Valero Applies to Build 'Crude by Rail Project'; Up to 70K Barrels Would Come to Benicia by Train, Daily

Valero currently gets its crude oil shipped into Benicia via pipelines and boats, but that could soon change.

The company has applied to build a set of tracks that would ship oil into the refinery by way of railcar as well. The tracks would extend from Union Pacific rails into the refinery to be unloaded. Construction would begin in mid-2013 and Valero would begin using the rail-offloading facility in 2014.

Click image for 27-page application (PDF) >>

Benicia’s Community Development Director Charlie Knox told us today that he’s under the impression that the oil brought in via train would come from North Dakota, but others have speculated the oil would come form Canada. It's possible North Dakota is just a stop along the way, Knox said. 

According to The Motley Fool, getting pipelines approved is a long and challenging process, so companies are focusing on rail, “because the speed to bring rail operations online using existing lines is much faster than building new pipeline networks.” They report that Valero plans to buy 1,000 rail cars and use them to “move oil sands away from Alberta,” Canada.

Canadian tar sand oil is cheaper than Alaskan crude, which could be one reason for the railcars if the oil is indeed coming in from Canada.

The Valero construction would consist of a rail offloading rack, pump, piping, and crude storage tank – all of which would be permanent structures.

These additions would not increase the amount of oil that comes through the Valero refinery, according to the application. The purpose, they say, is to diversify the sources used to ship crude oil in. Currently, everything comes in via pipeline and boat. 

Below, we'll walk you through some of the details of the application. (Read the full PDF above). Note: The Y connector in green on figure 1 of the PDF has been removed from the project by Valero, according to Knox. It's no longer a part of the project. 

Share your thoughts in the comments below.

Why does Valero want to build this? 

The purpose of this project is to allow Valero to receive a larger proportion of its crude oil by railcar, up to 70,000 barrels per day of North American crude. The project would not increase the refinery’s total crude oil throughput or result in an increase in the production of existing products or byproducts because the increase in crude oil deliveries by railcar would be offset by a corresponding decrease in crude oil deliveries by marine vessels. No modifications would be made to refinery process equipment and there would be no net increase in operational emissions.

How would this affect traffic? 

The vehicle traffic associated with the project would be one or two additional locomotive trips per day with 100 or 50 railcars, respectively. The locomotive trips are scheduled for around noon each day, but this could change for the project as potentially required for mitigation of local traffic impacts. (Note: This has changed. Knox said they will only be used from around midnight to 5 a.m., so as not to clock up the rail yard).

When would it be built and what would be the effects?

Construction of the new rail spurs and runaround track would involve some dust generation and noise and odors associated with minor amounts of heavy construction equipment, but this would be temporary. The project involves bringing in more crude via rail, but also decreases the amount of crude brought in by ship. There would be no net increase in hazardous materials involved with this project, but the location would be different, i.e. at the rail unloading rack versus the dock.

Valero says this will not result in an increase in emissions (since more train shipments will result in fewer boat shipments), but they say they will document any changes and seek approval from the Bay Area Air Quality Management District.

We’ll follow up on this story as we learn more and as we chat with Valero. For now, feel free to click through their application and share your thoughts below.