Surprise Move: Plains Pulls Out of Pier 400, Energizes Anti-Rancho Activists

Roy I. Lamoreaux, director of investor relations, cited that the cost of abandoning the project made up the bulk of  “noncash impairment charges totaling $125 million,” in a conference call discussion of the report. 

 

Sources said that the Port of Los Angeles was informed just a few days before Plains went public. It's assumed that Plains scrapped its plans for lack of a partner to replace Valero, who dropped out of their original agreement, though nothing that specific was mentioned in their public discussion. 

 

The surprise announcement stirred speculation among activists trying to get the Plains-owned Rancho San Pedro LPG facility closed or relocated, but port officials have previously denied any connection between the two. Whether or not they know everything Plains has had in mind, several developments since our most recent report on the subject further erode Plains' legitimacy. 

 

First, a still poorly-understood leak occurred at the Rancho facility on Oct. 17. 

 

“We got 37 complaints, including four schools,” said Air Quality Management District spokesman Sam Atwood.  

 

Complaints came from Torrance to Wilmington, San Pedro and Rancho Palos Verdes. 

 

“Our inspectors did isolate it to Rancho holdings and issued a public nuisance violation,” he added. 

 

Atwood did not expect further details to be released until after a settlement had been reached with Rancho, as it usually happens with such violations. The uncertainty shrouding the incident is indicative of the larger problem Rancho posses, community activists claim.

 

Second, at an Oct. 16 city council meeting, Rancho Palos Verdes decided to become more actively involved, though stopping short of taking a lead role in legal or regulatory actions. Plains did not acquit itself well at this meeting, where they repeated their past pattern of presenting confused and misleading testimony. 

 

Councilwoman Susan Brooks, got a taste of Plains unnecessary obfuscation  when she asked if Rancho had insurance that would cover damage to the community—“lives, property, homes.” 

 

Rancho representative Ron Conrow replied, “it’s a cascading, it’s kinda pyramid type insurance and it’s multi-tiered.” Then he read from a prepared statement that Rancho was insured through Plains with “insurance that covers its entire asset footprint”—meaning Rancho's own property, not damage to the community. 

 

A simple “no” would have sufficed. 

 

Third, retired industry consultant Connie Rutter has gotten to the bottom of a key public safety dispute—the reason for Rancho's unrealistically optimistic claim that a worst-case explosion would only affect a half-mile radius (0.8 square miles), rather than the 3-mile radius (28 square miles) that Rutter has calculated. This vast discrepancy turns out to be the product of prolonged and intensive industry opposition to Environmental Protection Agency rule-making, which ultimately produced an industry-friendly regulatory standard—the EPA's “offset consequence analysis”—that bears no relationship to the laws of physics. 

 

Fourth, on Aug. 29, former EPA Chief Christine Todd Whitman wrote a New York Times op-ed, “The Chemical Threat to America,” addressing the broader context of regulatory failure that Rutter's research documents, calling attention to the public safety threats involved. He pointed out that, “Hundreds of chemical plants and other facilities maintain large stockpiles of dangerous substances and are in or near major American cities like New York, Los Angeles and Chicago.” 

 

Fifth, with months more of inaction, it now seems clear that Rancho's earlier announcement of a safety drill, originally supposed to take place in April, was nothing more than public relations ruse, intended to deflect public scrutiny.

 

Of all these developments, Rutter's research into the origins of the half-mile radius estimate arguably cuts the deepest, as it shows how special interest political gamesmanship on the macro level of American politics dovetails with the micro-level gamesmanship that got the deeply-flawed facility built in the first place, which Los Angeles Times reporter Larry Prior first uncovered back in 1977.

 

“It really all started with the Bhopal disaster” in 1984, Rutter told Random Lengths. 

 

Congress generally finds it easier to pass new regulatory laws by amending existing laws as they come up for refunding or re-authorization, and this process figured into this story twice, Rutter explained. First was the 1986 Superfund Amendment Reauthorization Act, via a section called the Emergency Procedures and Community Right To Know Act.

 

“The first go-round all they talked about was toxics,” Rutter said. “And their whole purpose in doing that—the community right to know—was to bring pressure on entities to bring the risk down, to reduce the risks.”

 

The second go-round came with with the 1990 re-authorization of the Clean Air Act, when flammables were covered as well, but it took six long years for the EPA to generate rules enforcing the new law—and three more years for those rules to become final.

 

“The first go-round they told them how to calculate their effect.  Then they got sued. This was the [initial] EPA regulations that came out of the Clean Air Act,” Rutter said. “They were sued by the API [American Petroleum Institute], they were also sued by some other entities. All the suits had to do with 'Don't finger us! Point some place else!'”

 

“In May of '99, the EPA came out with their final rule,” Rutter continued, “in which they had settled with the API, and essentially said—this is my description—It doesn't really matter how you calculate. 

 

You can either do the calculation which I did, which gives you three miles, which was in their [EPA's] guidance, which came out in April of '99—so this is all last-minute stuff—you can either use that guidance, or you can do air modeling. And if you do air modeling then you—if you've got an impound basin, you can calculate how much would be released within 10 minutes.'” 

 

In short, the model that Rancho is using is one that the industry as a whole was happy to accept in dropping its lawsuit. It has nothing to do with the laws of physics—particularly since LPGs vaporize quickly at normal temperatures, rapidly expanding beyond the bounds of a basin which might make sense for a stable liquid compound. “It's not very realistic,” Rutter said of such scenarios.

 

For example, in his testimony before the Rancho Palos Verdes City Council, another Rancho representative, Dan Kelly, said, “If you had a release you would have some vaporization and eventually that vapor cloud when it got to the proper concentration of air and gas and an ignition source would ignite and it would flash or blast and then you would have a fire that would go back to the impound basin or the pool [interruption] you would have a pool fire at our facility.  And it would [pause] the vapors would no longer leave the facility they would burn before they left the facility.” 

 

“For Dan to imply that the vapors won't leave the site before or after they're ignited is bogus, since, of course, they will,” Rutter said, when asked to comment. “They'll burn there of course, but they'll also burn off-site.”

 

The EPA standard has another problem, Rutter pointed out, “It's essentially unenforceable. If the EPA is not going to tell you exactly what model to use or what formula to use, then any number you tell them is OK.”

 

Things have gotten even worse, Rutter added, given how the threat of a terrorist attack has been used to try to beat back the public's right to know. At the same time that government has dragged its heels in protecting communities from that very threat, as Todd Whitman pointed out in her editorial.

 

This is why Rancho San Pedro is not “merely” a local problem, but a manifestation of failed national environmental protection law. This is why local activists hoped that our new congressional representatives—including Maxine Waters, whose district now comes close to the Ranch facility—will treat this problem with the seriousness it deserves.

 

"In the face of Katrina, in the face of San Bruno, in the face of what's happening on the East Coast [after Hurricane Sandy]... all this stuff everybody has known,” homeowner activist Janet Gunter shakes her head. “Everybody keeps turning the other way, because it's far more difficult to deal with these realities than it is to ignore them.”

 

-cw

 

 

 

 

 

 

CityWatch

Vol 10 Issue 93

Pub: Nov 20, 2012