Above photo: Large storage tanks at the Marathon Refinery in the Wilmington neighborhood of Los Angeles. Robert Hanashiro-USA TODAY.
In the Los Angeles area alone, 11 new tank projects are underway, mainly in communities of color.
Magali Sanchez-Hall, usually in motion, pauses for a moment on the sidewalk to gaze through a chain-link fence at the massive new construction project: tanks shaped like giant tuna fish cans that will store crude oil.
The Los Angeles refinery has been her troublesome neighbor for a quarter of a century, but she finds this latest turn particularly perplexing.
“Right now, we are supposed to be moving to clean energy,” she says.
Sanchez-Hall, 50, raised her children here before getting a master’s degree in public policy. When Tesoro, now Marathon Petroleum Corp., first proposed the new tanks in 2016, she opposed them, citing sickening fumes from the ones already there.
“It’s a poor neighborhood, we don’t have air conditioners, so we leave the windows open,” she said. “To put new tanks in, just to store more oil, it’s not rational.”
As climate change strikes the U.S. in devastating ways — flooding in Miami, blackened forests in California and weeks of choking air across the entire West — the shift toward a lower-carbon economy is well underway. The new Big Energy companies own renewable, not oil, assets; governments are setting dates to phase out gasoline-powered cars, and investors are wholeheartedly backing green technology.
Governors in California, New Jersey, Louisiana and Colorado have laid out ambitious timetables for ramping down climate emissions, with each demanding a plan to reduce them by at least 80% by 2050.
Yet in these same states, oil companies are being granted approval for projects that will tie their financial success to fossil fuel production for decades to come.
Companies say they need the buildouts to make their operations more efficient, to lease out for income or to seize new export opportunities.
These 11th-hour investments also are adding toxic emissions to the air in low-income communities already carrying heavy environmental burdens.
In the Los Angeles area alone, 11 new tank projects are underway, mainly in communities of color. At the largest, the one near Sanchez-Hall, the refinery says it needs the additional space to store more crude oil.
New Jersey authorities approved 14 storage tanks at Tremley Point near the Bayway refinery that serves New York and beyond. In Louisiana, Ergon Moda St. James got a permit to put up 20 giant tanks to store gasoline. And Weld County, Colorado, commissioners agreed to let Phillips 66 build two large crude oil tanks and other equipment along the planned Liberty pipeline that would travel from the Bakken oilfield to Oklahoma. Local communities tend to pay close attention to these tanks. That’s not just because tanks are a link in the fossil fuel chain — they make hydrocarbons available on demand — but because they leak, and the vapors they emit can be unhealthy.
The Marathon Los Angeles Refinery near Sanchez-Hall’s home bridges the Los Angeles harbor neighborhood of Wilmington and the city of Carson. Marathon Petroleum Corp. is building six new tanks, each 69 feet high and 240 feet across. The company is among the largest refiners in the country: 13 states, 16 refineries, 3 million barrels a day.
The South Coast Air Quality Management District (AQMD), responsible for protecting air quality in the Los Angeles basin, counted the myriad pollution sources already in the area and found that petroleum refining is the largest single contributor of volatile air contaminants. That is striking, considering that the area includes major ports and freeways with heavy truck traffic. It’s so heavily polluted that it was one of only 13 communities chosen out of 307 nominated for inclusion in California’s community-led air pollution reduction program.
The new tanks will take their place near dozens of existing tanks that operate all day, every day, their roofs rising as they fill, and sinking as they empty into refinery distillers. Homes sit as close as 1,300 feet away. Within a few blocks of the refinery perimeter are some 15,000 households with about four people per home, over half of this population Latino, who earn one-fifth less than the state’s median household income.
Sanchez-Hall, now a community scholar at the UCLA North American Integration and Development Center, said she can often smell the refinery.
“We would have to close the windows every morning around 7 a.m.,” she said. “It’s a really bad smell that gets into your head and makes it impossible to breathe.”
She’s concerned the new tanks will mean more fumes. Data back up her concerns.
If you’ve ever spilled gasoline at the pump, you’ve witnessed its tendency to go airborne. Tank hydrocarbons can be like that. The roofs that float on top of the liquid are intended to prevent evaporation, and those vapors catching fire, exploding, or leaking. But these roofs can still leak around their perimeters, and fumes also can escape the tanks through valves, flanges and other places where there is a meeting or connection.
Tanks are an outsize source of fumes at a refinery, researchers have found. “In our experience, tank emissions contribute approximately two-thirds of the total refinery emissions,” said a team of scientists, who later took measurements at more than 100 industrial facilities.
