Greens Thwart Gasoline Production

Four-plus-dollar gasoline is forcing Americans to realize that we
need increased domestic oil production to meet our ever-growing demand
for affordable fuel. But even if the greens lose the political battle
over drilling offshore and in places like the Arctic National Wildlife
Refuge, they nevertheless are way ahead of the game as they implement a
back-up plan to make sure that not a drop of that oil ever eases our
gasoline crunch.

The Sierra Club and the Natural Resources Defense Council, or NRDC,
successfully pressured the U.S. Environmental Protection Agency to
block ConocoPhillips’ expansion of its Roxana, Ill., gasoline refinery,
which processes heavy crude oil from Canada, the Wall Street Journal
reported on Monday.

The project would have expanded the volume of Canadian crude
processed from 60,000 barrels per day to more than 500,000 barrels a
day by 2015. After the Illinois EPA had approved the expansion, the
green groups petitioned the federal EPA to block it, alleging
ConocoPhillips wasn’t using the best available technology for reducing
emissions of sulfur dioxide and nitrogen oxides.

Apparently, the plant’s planned 95 percent reduction in sulfur
dioxide emissions and 25 percent reduction in nitrogen oxides wasn’t
green enough. NRDC’s opposition is quite ironic since ConocoPhillips
and the activist group actually are teammates in the global warming
game. Both belong to the U.S. Climate Action Partnership, a coalition
of eco-activist groups and large companies that is lobbying for global
warming regulation.

So even though ConocoPhillips is aiding and abetting the NRDC to
achieve the green dream of absolute government control over the U.S.
energy supply, the enviros still are in take-no-prisoners mode,
refusing to allow the expansion of a single refinery.

Imagine what the rest of us can expect from the greens.

Meanwhile, in California, green groups are working through the state
attorney general’s office to block the upgrade of the Chevron refinery
in the city of Richmond. The $800 million upgrade essentially would
expand the useable oil supply by permitting the refinery to process
lower-quality, less-expensive crude oil.

California Attorney General, ex-Gov. and climate crusader Jerry
Brown claims the upgrade will produce an additional 900,000 tons of
greenhouse gas emissions per year. But Chevron says the upgrade
actually will reduce the emissions by 220,000 tons.

Whose figure is closer to the truth?

It’s hard to know for sure at this point, but it’s worth noting that
material false statements made by Chevron are prosecutable under the
federal securities laws and California state law, while Brown and the
activists pretty much can say whatever they want without legal

Whatever the facts are, Brown and the city of Richmond insist that
Chevron eliminate 900,000 tons of greenhouse gas emissions so that the
upgrade will be "carbon neutral." While the greens remain vehemently
opposed to the project, it seems their plans for blocking the refinery
might go awry as Brown and the local government eventually may side
with Chevron rather than the greens, but only because the company has
deep pockets and is open to being shaken down.

Brown and the city have proposed that Chevron ensure that half the
total emissions-reduction projects be undertaken on-site at the
refinery and the other half be done either in the city of Richmond
itself or elsewhere in California.

Translating the latter part of this "offer that can’t be refused:"
Chevron essentially must purchase 450,000 tons of "carbon credits"
annually from the city of Richmond or the state. As the street value of
carbon credits is about $10 per ton, Chevron is being "green-mailed" to
the tune of perhaps $4.5 million per year to upgrade its refinery —
amounting to perhaps a 1 percent annual "tax" on the gains in gross
revenue produced by the upgrade. And the local government officials are
not the least embarrassed about this extortion.

"When you’re dealing with a refinery where the project will cost
close to a billion dollars and someone like Chevron with tremendous
resources, that’s not a constraint, so they should do everything
possible," an unidentified state official told Carbon Control News in a
June 9 article.

The farcical nature of the entire transaction is underscored by that
state official’s apparent lack of understanding about how greenhouse
gas-induced global warming is supposed to work.

The official told Carbon Control News that the greenhouse gas
emission reductions "are vital to protect low-income minority
communities in the Richmond area, which already suffer disproportionate
pollution impacts."

Climate alarmism, of course, is based on the notion of global
emissions causing global warming, not local emissions causing local
warming; moreover, the allegation that low-income minority populations
are disproportionately harmed by industrial emissions — the basis of
the so-called "environmental justice" concept of the 1990s — hasn’t
stuck since no scientific evidence supports it.

Though green and local government shenanigans can be a source of
endless amusement, let’s get back to the main point. As the 2005
hurricane season dramatized, oil production, itself, is only one factor
in determining gasoline supply and prices.

Damage to Gulf Coast refineries by hurricanes Katrina and Rita
reduced gasoline supplies and increased prices worldwide — a real
problem given that U.S. refineries operate at or near capacity thanks
to other green constraints.

We may produce all the oil we need, but if we can’t refine it, then
it won’t do much for reducing gasoline supply problems. So while
working to expand domestic drilling, we’ll simultaneously need to
expand domestic refining capacity.

It will be quite the Pyrrhic victory to finally produce oil from ANWR and then not be able to do anything with it.

Steven Milloy publishes and He is a junk science expert, advocate of free enterprise and an adjunct scholar at the Competitive Enterprise Institute.