When Valero announced in April that its Benicia refinery could close, it became the second oil company in Contra Costa in the last five years to declare a major production slowdown, after Marathon abruptly ceased operations at its Martinez facility in 2020. Valero told state regulators that within the next year, it will “idle, restructure, or cease refining operations” at its 145,000-barrel-a-day facility, which contributes nearly 9% of the state’s total crude oil processing.
The move was just the latest dip in a 40-year decline for the oil industry in California. In the industry’s mid-1980s heyday, California had more than 40 refineries producing nearly 400,000 barrels per month. Today, the state has 14 refineries producing a little over 100,000 barrels, according to the U.S. Energy Information Administration.
Local economists studying these changes say this shift has the potential to cause “upheaval” in regional economies that have long relied on fossil-fuel industries, such as in Contra Costa County where the first refinery opened in Rodeo in 1896, six years before Standard Oil set up shop in Richmond.
“This is really a cascade that we’re starting to see across the state,” Jessie Hammerling, co-director of the green economy program at the UC Berkeley Labor Center, told Richmondside. Less demand for oil, rising popularity of electric vehicles, and adoption of stronger environmental regulations and policies in California are all helping to drive the change, she said. “There’s a lot of reasons why they’re shutting down.”
Chevron spokespeople say the oil giant has no plans to leave Richmond, and the company released a report published by Oxford Economics on May 20 touting the importance of the refinery as an economic engine and critical supplier of fuel, jobs and tax revenue for the region. According to the report, the Chevron Richmond refinery produces roughly 60% of the jet fuel used at Bay Area airports and 20% of the gasoline used by vehicles in the region. The study calculated its revenue contributions to be roughly 5% of West Contra Costa County’s total Gross Domestic Product in 2022.
“We’re looking to invest in our facility. We’re looking to be a part of California and in this community for a long time,” Brian Hubinger, corporate affairs manager at Chevron Richmond, recently told Richmondside. “The world’s going to need all forms of energy, including the ones we currently make today.”
“This is really a cascade we’re seeing across the state.”
Jesse Hammerling, UC Berkeley Labor Center
But mounting evidence suggests that the recent refinery closures in Contra Costa County won’t be the last. And in Richmond, city leaders are actively exploring options for an economic transition in the event that Chevron, Richmond’s largest employer and taxpayer, should decide to close or scale back operations.
It’s a scenario that a range of other groups, including some unlikely allies, are also planning for.
After Marathon closure, workers and activists found commonality
Demand for gasoline and other fuels reached all-time lows during the pandemic, shortly after shelter-in-place orders were first issued in early 2020. That August, Marathon announced it would be indefinitely idling its Martinez refinery and another in Gallup, New Mexico. Unlike a complete closure, “idling” involves keeping a refinery running at a bare minimum, but not producing at its usual scale.
After the announcement, some 700 refinery workers in Martinez, half of whom were members of the United Steelworkers Local 5, were given 60-day notices. The union has since had a tough time helping its workers find new jobs, according to USW 5 President Nick Plurkowski.
“Those 350 people leaving Marathon in Martinez did not get picked up by the other refineries in the area,” Plurkowski said. “For a mass layoff, there’s only so much that other similar industries can do to kind of grab people. It just has not been very successful.”
“This was really a shocking event for the workers and for the folks in the community,” Hammerling said. “They really didn’t see it coming, and it was incredibly disruptive in people’s lives.”
Unlike many of the food-service and hospitality jobs that were lost during the pandemic, the Martinez refinery jobs were some of the highest paying in the county not requiring a four-year college degree, averaging around $50 an hour with benefits.
Meanwhile, environmental justice groups such as the Asian Pacific Environmental Network (APEN) saw the refinery closure as a positive since it would reduce local pollution and improve the health of the surrounding communities, even if indefinite idling means Marathon could sidestep the expensive environmental cleanups that would likely be required by state regulators in the event of a total shutdown.
“The steel workers want to keep their jobs as long as possible and they know that they’re getting a paycheck for the health and safety trade offs they make,” said Christine Cordero, a staff member at APEN. “On the other hand, our residents — who’ve been living with [pollution] for decades and having illnesses and children with asthma and lung diseases and some of our elders dying prematurely — we wish it were already closed.”
Despite having aims that are often naturally opposed, refinery workers and local environmentalists had found common cause before: Union leaders and APEN successfully advocated together for stronger safety regulations following the 2012 Chevron Richmond refinery fire, after which 15,000 people sought treatment at local emergency rooms.
“These groups clearly have different perspectives and interests and a history of engagement around refinery issues, but they also have a surprising amount of common ground,” Hammerling said. “The air that people in the community breathe is also the air that workers breathe, so potential safety risks at the refineries affect both workers and the surrounding community.”
In the months following the Martinez refinery closure, local labor and environmental justice leaders found themselves at the same table again. But this time it was to address an even larger existential question: With the world becoming increasingly less dependent on fossil fuels, what’s going to happen to Contra Costa County communities when more refineries close?
