More Racially Biased Energy Costs Favored By BAAQMD – OpEd

Even though Californians are the most environmentally regulated population on the planet, the Bay Area Air Quality Management District (BAAQMD is proposing a new Rule 6-5 to further reduce particulate emissions from some of the cleanest refineries in the world. 

The Agency’s planned emissions controls would ultimately serve only to reduce supplies and raise energy costs even higher for everyone in the region: residents, businesses, and government entities. The BAAQMD actions would hit the poor and those on fixed incomes the hardest, creating a disparate impact in terms of equity, racially biasing more energy costs upon those that can least afford it, while the climate and weather would remain the same.

The Bay Area is home to 44 percent of California’s refining capacity. BAAQMD Rule 6-5, if approved, is expected to force the shutdown, or financially cripple the PBF Martinez and Chevron Richmond refineries in Northern California, as well as the closure of the many businesses in the surrounding counties of Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma that support those major refineries.

California refineries are the world’s cleanest and most monitored because they operate in the most environmentally-regulated location on earth – the State of California. Hopefully the BAAQMD is cognizant that oil and gas are not just an American industry with its 131 operating refineries in the U.S. as of January 2020 per the Energy Information Administration (EIA), but an international industry with about 700 refineries worldwide that service the demands of 8 billion people. 

To date, other American refineries have ceased making conventional hydrocarbon-based motor fuels by shutting down or converting to making renewable diesel, bringing the total closer to 125 operating refineries in the U.S.

The effect of shuttering the supply from California refineries is that the state’s demand for energy would need to be met by imports from foreign suppliers located halfway around the world with significantly less stringent environmental, workplace safety, and human rights controls than California, resulting in increased global emissions, and increased energy costs for Californians. Whether crude or products are imported, Californians pay an environmental penalty due to lax regulations in other countries.  

Over the years, we have all seen the impact on California fuel prices when one of the few remaining refinery manufacturers temporarily shuts down for maintenance, or what the industry refers to as a “turnaround.” Gas prices historically spike during these temporary outages. Today, we are seeing prices rise directly because of the permanent closure of the Marathon Martinez Refinery, which cited regulatory costs as a factor in their decision, with fuel prices now at record highs in the Bay Area versus Los Angeles, 

Crippling the PBF Martinez and Chevron Richmond refineries will cut off Northern California’s reliable local supply of fuels to meet the demands of gasoline, diesel, and jet fuel for the military, airports, ports, delivery fleets, and other critical infrastructure. 

If BAAQMD Rule 6-5 is implemented and local refineries shut down, the state will have to rely on imports from China, the world’s largest polluter, as well as other unreliable foreign countries for the supply of energy to meet the demands of our mobile lifestyles. This will increase worldwide emissions and further hike transportation costs for all 40 million residents of the State.

If importing fuels and the oil derivatives that are the basis for more than 6,000 products in our daily lives and economy was more cost-effective, commercially viable, and reasonably affordable than manufacturing them here, a viable system would already be in place. 

Californians already pay the highest cost for fuels in the country, with more than $1.10 per gallon supporting environmental programs. In terms of equity, the wealthy and middle class have more tolerance for expensive energy, while people at lower income levels are struggling to pay their bills.  

Exorbitant energy costs are making California’s economic recovery from the pandemic even more challenging for the 18 million (45 percent of the 40 million Californians) that represent the Hispanic and African American populations of the state. Having the BAAQMD enforce an egregious Rule 6-5 would make energy supplies more expensive on those less fortunate of our neighbors and worsen poverty in the state with the highest homeless population in the country.

The median income for Latino households in 2016 was $56,200, $55,200 for African American households, and $96,400 for white households. According to several studies, as many as 40 percent of all Californians cannot regularly meet basic monthly expenses.

In 2019, 57 percent of Black families and 50 percent of Latino families with children were poor in terms of net worth, lacking enough financial resources to sustain their families for three months at a poverty level, as documented in new research from Duke University.

Fuel costs are regressive expenses on low- and middle-income consumers, meaning it takes up a lot bigger chunk of the budget of a lower middle-class family than it does an upper middle-class one. Racially biasing more expensive fuels onto the less fortunate that will worsen poverty, remains a bigger challenge than minor environmental issues.

Famed humorist Mark Twain said, “Everybody talks about the weather, but nobody does anything about it.” In California, everyone talks about the high cost of living, the high costs of electricity and fuels, and over-regulation, but nobody does anything about it. Well, it is time to stop the BAAQMD nonsense!

Consider: the BAAQMD’s actions would impose more unprecedented costs on California’s economy, as well as American’s national security, competitiveness, and quality of life. California’s dependency on foreign suppliers has increased imported crude oil from foreign countries from 5 percent in 1992 to 58 percent today.

Imported crude oil costs California more than $60 million dollars a day, yes, every day, being paid to oil-rich foreign countries, depriving Californians of jobs, careers, and business opportunities. Those countries have lower environmental standards than California and they can deliver products to wholesalers in whatever state or country is willing to pay the highest price. 

Chevron Richmond, PBF Martinez, and Valero Benicia are local refineries manufacturing jet fuel to supply military bases, major airports in San Francisco, Oakland, San Jose, and Sacramento. All would be impacted by Rule 6-5. A reduction in the supply from one or all of these refineries will contribute to national security concerns because we would be growing ever more dependent on unreliable foreign manufacturers, above all China, to meet the demands of the military and commercial transportation needs in Northern California.
The future looks very bleak for ALL 40 million Californians as the economy starts to recover back to near-normal fuel demands for the 5th largest economy in the world. The near-normal daily energy demands for California’s 145 airports (inclusive of 33 military, 10 majors, and more than 100 general aviation) was 13 million gallons of aviation fuels, or one-fifth of the nation’s jet fuel and aviation fuel consumption.

Today, Bay Area refineries are among the cleanest, most environmentally friendly in the world and some of the most responsible employers. The BAAQMD Rule 6-5, if implemented, will shift control of the West Coast’s aviation fuel demand for the military, the International Airports at San Francisco, Oakland, San Jose, and Sacramento airports, as well as the cruise ships, Coast Guard, and merchant ships servicing West Coast ports.  

The proposed version of BAAQMD Rule 6-5 will barely reduce particulate emission reductions while raising the nation’s highest energy prices even higher, showing racial bias by impacting lower income African American and Hispanic residents the most.

Implementation of Rule 6-5 would reduce supplies of products Californians rely on that support their standard of living, increase worldwide emissions that get transported to California on the daily breeze, and putting America’s national security in jeopardy without changing, much less improving, the weather or air quality, which already meets federal standards. When will this madness stop?