Phillips 66 may increase number of oil trucks rolling through SLO County

Drive the route oil trucks take to Phillips 66 Co.’s Nipomo refinery

Amid San Luis Obispo County's debate over Phillips 66 Co's proposed oil-by-rail project, the company has continued to deliver oil to its Nipomo Mesa refinery via oil tanker trucks. This video shows the winding route from Highway 101 to the Phillips 66.
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Amid San Luis Obispo County's debate over Phillips 66 Co's proposed oil-by-rail project, the company has continued to deliver oil to its Nipomo Mesa refinery via oil tanker trucks. This video shows the winding route from Highway 101 to the Phillips 66.

Phillips 66 may amp up trucking oil as an alternative to moving oil by rail after the San Luis Obispo County Board of Supervisors rejected the plan to import up to 6.6 million gallons of crude each week by train to increase supply to the company’s refinery in South County.

That could mean 819 tanker trucks full of oil rolling through the county every week, according to a document that analyzed alternatives to the rail plan.

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Phillips 66 spokesman Paul Adler said last week the company has not decided whether to propose that level of trucking “at this time.” Decision-makers are “still examining all the options,” he said.

Hundreds of tanker trucks a week already deliver oil to the refinery on the Nipomo Mesa, called the Santa Maria Refinery, and to a pump station in Santa Maria to fill a supply gap created by the shutdown of the Plains All American Pipeline in Santa Barbara County in May 2015. Phillips 66 has not said exactly how many oil tanker trucks are delivering to the refinery, but a current land-use permit limits all truck traffic — whether bringing in crude or moving out petroleum coke product — to an average of 367 trucks a week.

A temporary one-year permit issued by the county Air Pollution Control District in May 2016 for the truck-to-refinery operation is set to expire in May. The county has said it likely won’t renew that permit until Phillips 66 settles a fine of potentially $100,000 owed for alleged violations.

The possibility that Phillips 66 could again increase oil trucking to the refinery was cited by Supervisor Debbie Arnold as one of the reasons she cast the sole vote on March 15 to allow Phillips 66 to build a 1.3-mile rail spur from its Nipomo Mesa refinery to the main rail line, opening up access to oil fields across North America.

“My fear is the decision today puts more trucks hauling flammable materials on our roads, our already crumbling roads, with our many, many distracted drivers, creating a higher risk for accidents than train transport would,” Arnold said during that Board of Supervisors meeting.

Three supervisors — Lynn Compton, Bruce Gibson and Adam Hill — voted to uphold a Planning Commission decision to reject the company’s land-use permit for the rail spur. Supervisor John Peschong recused himself because Phillips 66 is a former client.

Among the options facing the multinational energy company is whether to appeal the county’s decision to the California Coastal Commission.

Truck deliveries to SLO County have already increased

Nipomo residents say the Phillips 66 trucks travel all hours of the day and night, from Highway 101 to Willow Road to the refinery off Highway 1.

The drivers “drive safely and slow,” said Laurance Shinderman of the Mesa Refinery Watch Group, which opposed the oil-by-rail proposal because of the potential for a catastrophic derailment.

“They’re not barreling down the road,” Shinderman said of the trucks. “They are professional drivers, you can tell.”

But there are concerns about the turn from Willow Road to Highway 1 that some say is dangerous, in part because of speeding cars.

The average number of trucks allowed under the company’s land-use permit is 52.5 per day, but daily traffic fluctuates. Neighbors saw the most frequent truck traffic in 2016 during the month of December when 1,608 trips were made in and out of the facility, according to a compliance report. Averaged over the month, that number of trips falls just within the daily limit set by the land-use permit.

The county Air Pollution Control District may not issue a new permit when a temporary permit for the operation expires in May.

The county discovered that trucks were carrying oil into the facility during a Planning Commission hearing on the rail spur project in April and issued a notice of violation May 10 for the operation of a crude oil tanker truck receiving rack at the refinery.

The district said use of any equipment that may cause air pollution requires a permit, and the district must be notified in writing before any changes are made to equipment operations.

Phillips 66 denies it violated its operating agreement and disagrees that a new permit was needed because there was no net increase in truck trips. As supply of crude declined, so did production at the refinery and the number of trucks leaving the facility with petroleum coke and sulfur, according to a letter from Phillips 66 to the county. Still, the company agreed to obtain a permit and paid a fee to use the truck receiving rack.

“We do not believe a permit is required to continue this activity,” the letter said. “However, the District has requested a permit application, and we are willing in this instance to acquiesce in that request.”

The county issued a fine for the amount of time the company was operating the receiving rack without a permit. The amount of the penalty is being negotiated, but it’s likely that it was assessed at about $100,000, based on a fee of $1,000 a day for the time between when the trucking allegedly began, Feb. 10, 2016, until the temporary permit was issued May 23, 2016.

“It’s not likely we would issue (another permit) until they settle the existing violation,” said Gary Willey, manager of the engineering and compliance division of the Air Pollution Control District.

The truck alternative

It would take an average of 819 tanker truck deliveries a week to the Nipomo refinery to match the supply that could have been delivered every week by three 80-car trains, each carrying 2.2 million gallons of crude, according to data available in an environmental impact report prepared for the rail project that the supervisors rejected.

That’s an average of 117 trucks a day driving in and out of the facility, placing 1,638 truck trips on the road a week between the unloading station and oil fields. (The environmental report was produced before Phillips 66 downsized its proposal from five trains to three trains per week. The numbers provided here take that reduction into account.)

That average of 117 trucks per day is more than double the number now allowed by the county. To increase the truck trips, Phillips 66 would be required to apply for a new land-use permit from the county. The refinery also would need to add more on-site unloading stations, which also would require separate permits from the Air Pollution Control District.

Alternatively, Phillips 66 could increase supply with more truck deliveries to its Santa Maria Pump Station about 17 miles south of the refinery, in Santa Barbara County. The pump station currently delivers oil to the refinery by pipe and is permitted to receive about 136 trucks, or more than 1 million gallons of oil a day.

Monica Vaughan: 805-781-7930, @MonicaLVaughan

Residents held a rally in Mitchell Park in downtown San Luis Obispo and then marched to the train station to show their opposition to a proposal by Phillips 66 to build a rail spur to allow crude oil deliveries by rail to its Nipomo Mesa refinery.

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