Phillips 66 getting another shot at rail spur plan for Nipomo refinery

A Feb. 4, 2016 San Luis Obispo County Planning Commission hearing about a Phillips 66 Co. proposal to build a rail spur allowing it to bring crude oil by rail to its Nipomo refinery. Some supporters brought signs promoting the jobs the refinery provides.
A Feb. 4, 2016 San Luis Obispo County Planning Commission hearing about a Phillips 66 Co. proposal to build a rail spur allowing it to bring crude oil by rail to its Nipomo refinery. Some supporters brought signs promoting the jobs the refinery provides. dmiddlecamp@thetribunenews.com

A new round of public hearings on the proposed Phillips 66 Co. oil-by-rail plan is set to begin March 13, this time in front of the San Luis Obispo County Board of Supervisors as they consider whether to uphold or overturn a decision made in October by the Planning Commission to reject the proposed rail spur.

County staff on Friday released the agenda for the hearing, which may last up to five days, with hundreds of residents from across the state again expected to weigh in on the proposal. Phillips 66’s plan involves building a 1.3-mile rail spur to its Nipomo refinery so that it can bring crude oil by train to the facility. Phillips has applied to the county to build the spur and related facility upgrades so that it can bring three trains per week — each carrying up to 2.2 million gallons of crude oil — to the refinery.

Phillips 66 has petitioned the San Luis Obispo Superior Court to stop the Board of Supervisors from hearing the issue, but Judge Barry LaBarbera issued a tentative ruling Thursday to deny that motion. A final ruling is expected within a week.

Unless LaBarbera changes his tentative ruling, the Board of Supervisors is expected to move ahead with a hearing to decide whether it agrees with the Planning Commission to deny the land use permit application that Phillips 66 submitted in 2013.

Supervisor John Peschong, who was elected in November, has confirmed that he will recuse himself and not vote on the issue. Before he announced his candidacy, his political consulting and public affairs firm received $262,313 from Phillips 66.

“My company has worked for Phillips 66 in the past, and I stated when I got into the race that I would recuse myself from it because it’s the right thing to do,” Peschong said Friday. “I am not even planning on watching or attending.”

That leaves four supervisors able to vote: Debbie Arnold, Lynn Compton, Bruce Gibson and Adam Hill. If the vote results in a 2-2 tie, the Planning Commission ruling would stand and the project application would be denied.

During the lengthy, multiday Planning Commission hearings last year, hundreds of people from across California spoke in opposition to the project. Residents and elected officials along the rail line from San Francisco to Los Angeles pleaded with the county to deny the permits and prevent an increase of oil-filled train tanks from rolling by their homes, schools and businesses with the potential for derailment.

Environmentalists raised concerns about climate change and rejected the notion of increased fossil fuel infrastructure.

Several hundred Phillips employees, union representatives and local business owners urged the Planning Commission to approve the project, saying the refinery provides about 200 well-paying jobs, has a good safety record and has been generous with community grants.

The Planning Commission ultimately voted 3-2 to reject the project in October in front of a large audience that gave commissioners a standing ovation.

Phillips 66 pushes back

Phillips 66 challenged the Planning Commission action in two ways: It appealed the commission’s decision, sending the issue to the Board of Supervisors, and the company filed a petition in Superior Court challenging the legality of the decision.

The thrust of the legal argument centers on a land use ordinance that says property in the coastal zone may be designated as Environmentally Sensitive Habitat Area, and is therefore undevelopable. Such property can be legislatively mapped or the county’s Planning and Building Department can determine that a property proposed for development has unmapped ESHA. Phillips 66, in the court filing, argues that the department may determine there is unmapped ESHA only before it accepts the developer’s application as complete.

The Planning Commission accepted the application as complete in 2013, then three years later, “after Phillips 66 had invested substantial resources” the department “did an about-face and made a determination that Phillips 66’s site had undeveloped unmapped ESHA,” the petition reads.

The court has not ruled on that argument, so Phillips 66 also petitioned the court to stop the Board of Supervisors from continuing with the process until a ruling on the original petition is made.

In a recent motion, the company accused the Board of Supervisors of “running roughshod over this litigation, without the slightest interest in or deference to what the court has to say about petitioner Phillips 66 Company’s claims.”

LaBarbera, the Superior Court judge, heard arguments from Phillips 66 and the county Thursday and then issued the tentative ruling allowing the supervisors to move forward.

Letters from the ‘blast zone’

In preparation for the upcoming hearing, dozens of letters in opposition to the oil-by-rail plan have already been received by the Board of Supervisors, some from residents as far north as Chico, in addition to local residents using the rally cry “Derail the Spur.”

State Sen. Bill Monning, D-Monterey, submitted a letter urging the board to reject the project because of “significant and unavoidable threats” posed by rail cars with the potential to derail. He cites rail accidents in West Virginia and Ontario, Canada, with “devastating oil spills” and subsequent fires that resulted in cleanup costs of up to $4 billion.

Concern of train derailment is echoed in letters from cities, businesses and residents along tracks that would carry trains pulling oil tankers across Northern California. A resolution in opposition was submitted by the city of Milpitas; the president of Bellarmine College Preparatory in San Jose submitted a letter; a San Jose resident wrote, “My home is in the blast zone.” One letter that supervisors received is simply a photo of a pile of burning tank cars with a message, “Disaster waiting to happen, it can happen here … 

Phillips 66, which operates refineries in 11 states, has said the project is safe and will create jobs.

“We take safety measures in all projects we do. This one is no different,” said Dennis Nuss, Houston-based director of media relations.

Monica Vaughan: 805-781-7930, @MonicaLVaughan

To participate

When: The hearing will start at 9 a.m. March 13 with a county staff report and a presentation by Phillips 66, followed by public comments. The hearing may continue each day through March 17, beginning at 9 a.m. each day.

Where: In the Board of Supervisors Chamber, SLO County Government Center, 1055 Monterey St. in San Luis Obispo. Overflow seating will be available in the conference room outside the board chambers, the lobby and at the nearby Fremont Theater.

To speak: Those interested in speaking during any part of the hearing must sign up between 8 a.m. and 4:30 p.m. March 13 at a “Speaker Sign-Up” table inside the Fremont Theater, 1035 Monterey St. No additional speaker sign-ups will be accepted on subsequent days..

Details: Those interested in submitting digital information, such as a PowerPoint or digital photos, must indicate the request to staff when signing up to speak. Flash drives will need to be labeled with your speaker number.

Related stories from San Luis Obispo Tribune