Evergreen Islands Comments on Tesoro Anacortes’ Xylene Plant on March Point

by Tom Glade Wednesday, March 23, 2016 4:20 PM

August 14, 2015

To: Dale Pernula, Director

Skagit County Planning & Development Services

1800 Continental Place

Mount Vernon, WA 98273

Cc: John Cooper, Skagit County Planner/Geologist

Jan Hasselman, Earthjustice

Evergreen Islands Board of Directors

Re: Comments PL15-0302, Shoreline Substantial Development

Tesoro Anacortes Clean Products Upgrade Project (CPU)

The following comments submitted are submitted on behalf of Evergreen Islands and its members regarding the application of Tesoro Refining and Marketing Company.

Introduction

Evergreen Islands has the following major concerns about the likelihood of significant adverse environmental impacts regarding Tesoro’s “Clean Products Upgrade (CPU) Project” proposal:

  • The establishment of a marine oil export terminal for petroleum products.
  • The increased marine oil shipping (5 tankers & barges/month) in the Salish Sea.
  • The potential for shipping crude oil from the proposed marine oil export terminal without a full environmental impact analysis

Discussion

Marine Export Terminal

Essentially Tesoro is proposing to modify its March Point wharf to serve as an oil product export terminal. Tesoro Clean Products Update project proposes to manufacture, store and ship mixed xylenes “by marine vessel via the existing Anacortes wharf facility.”[1]

Correspondingly, Tesoro’s SEPA checklist[2] states that “the proposed Clean Product Update Project will increase vessel traffic in Fidalgo Bay by up to five (5) marine vessels per month for transportation of feedstock and finished products to and from the existing Tesoro Wharf.”

The following sections provide background as to the potential oil export applications or opportunities provided by Tesoro’s Clean Product Update project.

Oil Product Exportation

A Reuters’s article[3] in 2014 states the following (emphasis added):

Tesoro Corporation (NYSE:TSO) today announced plans to produce petrochemical feedstock in its U.S. West Coast refining system. The Company intends to gather intermediate feedstock, primarily reformate, from its West Coast refining system for xylene extraction at Anacortes, Washington. The initial investment, estimated to be around $400 million, is designed to recover up to 15,000 barrels per day of mixed xylene. The mixed xylene will mainly be exported to Asia and is used to make polyester fibers and films for clothing, food packaging and beverage containers.

Additionally, “supplemental feedstock to the Aromatics Recovery Unit (ARU) will be received from outside sources by marine vessel and unloaded using the existing refinery wharf system.”[4]

The Nexus between Tesoro’s Vancouver Terminal & the Tesoro’s Clean Products Upgrade Project

The EFSEC Scoping Notice[5] describes Tesoro’s proposed Vancouver Terminal as follows:

Tesoro Savage Petroleum Terminal LLC (Applicant) is proposing to construct and operate the Tesoro Savage Vancouver Energy Distribution Terminal (Project). The proposed Project, at full operation, will receive up to an average of 360,000 barrels of crude oil per day from Midwest North America at the Port of Vancouver, WA (Port) in Clark County. Crude oil received by rail will be unloaded on site, stored temporarily, then loaded onto marine vessels at the Project site, primarily for delivery to refineries located on the United States West Coast.

Note that Tesoro’s proposed marine terminal at Vancouver and Tesoro’s proposed marine terminal on March Point are conceptually the same – 1) receive an oil product by train, 2) store an oil product, and then 3) export the oil product by tanker or barge.

A July 2015 letter[6] from the Port of Vancouver to Governor Inslee’s office describes the progress of the Draft Environmental Impact Statement as follows:

We are now in month 22 of this 12-month process, and we just received word that the Draft Environmental Impact Statement (DEIS) is once again delayed and not scheduled to be released for public comment until November 2015.

