million barrels per day. This means that a significant percentage of their output comes from their El Segundo refinery.

While Chevron is clearly profiting from their refinery in El Segundo, there are downsides for the people in El Segundo to having a refinery in their backyard. One of the major threats to the health of the local population living near a refinery is the emissions that result from a refinery’s activities. Emissions from refineries in Los Angeles County are tracked by the South Coast Air Quality Management District, which posts their results online. According to the website, Chevron’s emissions target for Sulfur Oxides for the year of 2012 is 95,160 pounds, but the website currently only provides data from January to March of 2012 (AQMD). The website also provides data for emissions of Carbon Monoxide, Nitrous Oxides, Particulate matter, and Reactive organic gases. All of these types of pollutants have negative impacts on the health of the local community and on the local environment. Another major issue to communities near oil refineries is the threat of a gas flare. Flaring at refineries is known to cause many emissions of chemical compounds that are very dangerous to human health including Sulfur Dioxide, volatile organic compounds and methane (Ross and Rosk, ABC News). Gas flares may also emit cancer causing compounds like benzene and other hydrocarbons. When there is a gas flare at a refinery, the company is required by law to report it to the Air Quality Management Board. On the year to date, the Chevron El Segundo refinery has reported seven flares.

The public has very little access to what goes on in these refineries. Websites for these companies provide a bare overview to the refinery operations, and the most of the public does not know how to interpret the raw data that the refinery provides to the AQMD. The refineries would rather have the public not know about many of the negatives associated with their operations and will stop any attempts to uncover more information. Attempts to get more information about what these refineries do and how they operate proved futile by this author. On two occasions someone from public relations was reached, but they were unable to provide any information that cannot be found on their website and directed all questions about their emissions to the AQMD. A few of the refineries offer tours of their facilities to the local community once a year, but only people with a government issued ID that says they live within a certain radius of the refinery will be allowed on the tour. The tour offers people a chance to see, from a bus, where the oil is refined and learn some things about the process, but since the tours are run by the company who owns the refinery, they only provide one perspective of their operations. In many cases, the only publicity that these refineries want are when they attempt to influence public opinion by generating good will about the company through donations to institutions like schools and public libraries in the local community. For example, Chevron donates around $200,000 annual to schools in the El Segundo community (Contributions, Chevron). Donations are beneficial to the community, but the amount they donate is a very small percentage of the companies operating income and they do not outweigh the negative externalities like damages to the environment and to human health that are caused by the refinery. Companies and refineries like Chevron’s El Segundo refinery also have significant influence on the local politics of the community they operate in. This often allows them to avoid any increases in taxes and stop further attempts to regulate their industry, which benefits their bottom line but hurts the local community by denying cities revenue (Gottlieb, LA Times). Ultimately, these refineries rarely want any publicity about what goes on there, and they do want people to know about the potential downsides that people face when they have an oil refinery in their backyard.

Oil refinery operations in Los Angeles County not only influence people in their local community, but also the County and state in general. The reason for this is that they supply a majority of the gasoline and fuel products, which everybody in the state relies on. This means that the margin for error at these refineries is very small and the tiniest malfunctions can have extremely broad implications for many people. For example, in early October, the Exxonmobil refinery lost power for a few hours, which caused it to flare gases for the next week and also reduced the supply of gasoline to Southern California, which increased gas prices to record highs (Dailynews). Another recent example came in early August when Tesoro’s plant went offline on August 18th because of a “trip” (Bisenger, LA Times). This caused gas prices to spike the next day and it lasted for a couple weeks. The oil companies operating these refineries essentially have a monopoly on oil in Southern California. This is because California and the west coast are not connected to the oil refineries in the gulf coast, where a majority of the oil in the U.S. is recovered. While there is enough supply to meet demand on a normal day, something even if it is insignificant, can have a major impact on gas prices. The Tesoro purchase of the BP refinery in Wilmington, CA will only increase the monopoly oil companies have because it will mean that a majority of the refined oil in Los Angeles County will come from just two companies: Chevron and Tesoro. Another cause of spikes in gasoline and the supply shortage that sometimes faces California is that the state has strict air quality regulations, meaning that only certain kinds of gasoline can be produced and sold within California. While this is certainly good the for the environment, it means that consumers may have to deal with random price spikes in the foreseeable future.

The refineries in Los Angeles County have been around for decades and some, even longer than that. The trend has been towards more of these refineries consolidating under the same company. Once the BP sale to Tesoro is complete, there will be two companies responsible for much of the oil that is refined in Southern California. The effect of these oil refineries on human health and the potential to for major chemical releases into the atmosphere and fires are some of the greatest downsides of these refineries. The companies that own these refineries do help out their local communities, through charitable donations but this is often done because it is more cost-effective for them than to pay more in taxes or greater regulations. They also also help out local communities because they contribute the most to the town’s revenue, but they still lobby a great deal to avoid any increases in taxes, even though many of the companies have record profits every other quarter. The oil refineries in Los Angeles County will continue to play a major role in everything from gas prices, people’s health, the environment, and the jobs that they provide to thousands of people, for the the foreseeable future.

About the Author: Matt Goldberg is a Junior currently attending the University of Southern California. His majors are Environmental Studies and History. He hopes to be working towards making better environmental policy someday.

Works Cited

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