SLO County supervisors deny Phillips 66 oil-by-rail appeal

The San Luis Obispo County Board of Supervisors has denied Phillips 66 Co.’s proposal to build a rail spur that would allow it to deliver 6.6 million gallons of crude oil by rail each week to its Nipomo Mesa refinery.

The supervisors’ vote to uphold a Planning Commission decision denying the project does not mean it’s dead, however. Phillips 66 can appeal to the 12-member California Coastal Commission and continue to fight the county’s decision in court.

The 3-1 vote Tuesday to reject the company’s appeal was met with cheers and applause from a crowd of county and statewide residents, some of whom have fought the project for years over concerns that any derailment along the route could be catastrophic.

“I’m excited to see the supervisors stand with the people in this community and beyond by denying this dangerous, dirty and detrimental project,” said San Luis Obispo Mayor Heidi Harmon, who was one of the nearly 200 people to testify in a two-day public hearing on the issue.

“Coming from a climate change organizing background … I’m especially grateful to see this train go down,” Harmon said.

Supervisors Lynn Compton, Adam Hill and Bruce Gibson all voted to deny an appeal Phillips 66 had filed after the county Planning Commission voted 3-2 in October to reject the company’s 2013 land-use application to build a 1.3-mile rail spur from its South County refinery to the main rail line. The refinery is in Compton’s South County district.

Supervisor John Peschong recused himself and didn’t participate in the hearing because Phillips 66 Co. is a former client of his.

Phillips 66 can now appeal to the 12-member California Coastal Commission or continue to fight the county’s decision in court.

Phillips 66 spokesman Paul Adler offered only a brief comment after the board’s vote Tuesday.

“We presented a strong proposal and will review the concerns raised today and will consider all of our options,” Adler said.

Supervisor Debbie Arnold cast the dissenting vote after she expressed concern about the price of gasoline and diesel and speculated that without trains, shipments of crude oil would instead come by truck.

“I disagree with my colleagues that we should outright deny this project,” she said. “In arguably the tightest regulatory climate in the nation, we can make the findings to approve this project with conditions that mitigate many of the concerns we’ve heard.

“The thing we can’t mitigate is the movement of crude oil and other flammable materials on the mainline tracks. Neither can Phillips 66,” Arnold continued. “Trains will continue to move through our county with or without this project. I will be lobbying federal representatives myself to address rail safety and railroad infrastructure.”

Hill and Gibson were both brief in their comments before the vote; neither expanded on their reasons to deny the appeal.

“It has been, quite frankly, heartening to see so many people engaged in an issue that I believe they have sincere concerns about and rightful concerns about that are supported by the record,” Hill said.

Phillips 66 had proposed building the rail spur and related infrastructure at its Nipomo Mesa refinery, so that it could bring in three 80-car trains per week, each carrying 2.2 million gallons of crude oil. Each train would have three locomotives and two buffer cars.

Phillips 66 had argued that it needs additional sources of oil to stay competitive and the alternative would be to truck in oil.

The company appealed the Planning Commission decision on several points, including an allegation that commissioners missed a deadline when they determined 20 acres on the proposed site contain sensitive plant species and are designated under the Coastal Zone Land Use Ordinance as Environmentally Sensitive Habitat Area — or ESHA — that cannot be developed.

The company said it spent millions of dollars and three years on the project proposal before the county determined ESHA had been identified.

Phillips 66 took the county to court on that issue. San Luis Obispo Superior Court Judge Barry LaBarbera ruled against the company last week because the issue was pending before the Board of Supervisors. The judge did rule that the company could file an amended complaint about an issue raised regarding the constitutionality of the ordinance.

Gibson argued that the coastal zone should be interpreted to take into account scientific findings made throughout the county’s “natural review process.”

While Compton made the motion to deny the company’s appeal, she disagreed with county staff findings on that issue. She said companies need some kind of certainty when they submit an application that the county won’t make a finding “at the last minute.”

Still, she voted to accept the staff findings and reject Phillips’ appeal, because “besides the job aspect and the aspect that a corporation has the right to do things in their own self-interest, I can’t find any conditions that would mitigate the concerns that I have.”

“If I were to vote for this project, I’d be voting expressly against the neighbors of the project,” Compton said.

The board decision came in the second day of a public hearing that drew both supporters and opponents.

Proponents of the project cited the need to protect the 200 well-paying jobs at the refinery and pointed out the facility’s good safety record as reasons for approving the rail spur.

A handful of people spoke in favor of the project during the hearing, including Oceano resident Ian Maarquardt, who argued that crude oil is going to get to the refinery and a train derailment would be less environmentally devastating than an accident with a pipeline, truck or marine vessel.

Among the project’s opponents are volunteers with the Mesa Refinery Watch Group, who “are ecstatic,” Laurance Shinderman said after the vote. He and other county residents, most of whom are retired, have spent countless hours researching the company’s plans, organizing presentations at various boards and councils and keeping interested residents informed of project developments through a regular newsletter.

“We’d like to thank our own supervisor, Lynn Compton. I’m sure she’s had a lot of pressure because she comes from the more conservative end of the spectrum. She stood up to Big Oil. That should be noted,” Shinderman said.

Opposition to the rail project grew over the years to include a number of environmental organizations. Speakers at the hearing had traveled from Benicia, Davis, Sacramento, San Jose, Santa Cruz and more to compel the board to defend the dense areas of their communities from the risk of what some called “bomb trains.”

Grover Beach was one of the first cities to officially oppose the plan, in part because of the potential 24 pounds per day of diesel particulate emissions in the county associated with the rail spur projects.

“The part of the (environmental impact report) that I could not get over is the daily air pollution that these trains were going to bring into my town, into my kids’ lungs, into their friends’ lungs. That pollution cannot be mitigated,” Grover Beach Mayor Pro Tem Mariam Shah told the board Tuesday.

While opponents of the project were reveling in the victory, they said they know it’s not over.

“We are thrilled. This is a real vindication of the efforts of communities through the state to protect their communities and environment,” said Linda Krop, a staff attorney with the Environmental Defense Center.

“We expect that Phillips will appeal this decision to the California Coastal Commission, but having a denial by the board and the supervisors is critical to that process,” Krop said. “The fact that the county examined issues so closely and held so many hearings will hopefully influence that decision.”

Before the board vote, refinery superintendent Jim Anderson thanked the supervisors and addressed the residents who neighbor the Phillips 66 facility.

“While we disagree on this issue with some of our neighbors, we respect their point of view. We’ve been good neighbors and we’ll continue to be good neighbors, we’re committed to that,” Anderson said.

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