If you, the SEPA responsible official, fail to issue a Determination of Significance for Tesoro’s proposed marine oil terminal, Tesoro will be able to skirt the requirements to evaluate the environmental impacts that were required of the Tesoro’s proposed marine oil terminal in Vancouver.

Since the March Point refinery currently is permitted to import 50,000 bbl/day by oil train and the proposed the Vancouver oil terminal will import 360,000 bbl/day by oil train, the March refinery’s potential for exporting crude oil are significantly (~ 1:7) than the proposed Vancouver oil terminal. However the March Point refinery receives crude oil from several sources, whose supply may increase in the future.

Tesoro Can Import More Bakken Crude Oil Than Originally Planned

The SEPA Checklist[7] for Tesoro’s ‘Crude Oil Unit Railcar Unloading Facility’ stated that the facility “will be designed to accommodate one loaded 100 car unit train every other day.”

An August 2014 article[8] in the Anacortes American reports that Tesoro plans to import more Bakken crude oil than Tesoro initially declared. The American article states the following (emphasis added):

Tesoro Corporation will be shipping more Bakken Shale crude oil to its March Point refinery than originally planned once its new rail unloading facility is up and running.

The announcement was made during the company’s 2012 second quarter report on Aug. 1.
The refinery originally expected to ship and receive an average of 30,000 barrels of crude per day. The refinery is now permitted to receive 50,000 barrels per day, according to the report. The company announced in March the amount was going up to 40,000 barrels per day with an expected unit train arriving at the facility every other day to start.
The most recent numbers add up to one unit train six days a week, President and CEO Greg Goff said, according to Reuters news service. Each unit train will have 100 dedicated rail cars.

Tesoro’s Potential to Ship Bakken Crude Oil to Its Kenai Refinery

A June 2013 Petroleum News-Bakken article[9] states, “Tesoro headquarters says there is some discussion about taking the oil, via tanker, to the company’s Kenai refinery at Nikiski on Southcentral Alaska’s Kenai Peninsula.”

A later Petroleum News-Bakken article[10] in February 2014 states, “Tesoro also shipped a barge load of Bakken crude from the West Coast to its refinery in Kenai, Alaska, in 2013 during a turnaround at the Anacortes refinery in March, with positive economic results.”

A May 2015 Argus News article[11] states the following (emphasis added):

Tesoro will deliver 1.6mn bl of Bakken crude into its Alaska refining system in the first half of 2015 as the midcontinent crude continues to upend traditional west coast slates.”

Tesoro plans to use a 360,000 b/d proposed rail offloading terminal in Vancouver, Washington, to supply its west coast refining system including Kenai with greater volumes of Bakken crudes.

US Export Ban May Be Lifted

An article[12] in the July 2015 edition of the Puget Sound Business Journal states the following (emphasis added):

Last week, top executives of four leading U.S. oil companies sent a joint letter to the chairman of the House Energy and Commerce Committee, pressing for repeal of the 30-year ban on crude oil exports.
“Allowing U.S. crude oil access to world markets will help expand American exports in general, create benefits for our economy and U.S. consumers, and promote a more resilient global oil market,” said the letter, signed by Shell, Exxon-Mobil, Chevron Corp. and BP Fuels

Kinder Morgan Trans Mountain Pipeline

The Kinder Morgan website[13] describes the Trans Mountain Pipeline as follows (emphasis added):

In operation since 1953, the Trans Mountain pipeline system (TMPL) is the only pipeline system in North America that transports both crude oil and refined products to the west coast. TMPL moves product from Edmonton, Alberta, to marketing terminals and refineries in the central British Columbia region, the Greater Vancouver area and the Puget Sound area in Washington state, as well as to other markets such as California, the U.S. Gulf Coast and overseas through the Westridge marine terminal located in Burnaby, British Columbia. Only crude oil and condensates are shipped into the United States.

