Calif. Refinery Faces Increasing Hostility in Company Town
January 4, 2013
The Chevron refinery's massive oil storage tanks sit on the hills overlooking this small, impoverished city in San Francisco's East Bay. Painted earthen red to blend with the natural surroundings, the tanks cannot help dominating the city's skyline, much the way the oil giant itself has long shaped Richmond's identity, economy and politics.
But Chevron's grip on Richmond's politics began to loosen a few years ago after left-wing anti-corporate activists seized control of the City Council and mayor's office. In an area of the country where high-tech companies tend to coexist peacefully with affluent municipalities, perhaps nowhere have locals and a giant corporation rubbed shoulders with such intensity as in Richmond.
If city leaders likened themselves to anti-oil-company fighters in Nigeria, Ecuador and other developing oil-rich nations, Chevron's response would not have been out of place in the Niger Delta. It has spent millions of dollars on social programs and community-building here, as well as on friendly politicians.
Now, Chevron will get an inkling of whether its new strategy is working as the city weighs the company's plans to rebuild a critical unit damaged in a major fire in August. Chevron says it wants to complete repairs this month at the refinery, where production has been cut in half since the fire.
Not so fast, the city says.
At a recent raucous public hearing, Mayor Gayle McLaughlin stood up to criticize Chevron, leaning on a pair of crutches after knee surgery. The mayor pointed out that the company had yet to provide documents requested by federal regulators, who are expected to release a report on the cause of the fire early this year. To applause, the mayor said, "In terms of response and transparency, I have concerns."
At issue is Chevron's choice of metal to replace a 5-foot-long, 8-inch carbon-steel pipe that became corroded and sprang a leak in August. The resulting fire sent plumes of black smoke into the air, spewing emissions of sulfur dioxide, as the authorities warned Richmond residents to stay indoors. Thousands went to emergency rooms with various health complaints. Chevron says it will compensate residents with valid claims for medical and property expenses, although it has not said how many of the 23,700 claims it has received will qualify.
The selection of a metal alloy called 9 Chrome will make the new pipe resistant to the kind of corrosion that affected the carbon-steel pipe, Chevron says; while the city's own metal consultants confirm that the material meets industry standards, critics say there could be better choices.
The larger issue is the trust between Chevron and Richmond, which has deteriorated since the fire.
For most of the past century, Richmond was a loyal company town. As Chevron officials invariably point out, the refinery was built 110 years ago, three years before Richmond was incorporated as a city. Richmond grew around the refinery, which has remained the city's biggest employer and taxpayer.
Then, in the 1990s, transplants from nearby Berkeley and San Francisco began gravitating here, drawn to Richmond's affordable rents and adding a radical tinge to the city's traditionally moderate Democratic leanings. Ms. McLaughlin, a member of the Green Party, was elected in 2006, making Richmond the largest American city to be led by an official from her party; like-minded candidates grabbed seats on the City Council.
Not surprisingly, Richmond and Chevron became locked in lawsuits over the payment of various taxes. More significant, with the help of allies in environmental groups, Richmond has blocked Chevron's plans for a major upgrade that the company says is essential to the refinery's future.
"They went through a period of time when they took a very hard-line, confrontational position with the City of Richmond, and I don't think it was working for them very well," said Tom Butt, a councilman who has been critical of Chevron and who won re-election in November, despite the oil company's support for three other candidates. "They were facing a situation where the majority of the City Council were not their friends, and so they decided to try a different position."
Sean Comey, a Chevron spokesman, said the company felt the need to adopt a new strategy toward Richmond, though he did not go as far as to acknowledge that it was a direct response to the city's changing politics.
"Probably about four, five years ago, we sat down to really reassess what the state of our relationship was with the community where we had been for more than 100 years - and it wasn't where we wanted it to be," Mr. Comey said.
Chevron began increasing its social investments in Richmond, in everything from community gardens and holiday events to safety and educational programs. Next year, the company is planning to start a five-year, $15.5-million economic development and educational initiative on top of its social investments, which totaled $5 million this year.
"Richmond kind of gets into your blood," said Andrea Bailey, Chevron's manager of community engagement in Richmond. "There's so much going on, and there's this precipice of greatness. It's exciting."
Many, though, remain skeptical. Chevron's community spending, they say, shares the same goal as its political contributions: buying support.
In November's election for three City Council seats, Chevron funneled $1.2 million into committees supporting three pro-Chevron candidates and opposing the company's two most vocal critics, including Mr. Butt. Two of the three Chevron-backed candidates won.
Mr. Butt did not face direct opposition from Chevron's committee but said he still harbored "hard feelings" about Chevron's political involvement.
"They want a City Council loyal to them," he said. "I think it's wrong for a corporation to pour that kind of money into a local election. Nobody can match that."
Nathaniel Bates, a longtime councilman strongly supported by Chevron in the recent election, said that the company's critics "just want to use it for political purposes."
Mr. Bates praised the company's increasing community spending. "They're trying to be good neighbors," he said.
It is too soon to tell whether Chevron's new strategy of winning over Richmond will pay dividends. But in a recent tour of some locations where Chevron had focused its community spending, company officials sounded upbeat.
"I think we're making some headway in this community," said Mr. Comey, the spokesman.
Ms. Bailey, the manager of community engagement, added: "It's interesting. After the fire, we've done some polls, and we still have a favorability with over 50 percent of the residents. That says a lot, especially after an incident like that."
Source: The International Herald Tribune
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