In a review of 16 studies published last summer in Environmental Health, researchers found residents who live near refineries, in so-called fence-line communities, had a 30% increased risk of developing leukemia.
Why This Buildout, Why Now
To arrive at the Los Angeles refinery, crude oil is transported in supertanker ships that dock at special berths at Southern California ports. The ancient liquid comes from Ecuador, Iraq, Saudi Arabia and elsewhere. It empties into a pipeline connection at the dock and, from there, it’s routed north 3 1/2 miles to Marathon’s Carson Crude Terminal and refinery.
In official documents, the company said the increased storage of crude will not translate into any significant increase in fuel production. Community groups argued the tanks were part of an expansion. After six years of dispute, the company’s argument won out in the environmental impact report, in an analysis by an independent petroleum engineer, and, after community groups sued, in state appeals court.
The company said the reason for the tank expansion is that the biggest supertanker ships hold so much crude – about 1.8 million barrels each – that it strains the loading capacity of even this facility, the largest refinery on the West Coast. Before tankers can finish unloading, they must detach from the berth and anchor nearby, polluting the air with engine emissions while they wait.
Douglas Miller, former vice president for California value chain strategy for Tesoro Companies – since purchased by Marathon – said in a declaration filed with the environmental impact report that companies like his must pay shippers for this waiting time. These new tanks will save 20 to 25 cents on every barrel of oil, Miller said – potentially $400,000 in savings per cargo load.
Marathon did not respond to questions sent via email or subsequent queries, but the environmental impact report, like the petroleum engineering report, says the new tanks will reduce pollution levels for portside residents because the supertankers will spend less time in the harbor.
Julia May, senior scientist with Communities for a Better Environment, maintains the new tanks are clearly an expansion.
“What they left out,” she said, “was if you can bring ships in and out more quickly, that allows more ships to come in.”
Circumstances surrounding these projects vary. In Colorado, the planned tanks and pipeline would bring in “over $1 million in annual property taxes to Weld County and a one-time sales tax of more than $1 million for the materials and equipment to build the facility,” according to the Liberty joint venture website.
Governor John Bel Edwards has been a strong supporter of new petrochemical development near the St. James storage tanks, an oil hub on the Mississippi River. The tanks to store gasoline at Tremley Point in New Jersey will be filled with refined product from the Phillips 66 refinery next door, meaning increased local business at a site that is already a marine terminal.
The skyrocketing availability of oil brought on by the shale boom beginning in 2008 spurred a buildout of pipelines and storage, especially along routes to the Gulf Coast.
Another powerful factor in this buildout, globally, is private capital seeking higher returns. Some years ago this capital zeroed in on storage tanks as a fresh opportunity, said Frank Schreurs, managing director of In-Energy, a boutique energy advisory firm in the Netherlands.
“It’s like real estate,” he said. “You build your infrastructure and then you get a rental person in, and they pay you a fixed fee for using the infrastructure.”
Many of the new tank farms would probably not have been built if not for these funds, Schreurs said, adding: “There is so much money it is almost scary.”
But in a sign of the heavy question mark hanging over oil, none of those three facilities has been built yet.
A spokesman for Phillips 66 said the company has deferred the Liberty pipeline project with its tanks “due to the challenging business environment.” The same is true for the tanks in New Jersey. Ergon and Moda Midstream declined to comment about their unbuilt project in Louisiana.
What’s clear is that the oil industry has been having difficulty borrowing for its capital-intensive projects as climate change realigns lending rules, which has added to other hurdles, such as flat demand and lengthy court battles.
A Long-Understood Undercount
In Los Angeles, if the new Marathon tanks don’t represent an expansion of the refinery as a whole, they do represent an expansion of storage – that is their purpose. According to government documents, storage capacity at the refinery will increase by nearly a third, from 11 million barrels to more than 14 million barrels.
The tanks also will leak and give off vapors, a fact that stands out starkly in the state’s engineering report. They will, for example, have 608 flanges that are estimated to leak seven pounds of volatile organic compounds per year. They will have 668 connectors estimated to leak nearly three pounds per year. Combined with what are referred to as tank breathing emissions, each of the six tanks is expected to release 20 pounds of volatile gases daily.
This is the reality with tanks. Documents for the petroleum tank projects in New Jersey and Louisiana accept that there will be leaks, too. The new tanks in St. James Parish are permitted to emit approximately 270 pounds per day.
The environmental report for the Los Angeles tank project notes that its estimates represent a worst-case scenario, based on a hypothetical mix of crude oil that leans toward tar sands, a sludgy petroleum deposit consisting of mostly sand, water, clay and bitumen.