TransMountain_Map_thumb1

http://www.kindermorgan.com/content/docs/TransMountain_Map.pdf

In Washington State, the Trans Mountain Pipeline[14] provides product to the BP Amoco Cherry Point Refinery, Conoco Philips Ferndale Refinery, Tesoro Anacortes Refinery, and the Shell Anacortes Refinery.

In December 2013, Kinder Morgan filed “comprehensive application with the NEB (Canada’s National Energy Board)” for the Trans Mountain Pipeline Expansion Project. According to the Kinder Morgan website[15] (emphasis added), “Filing of the application initiated a regulatory review of the proposed expansion facilities. If the regulatory application process is successful, construction of the new pipeline could begin in 2016. The expanded pipeline would be operational in late 2018.

The Naphtha Hydrotreater (NHT) Expansion

Tesoro’s SEPA Checklist[16] states that the Naphtha Hydrotreater (NHT) will be expanded “to process 46,000 barrels of naphtha per day.”

In April 2010, the Naphtha Hydrotreater ruptured killing seven Tesoro employees. The U.S. Chemical Safety and Hazard Investigation Board’s accident investigation report[17] states the following (emphasis added):

On April 2, 2010, the Tesoro Refining and Marketing Company LLC (“Tesoro”) petroleum refinery in Anacortes, Washington (“the Tesoro Anacortes Refinery”), experienced a catastrophic rupture of a heat exchanger in the Catalytic Reformer / Naphtha Hydrotreater unit (“the NHT unit”). The heat exchanger, known as E-6600E (“the E heat exchanger”), catastrophically ruptured because of High Temperature Hydrogen Attack (HTHA). Highly flammable hydrogen and naphtha at more than 500 degrees Fahrenheit (ºF) were released from the ruptured heat exchanger and ignited, causing an explosion and an intense fire that burned for more than three hours. The rupture fatally injured seven Tesoro employees (one shift supervisor and six operators) who were working in the immediate vicinity of the heat exchanger at the time of the incident. To date this is the largest fatal incident at a US petroleum refinery since the BP Texas City accident in March 2005

U.S. Chemical Safety and Hazard Investigation Board issued Recommendation 2010-08-I-WA-15[18] to the Tesoro Anacortes Refinery. The recommendation is as follows:

Implement a process safety culture continuous improvement program at the Tesoro Anacortes Refinery including a written procedure for periodic process safety culture surveys across the work force. The process safety culture program shall be overseen by a tripartite committee of Tesoro management, USW representatives, Washington State Department of Labor and Industries – Division of Occupational Safety and Health, and the U.S. Environmental Protection Agency. This oversight committee shall:

  • a. Select an expert third party that will administer a periodic process safety culture survey;
  • b. Review and comment on the third party expert report developed from the survey;
  • c. Oversee the development and effective implementation of action items to address identified process safety culture issues; and
  • d. Develop process safety culture indicators to measure major accident prevention performance.

The process safety program shall include a focus on items that measure, at a minimum, willingness to report incidents, normalization of hazardous conditions, burden of proof of safety in plant process safety programs and practices, and management involvement and commitment to process safety. The periodic process safety culture report shall be made available to the plant workforce. The minimum frequency of process safety culture surveys shall be at least once every three years.

The status of the recommendation is “Open - Acceptable Response or Alternate Response,” which is defined as “Response by recipient indicates a planned action that would satisfy the objective of the recommendation when implemented, including a written timetable for completion.”

Refinery Water Consumption

Chapter 4[19] of the 2011 Anacortes Water System Plan states the following:

Anacortes is unique in that it has two large industrial customers that comprise the bulk of the consumption. Shell and Tesoro collectively account for 69% of consumption. The rest of Anacortes’ retail consumption (residential and commercial) collectively represents 10% of consumption. The remaining 21% of consumption is attributed to Anacortes’ various wholesale customers.

Table 4-4 of the plan indicates that both the Shell Refinery and the Tesoro Refinery each use over 2 billion gallons of water per year.

