State Lands Commission Agrees Rancho LPG Poses Threat but Sees No Option to Act
By Paul Rosenberg, Senior Editor
The dangers posed by San Pedro’s Rancho LPG facility have become undeniable for statewide officials, as a result of years of grassroots activism. The repository was the main agenda item at the State Lands Commission’s quarterly meeting in San Diego on Aug. 17, taking up more than half of the almost five-hour meeting.
“I find this whole matter pretty appalling, that it has gone on for so long where community concerns have not been addressed,” State Controller Betty Yee said after public comments had concluded.
“The risks are real and the concerns are real and sincere,” SLC Executive Director Jennifer Lucchesi added.
Yet, neither the staff nor the commissioners saw much they could do.
Having looked at the commission’s powers to act, “It’s extremely limited,” Lucchesi said.
“This commission does not have jurisdiction over the facility,” Yee said. “Having said that, it is of concern to us, obviously, the potential safety risks that the community is experiencing,” she added. “We can’t just turn our backs to the communities that are affected here.”
This left Yee and fellow commissioner Lt. Gov. Gavin Newsom grappling with the question of what could be done.
“This is not an agency that’s immune to making big, tough, bold decisions,” Newsom said. “So I take responsibility in this issue, very seriously, and to the extent we can lean in and use our moral authority, if not our formal authority to effectuate some closure here…. I’m willing to lean into that.”
But what that means, in concrete terms, remains to be seen.
“We often feel that we have a sympathetic ear when we speak before you, but then nothing happens,” San Pedro Peninsula Homeowners Coalition’s Vice President Kathleen Woodfield said in her public testimony. And the result seemed to confirm her statement.
Testimony kicked off with a 17-minute powerpoint presentation by homeowner activist Janet Gunter who represented San Pedro Peninsula Homeowners United, which has played the lead role in petitioning the commission since 2014. At the very beginning, Gunter made two key points — first, she noted that SPPHU had been fighting Rancho since 1977.
“It took them three years to find out that this thing was going within 1,000 feet of their own neighborhoods, because it was issued an emergency exemption by the Nixon administration, under the false assumption that propane would become America’s energy source of the future,” Gunter said.
Second, Gunter questioned Rancho’s intrinsic legitimacy.
“The phrase is used a lot with this facility that they are grandfathered in and they are in compliance with all existing regulations. That’s not true,” Gunter said. “This facility was entered with multiple exemptions, from multiple different areas and it exists now only because of those exemptions. So, it will never be in actual compliance.”
In her later remarks, Yee appeared to echo Gunter’s argument. After calling for a risk analysis “that would be comprehensive, public, and really involve all the stakeholders,” she said, “This [facility] has been in place for decades, and because of the exemptions that were grandfathered in, there was never an opportunity to have that happen. And to say, now that we have regulatory agencies coming in and there are no serious violations, what are we measuring that against?”
The claim of “no serious violations” was one of two key arguments advanced by Ron Conrow, Western district manager for Plains All American, which owns Rancho. “They keep saying things that they can’t validate,” Conrow said of Gunter and other Rancho critics. “Since 2010, the Rancho LPG facility has been inspected and audited approximately 71 times by city, state and federal regulatory agencies, with outstanding results.”
Somehow Conrow had overlooked the $265,000 Environmental Protection Agency fine for risk management violations in 2014, which Rancho itself agreed to in a secret negotiated settlement from which the public was excluded.
Peter Rosenwald, the only Rancho critic speaking after Conrow, highlighted that fine. “How can this be, if they claim that they’ve always been in compliance?” he asked.
Conrow’s second main argument was that critics were wrong to question Rancho’s claim of a half-mile consequence [blast] radius, “based on EPA’s regulatory formula.”
However, retired oil industry safety consultant Connie Rutter explained in her earlier testimony why this argument was specious. The EPA’s initial requirement was to assume 10 percent of the gas would be involved in the “worst case scenario” for a risk management plan. “Assuming 10 percent gives you three miles, so that the original calculation should’ve been three miles,” Rutter said. But the American Petroleum Institute pressured the EPA to account for only 10 minutes of gas release, which is where the half-mile figure comes from.
“Then the EPA made it worse by saying LPG facilities could use a 10 percent figure, they could use a 10 minute figure, they could use a computer analysis, and so therefore whatever the LPG facility submitted, was not approved by the EPA, but was just accepted,” Rutter said. “So essentially the EPA shot down their own rule, as far as effectiveness is concerned.”
Afterwards, Rutter told Random Lengths, “The regulations then contradicted the purpose of the law, because the community did not know the true threat, since three facilities that were the same could come out with vastly different risks of a ‘worst case.’ But they were never called on it.”
Both commission staff and the commissioners seemed to see through the bogus nature of Rancho’s arguments. They showed little doubt that the risks were real and inadequately analyzed, much less planned for or ensured against. But they were stymied on what to do about it, despite comments from attorneys Anthony Padgett, Noel Weiss and Pat Nave, who proposed several possible courses of action they claimed were available to SLC.