Some emissions may well be even higher than these official estimates, though. That’s because when regulators evaluate whether a community will suffer too much exposure to a potent chemical like benzene from a new project, they do not actually measure. Instead, they estimate using something called emissions factors – a sort of lookup table where you plug in the size of the project and the chemical you intend to put in the tank, along with other parameters.
When officials truth-tested that method a few years ago in Los Angeles, they found it deficient. They hired a Swedish university spinoff company called FluxSense Inc. to measure actual refinery emissions over two months at all six major refineries in Los Angeles.
Their report revealed that the method routinely used by authorities doesn’t come close to accurately predicting benzene emissions. On average, Los Angeles refineries release 34 times more benzene than they report. The FluxSense report found that Marathon was even worse, emanating 43 times more benzene than the company reported. As a result, the company fixed several problems pinpointed by researchers.
Benzene has been known to be harmful for so long that when California first gained the authority decades ago to make its air quality regulations tougher than those of the federal government, benzene was among its highest priorities.
People with repeated exposure to benzene can develop leukemia. It also depresses blood cell counts and can lead to anemia. It can damage the immune system, is toxic for unborn babies and affects male fertility.
“Any benzene exposure is a concern regardless of exposure length,” California’s environment health agency, the Office of Environmental Health Hazard Assessment, said in a recent refinery study.
Four years later, the study’s findings have not been integrated into the way Los Angeles air officials grant permits. Air officials in California acknowledge that dangerous emissions remain undercounted.
“I think it is pretty well known that there is underreporting of fugitive emissions from storage tanks,” Dr. Sarah Rees, assistant deputy executive officer at the South Coast AQMD, said during a meeting of the Wilmington/Carson/West Long Beach Community Steering Committee.
The air district says that it hasn’t integrated the much-higher benzene measurements into its permitting because the method is not certified in the United States. The agency just convened a working group to update its methods.
Officials also pointed to fence-line air testers now mounted on the perimeter of most California refineries. Communities have been asking for those monitors for years, but their calls seemed to gain traction after a fire at the Chevron refinery in Richmond in 2012 sent more than 10,000 people to the hospital.
In Louisiana, the faith-based environmental group RISE St. James, with the Louisiana Environmental Action Network and Louisiana Bucket Brigade, opposed the tank farm in their already highly polluted African American neighborhood. Parish Councilman Clyde Cooper was able to get a commitment for fence-line air testers there.
At refineries at least, federal authorities and some states seem to be taking air issues more seriously.
In 2013, the governor of California created an Interagency Refinery Task Force, which aims to “work collaboratively to achieve the highest possible level of safety for refinery workers and local communities.” In 2015, the U.S. Environmental Protection Agency adopted rules intended to clean the air around refineries across the nation, requiring for the first time that levels of benzene be measured around refinery perimeters. And in 2017, the California Air Pollution Control Officers Association and Air Resources Board called for more monitoring and community awareness around refineries, a call it repeated two years later.
Of course oil infrastructure reaches far beyond refineries, which are only one endpoint. Another comes where petroleum products get switched from pipeline to ship or river barge, or loaded into trucks to supply the gas stations.
Tanks serve a crucial function at these terminals, too. They bridge inevitable pauses in the relay chain, said Cathy Landry, spokeswoman for the International Liquid Terminals Association. Oil or gasoline doesn’t just get shipped out the second it arrives, she said; “It is batched, so diesel might go out next week and this week is gasoline.”
Are the Days of New Infrastructure Numbered?
The delay in building already–permitted projects may signify a tipping point. Even some oil companies have announced plans to zero out their carbon emissions.
Nearly two decades after passing the world’s first tailpipe climate law, after a year when oil companies wrote down billions of dollars in assets, when ExxonMobil was removed from the Dow Jones industrial index, when California’s governor announced that no new internal combustion cars would be sold beginning in 2035, the South Coast AQMD still says it does not consider climate change in permitting decisions for oil companies.
“We review permit applications,” the agency said. “There is no requirement currently to limit any buildout of fossil fuel infrastructure.”
Americans still buy hundreds of millions of gallons of gasoline a day. But sales have been pretty flat for the last 18 years.
The Intergovernmental Panel on Climate Change says fossil fuel use must ramp down sharply each year to have a better than even chance of climate change shy of catastrophic.
Amol Phadke, a senior scientist at the University of California, Berkeley, who specializes in energy technology policy, thinks it’s time, noting the huge advances that have been made in recent years in clean technology.
“I think we should not be building new fossil infrastructure,” he said. “We should be phasing it out.”