Governor Inslee’s statewide drought declaration[20] states the “snowpack is at historic lows, rivers are dwindling and irrigation districts are cutting off water to farmers.”

However the SEPA Checklist makes no mention of potential increases in water consumption.

Conclusion

Evergreen Islands recommends that you, Skagit County’s responsible official for SEPA projects, issue a Determination of Significance requiring an Environmental Impact Statement that will answer the following questions as to a whether this project “is likely to have a significant adverse environmental impact”:

  • What are the impacts of the increased oil vessel traffic (5 tankers & barges/month) in the Salish Sea?
  • What is the potential for crude oil exportation from Tesoro’s marine terminal update
  • How many oil trains traverse Skagit County each week?
  • How many oil trains does the Tesoro refinery receive per week?
  • Will the number of oil trains per week increase as due to the production of xylene?
  • If the number of oil trains increase, will Skagit County delay approval of Tesoro’s application until the EIS for the Shell Puget Sound Refinery is completed?
  • What are the Marine Vapor Emission Control (MVEC) Emissions due to Displaced Marine Vessel Vapors ?
  • What are the Marine Vapor Emission Control (MVEC) Emissions due to Assist Gas?
  • What are the Marine Vapor Emission Control (MVEC) Total Emissions?
  • What are the Xylene Oil Storage Tank Emission Rates?
  • What are the Xylene Storage Tank’s Toxic Air Pollutant (TAP) Emissions?
  • What are the Clean Product Update project’s Daily Emissions and Annual Emissions?
  • Will the Marine Terminal be used to ship crude oil, especially highly explosive Bakken Crude Oil, to Tesoro’s Kenai refinery or other West Coast refineries?
  • Regarding the Naphtha Hydrotreater, is Tesoro complying with the U.S. Chemical Safety and Hazard Investigation Board’s safety recommendations?
  • Will the Naphtha Hydrotreater unit be “super safe” such that no further loss of life occurs?
  • If the project results in an increase in the number of oil trains traversing Skagit County, will Skagit County postpone the approval of the project until the Shell EIS is completed?
  • In this time of severe drought statewide, will the project consume more water from the Anacortes?
  • If the Tesoro/Savage oil export in Vancouver is further delayed, will Tesoro start exporting Bakken Crude from the CPU marine terminal?

Attachment 1 includes additional environmental impact study scoping questions adapted from the EIS Scoping for the proposed Tesoro Savage Vancouver Energy Distribution Terminal project.

Respectfully yours,

clip_image002_thumb6

Tom Glade

President, Evergreen Islands


REFERENCES


[1] Joint Aquatic Resources Permit Application (JARPA), “Clean Products Upgrade (CPU) Project,”

Tesoro Refining & Marketing Company LLC, June 22, 2015. p. 7.

[2] State Environmental Policy Act Checklist, “Clean Products Upgrade Project,”

Tesoro Refining & Marketing Company LLC, June 22, 2015. p. 33.

[3] Ibid. p. 7.

[4] “Tesoro Savage Vancouver Energy Distribution Terminal”, Determination Of Significance Scoping Notice,

Energy Facility Site Evaluation Council (EFSEC), October 1, 2013.

[5] “Tesoro Corporation Announces New Petrochemical Feedstock Project,” Reuters, July 21, 2014

http://www.reuters.com/article/2014/07/21/idUSnHUGW4GCqa+1ec+ONE20140721

[6] Letter from Port of Vancouver to Governor Jay Inslee, “Regarding the DEIS Schedule”, July 7, 2015.

http://www.efsec.wa.gov/Tesoro%20Savage/20150707PortVancLtr.pdf

[7] Skagit County SEPA Checklist, “Tesoro Unit Train Unloading Facility,” July 25, 2011. p.2

[8] “100-car unit train expected at Tesoro this month,” Anacortes American, August 15, 2012

http://www.goanacortes.com/news/entry/100_car_unit_train_expected_at_tesoro_this_month

