Pittsburg: Proposed WesPac oil-by-rail shipping terminal is dead

From Contra Costa Times.

December 9, 2015.

Sam Richards

A controversial plan that had generated fierce local opposition to convert a moribund PG&E tank farm into a massive regional oil storage facility is dead after the company proposing the project backed out, company officials confirmed Wednesday.

WesPac Midstream LLC’s proposed Pittsburg Terminal Project no longer makes economic sense, a company official said, because of the major drop in oil prices nationally and a glut in the oil market. It’s a situation uncertain to reverse in the future, said Art Diefenbach, WesPac’s Pittsburg project manager.

“With the lower oil prices, we couldn’t finalize potential agreements with customers, and we couldn’t drag things out,” Diefenbach said.

There was a huge demand when the project was first proposed in 2011, he said, with higher oil prices as recently as June 2014. But that demand has leveled out, and a quick turnaround is considered unlikely, Diefenbach said.

Others agree. At the ongoing United Nations climate conference in Paris, Fatih Birol, executive director of the International Energy Agency, said, “When we look at 2016, I see very few reasons why we can see growth in the prices.”

The end of the project was cheered by opponents; there were many, including the local Pittsburg Defense Council, other local individuals and regional environmentalists. Reasons for opposition were myriad, critics said, ranging from the threat of an explosion at the terminal to prospective ground pollution issues to the vapors from the storage tanks, as well as promoting fossil fuels over greener forms of energy.

The old tanks are less than a half-mile from hundreds of houses and apartments on West 10th Street and in the downtown area between Eighth Street and the waterfront. More than 5,000 people had signed a petition opposing the project, which as initially proposed would have received 88 million barrels annually of domestic crude oil shipped by rail, as well as imported crude brought in by marine vessels, to a 125-acre parcel next to what is now the NRG power plant.

In April, WesPac eliminated a proposed key element of its project — unloading as many as five 104-car oil trainloads a week at the Pittsburg facility. Diefenbach said Wednesday that removing trains from the project didn’t further imperil it directly but also noted that trains running from the oil boom areas of North Dakota, Montana and Saskatchewan, Canada, had a shorter run to and from Northwest terminals than to the East Bay.

“We were doing email blasts all (Tuesday) afternoon,” said Kalli Graham, of the Pittsburg Defense Council. “This is definitely a cause for celebration.”

The news became public with the posting Tuesday afternoon of the Pittsburg City Council’s Dec. 14 meeting agenda. A “status report on the WesPac project” said the company on Nov. 16 “submitted a formal request to withdraw their application completely and terminate all work on the project.”

CCT-WESPACOUT-1209-90Though he believes the terminal and the trains could have operated safely, Diefenbach said public opposition was one of a number of noneconomic factors behind abandoning the terminal project.

Opponents believed from the start that the project was dangerous and even got state Attorney General Kamala Harris to weigh in against it.

“WesPac had a big fight on its hands; there is pretty much no one in Pittsburg that wanted this,” said Graham. “We don’t have to be worried about it anymore.”

City Council members Pete Longmire and Will Casey said Tuesday night that the council never received enough details about the project to make informed decisions on its value. Even after four years of start-and-stop proposals, it was still early in the planning process. Pittsburg City Manager Joe Sbranti said WesPac will pay for all the city staff time spent on the early planning for the terminal.

“I was neutral on the project,” Longmire said. “I know this (WesPac) decision will make a lot of people in our city happy. But there are people in our city who wanted it to come, with the jobs it would have provided.

“The knife cuts both ways,” he said.

 

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