Their talks led to the formation of the Contra Costa Refinery Transition Partnership, a coalition whose core members include the United Steelworkers, APEN, Steamfitters Local 342 and the Contra Costa Labor Council. The UC Berkeley Labor Center, AFL-CIO California Federation of Labor Unions, and Blue Green Alliance Foundation have supported the coalition.
In their meetings, Cordero said coalition members have spoken “very frankly” about the “natural tensions that arise from our different interests.”
Hammerling of the Labor Center said what really brought environmental justice groups like APEN and the BlueGreen Alliance into the same room with labor unions was their shared need for more and better information about the present and future impacts of refinery closures in the county, and a desire to help shape the policy conversation so local workers and community members most impacted by industrial pollution would be prioritized.
“They wanted to say, ‘Hey, let’s understand this together,’” Hammerling said. “And in doing so, have some conversations among ourselves about what kind of transition would truly constitute a ‘just transition’ for refinery workers and for people who live near the refineries.”
Refinery workers face an uncertain future
In January, the coalition published a 120-page report authored by the Labor Center, forecasting the impacts of refinery closures in Contra Costa County and laying out policy recommendations for a just transition. The study identifies three core challenges that Contra Costa County will face if more refineries close: loss of tax revenue for essential services; fewer well-paying jobs without comparable replacements; and continued hazards to public health, including those posed to nearby residents without extensive cleanup of the land that refineries currently occupy.
Even after the recent closures, oil refining remains one of Contra Costa County’s largest industries, directly accounting for roughly 3,000 jobs and another 15,000 indirectly connected to the oil industry, according to the coalition’s report. And when these jobs disappear, they aren’t easily replaced.
“The regional economy currently generates only a very limited number of jobs that match refinery workers’ skills and also provide similar pay, benefits and working conditions,” the report found. A year after Marathon closed, more than a quarter of its former employees were still unemployed and those who did find jobs were earning about 25% less than they did at the refinery, according to the authors.
“How do the county and the local cities pursue an approach that actually talks about how interconnected quality jobs, health, communities and economic resilience are?”
Christine Cordero, APEN
Since the coalition started formally meeting several years ago, Marathon has begun producing fuels again, but instead of refining crude oil into gasoline and jet fuel, it now produces biofuels as Martinez Renewables. Plurkowski said that type of refining is cleaner for the environment, but it’s just as dangerous for the workers and doesn’t employ as many people.
“When you switch to a renewable refinery, it’s not the same amount of jobs,” he said. “The job market is shrinking. Now we’re in this thing where the refineries are not sure how long they’re going to be here. And that’s probably the scariest part.”
Besides job insecurity, labor leaders such as Plurkowski are concerned about companies delaying or cutting corners when repairing their refineries’ infrastructure, which could put workers’ lives in danger. Those dangerous scenarios become public health concerns when they result in flaring or even larger-scale fires, like the 2012 Chevron fire or more recent fires this year at PBF in Martinez on Feb. 1 or Valero in Benicia on May 5.
“Local 5 has seen catastrophe after catastrophe, and we’re pushing for more safety at all the refineries, whether it’s renewable or not,” Plurkowski said.
It’s a goal that environmental justice groups like APEN can easily get behind: Stronger safety measures mean fewer industrial accidents, which equates to fewer toxic chemicals being adversely released into the air and a cleaner environment for the surrounding community.
As a result, Cordero said much of the Contra Costa Refinery Transition Partnership’s work has been focused on connecting the dots between policy issues that are often mistakenly seen as unrelated.
“How do the county and the local cities pursue an approach that actually talks about how interconnected quality jobs, health, communities and economic resilience are?” Cordero said. “The way we plan right now, we keep those things separate. The way we do things is incredibly piecemeal.”
As an organization, she said APEN is interested in looking at “not just the quantity of jobs, but the quality of jobs, who gets them, and if the actual economy meets the health and needs of Richmond residents.”
Plurkowski agrees that the environmental and labor aspects of any future transition will be equally important.
“When they do shut down, whenever that is, we do want a safety net for the workers getting laid off,” Plurkowski said, “and we want the communities to be involved in oversight of shutting down the plants and and helping steer the cleanup in the right direction, making sure the cleanup is acceptable.”
One other thing the partners agree on: No former refinery town has gotten it right. They’re hoping Richmond will be the first to do so when its time eventually comes.
While there have been some small victories since Marathon announced in 2020 that it would idle, namely a state-funded pilot program to support displaced oil and gas workers, Hammerling said such efforts are “a far cry from the kind of comprehensive transition planning and oversight process” that will be needed in the county to support workers and safeguard community members from environmental hazards in the event of future refinery closures.
“I don’t think it’s particularly clear exactly what is happening and when,” she said. “But I will say, we do not have the plans in place to ensure a just transition as these refineries shut down.”
What’s fueling Richmond’s air pollution?
This article is part of a series investigating the causes, impacts, and possible solutions to local air pollution. See the full series.