[9] “Bakken oil to feed Kenai refinery?” Petroleum News Bakken, June 03, 2012.

http://www.petroleumnews.com/pntruncate/980524821.shtml

[10] “Tesoro finishes year of accomplishments”, Petroleum News Bakken, February 16, 2014.

http://www.petroleumnews.com/bkpdfarch/5890767.pdf

[11] “Tesoro moves Bakken to Alaska”, Argus News, May 08, 2015.

https://www.argusmedia.com/pages/NewsBody.aspx?id=1036420&menu=yes

[12] “Big oil push for crude exports could bring more oil trains through Washington state”,

Puget Sound Business Journal, July 27, 2015.

http://www.bizjournals.com/seattle/news/2015/07/27/big-oil-push-for-crude-exports-could-bring-more.html

[13] “Trans Mountain Pipeline System,” Kinder Morgan website.

http://www.kindermorgan.com/pages/business/canada/transmountain.aspx

[14] “Trans Mountain Pipeline & Puget Sound Pipeline Delivery & Receipt Locations,” Kinder Morgan website.

http://www.kindermorgan.com/pages/business/canada/delivery_receipt_locations.aspx

[15] “Trans Mountain Pipeline Expansion Project,” Kinder Morgan website.

http://www.kindermorgan.com/pages/business/canada/tmx_expansion.aspx

[16] Ibid 2, p. 8.

[17] “Investigation Report,” U.S. Chemical Safety and Hazard Investigation Board, April 2, 2010, p.1.

http://www.csb.gov/assets/1/7/Tesoro_Anacortes_2014-May-01.pdf

[18] “Tesoro Refinery Fatal Explosion and Fire,” U.S. Chemical Safety and Hazard Investigation Board

http://www.csb.gov/tesoro-refinery-fatal-explosion-and-fire/

[19] City of Anacortes 2011 Water System Plan; Chapter 4, Planning Data and Demand, p. 4-7.

http://www.cityofanacortes.org/docs/Engineering/WaterSystemPlan/Chapter_4.pdf

[20] “Governor declares statewide drought emergency,” The Office of the Governor, May 15, 2015.

http://www.governor.wa.gov/news-media/governor-declares-statewide-drought-emergency


ATTACHMENT 1

ENVIRONMENTAL IMPACT STUDY SCOPING ISSUES

Environmental Impact Study Scoping Issues

Will reasonable alternatives to the proposed project be considered, including consideration of alternative sites, alternative transportation routes, and alternative sources of energy?

What are the impacts from air emissions, dust, and odors from facility operations; including possible health effects from release of air toxics? Includes general comments regarding air quality and air pollution?

What are the impacts from exhaust emissions from diesel-electric locomotives?

What are the impacts from exhaust emissions from marine vessels operating on the Salish Sea or moored at the loading dock

What are the effects on global climate change?

What are the cumulative impacts from other past, present, and reasonably foreseeable projects on the project site or in the project vicinity?

What are the cumulative impacts associated with other crude oil and coal terminal projects, including associated rail and marine operations? Category includes general

What are the impacts at point of resource extraction and/or end use?

What are the best practices for national energy policy, fossil fuels vs. renewable energy (wind, solar, biofuels), and energy conservation?

What are the impacts on fish, wildlife, and vegetation?

What are the potential onsite impacts on fish, wildlife, vegetation, wetlands, threatened and endangered species from construction and operation of the proposed project, including habitat removal, introduction of exotic plants and invasive marine organisms; disturbance, displacement, and direct mortality from construction activities; and oil spills in upland areas or in the marine vessel loading area?

What are the potential offsite impacts on fish, wildlife, vegetation, wetlands, or threatened and endangered species from increased marine vessel operations on the Salish Sea, including the introduction of invasive marine organisms; disturbance, displacement, or direct mortality due to collisions, propeller strike, or wake stranding, and impacts from a limited or catastrophic oil spill involving a tanker?

What are the potential offsite impacts on fish, wildlife, vegetation, and threatened and endangered species from off-site train operations, including disturbance or direct mortality due to collisions, disruption of migration routes, and impacts from a limited or catastrophic oil spill and/or fire?

What are the hazards associated with onsite geology, soils, erosion, earthquakes, liquefaction, including the shoreline area?

What are the geologic conditions along rail or marine transportation routes?

What are the impacts to archaeological resources, historic buildings, or tribal concerns?

What is the volatility of crude oil and the risk of fire and/or explosion at the project site (including security/terrorism concerns)?

What is the volatility of crude oil and the risk of fire and/or explosion along rail or marine transportation routes (including security/terrorism concerns)?

What are the concerns about oil spills at the project site and the marine loading area?

What are the concerns about oil spills along rail and marine vessel transportation routes?

What are the impacts of noise from plant operations?

What are the impacts of noise along rail and marine transportation routes?

Is there release of toxic or hazardous materials from disturbance or excavation of contaminated soils or sediments located on the project site?

Will studies study of potential acute/chronic health effects from exposure to air toxics, particulates, and contaminated water due to normal operations and/or accidental releases or spills be conducted?

What are the adequacies of existing emergency plans and the ability of the local police departments, fire departments, and emergency medical personnel to respond to major accidents that result in catastrophic oil spills, explosions, or fires at the project site or vessel loading area?

What are the adequacies of existing emergency plans and the ability of local police departments, fire departments, and emergency medical personnel to respond to derailments, collisions, other accidents that result in catastrophic oil spills, explosions, or fires along offsite rail transportation routes?

What are the adequacies of existing emergency plans and the ability of local police departments, fire departments, emergency medical personnel to respond to vessel collisions, groundings, or other accidents that result in catastrophic oil spills, explosions, or fires?

What are the abilities of plant operators and the BNRR to implement emergency response plans and spill response plans in the event of train derailments or collisions, vessel loading mishaps, vessel collisions and groundings, or other accidents resulting in limited or catastrophic oil spills?

Is the proposed project consistent with adopted land use plans and zoning?

What is the compatibility of the proposed project with nearby residential land uses and Padilla Bay National Estuarine Research Reserve and the Fidalgo Bay Aquatic Reserve

What is the purpose and need for the project?

What are the increased demands on public services (police, fire, emergency medical services) and public utilities (water, sewer, electricity) during normal plant operations?

What are the potential negative effects on local and regional recreational resources (i.e. parks, trials, and the Salish Sea, the San Juan Island Archipelago, Padilla Bay and Fidalgo Bay)?

What are the positive impacts on jobs, economic growth, and local and state tax revenue?

What are the negative impacts on property values, quality of life, attraction of new residents and businesses, and tourism?

What are the potential impacts from plant construction and operation on local vehicular traffic and safety and transportation in general?

What are the impacts from concerns over increased numbers of oil tankers operating on the Columbia River, including the increased risk of ship collisions and groundings?

What are the impacts from concerns over increased train traffic in the Vancouver metropolitan area and along major rail corridors in Washington State, including increased traffic delays and delays to emergency vehicles at railroad crossings, interference with the movement/circulation of people and goods, and increased risk of derailments and accidents?

What are the visual or aesthetic impacts of the new facility on existing views or vistas?

What are the visual or aesthetic impacts of additional trains operating in Skagit County

What are the potential impacts on bays, rivers, streams, ground water, and aquifers near the project site from limited or catastrophic oil spills?

What are the potential impacts on the Skagit River, Padilla Bay, Fidalgo Bay, the San Juan Island archipelago and the Salish Sea from limited or catastrophic oil spills?

What are the potential impacts on bays, rivers, streams, and aquifers located along major rail routes from limited or catastrophic oil spills?

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