There was also a call from County Supervisor Janice Hahn, via her representative Jayme Wilson, asking SLC to “require extensive new environmental, seismic, and risk analysis studies.”
Jesse Marquez, executive director of the Coalition for a Safe Environment, prefaced his organization’s comments about their public safety concerns and recommended actions by sharing something about his own personal experience of the kinds of risks that Rancho posses.
“In Wilmington I grew up on Lomita Blvd., and when I was 16 years old, the Fletcher oil refinery, that was located in the City of Carson, blew up,” Marquez said. “Several of the jet fuel tanks blew up at that time, all seven members of my family were burned, from first to third degree burns, over 200 people were burned or injured as a result of that. So I know the reality, and how frightening something like that can be.”
In addition to these and others who have been involved in fighting Rancho recently, were new voices added as well, giving the arguments even greater heft.
One was actually an old voice — Robert West, SPPHU’s president in 1977, when the homeowners’ fight against the threat of Rancho (then Petrolane) first began as a result of an Los Angeles Times investigation by Larry Prior. This investigation first exposed how the facility was built without proper oversight — most notably, without a city building permit or environmental impact report (one was completed just as it was finished) — so that public input was non-existent. “I was homeowner’s president at the time, but I got involved with Vincent Thomas, who was the area assemblyman,” West recalled. He and his wife flew up to Sacramento at Thomas’s request, trying to get legislative help. “I learned in my opinion, who runs the government and the lobbyists came out of the woodwork like flies …. I learned the big lessons about how government operates, and I’m sorry to say this but they let us down,” West said. Forty years later, virtually nothing has changed.
Another new voice was Gayle McLaughlin the former mayor of Richmond, whose recent experience is chillingly relevant to San Pedro.
“Rancho LPG stores 25 million gallons of very explosive and flammable propane and butane gases and there’s no way possible to make these tanks safe,” McLaughlin said. “I speak from some experience. I was serving as mayor of Richmond, Calif. when in August 2012, the local Chevron refinery exploded, and burned for many hours, sending 15,000 people to local hospitals; 19 Chevron refinery workers barely escaped with their lives.
“Years before the fire, Chevron ignored safety demands from the people in city government of Richmond. They gave the same type of empty reassurances that the good people of San Pedro continue to receive from Rancho LPG — ‘It’s all fine and safe.’ Well, after the refinery explosion, Chevron pleaded no contest to criminal neglect and was mandated to initiate repairs for $25 million, mostly to replace corroded pipes they had refused to fix until now.”
The moral was obvious, she continued.
“It’s all too clear that corporations put profits before people, and companies like Chevron and Rancho LPG gamble with the safety and wellbeing of the community,” McLaughlin said. “Furthermore, too often our regulatory agencies have allowed and enabled these companies to do this gambling at our expense. The fact that other agencies have acted irresponsibly and granted permits to Rancho, and are allowing this disaster in the making does not relieve you, Lt. Gov. Newsom and members of the commission, of your responsibility to protect the lives of the people of California. Use the powers bestowed on you by the state of California to protect the people of California.”
The fact that the commission sees little it can do merely perpetuates the problem. And local activists are feeling deeply frustrated once again. Yet, compared to just a few years ago, they have managed to get a broad segment of public officials to realize there is a problem.
The larger problem is not just Rancho itself, but that — as McLaughlin highlighted — the entire regulatory framework is broken. If the commission really cannot do anything through existing formal channels, it can seek to use its moral leadership — as Newsom suggested — not just to push the Port of Los Angeles to do an adequate risk assessment of Rancho LPG, but to fix the whole regulatory process that allows such ticking timebombs to exist.
The prospect of fixing the EPA’s brokenness is clearly out of reach for the time being. But a state-level reform effort would make a great deal of sense, especially with a race for governor (Newsom is a candidate) and other statewide races coming up next year. A draft proposal could be circulated to all candidates, seeking to get their commitments, much the same way that the PCAC proposal was put to Los Angeles mayoral candidates in 2000/1. The combination of developing climate goals (zero emissions targets, etc), increasingly evident costs (pipeline leaks, explosions, etc) and emerging new challenges (sea level rise, a subject also considered by the commission at the August meeting) creates a favorable climate for arguing that a complete regulatory overhaul is needed.
Long-range planning with the intention of guiding the state to a safe, sustainable future is fundamentally different from piecemeal planning against a background of taking existing property rights and relations for granted as immutable facts that take precedent over all else. The difference is between future-oriented public interest planning and backward-looking private interest non-planning. The latter — which we have now — clearly is not working.
Obviously, San Pedro activists alone cannot accomplish this. And, quite frankly, many are exhausted. But they’ve raised the issues involved to a level of state-wide visibility that could credibly lay the foundation for a wider coalition of groups to take up the challenge.
It might seem like a pipe dream, but it’s worth recalling Gunter’s role as one of three initial plaintiffs who fought against the Port of Los Angeles when it tried to build the China Shipping terminal without an EIR. That fight went from being a wild-eyed pipe-dream to producing massive, systemic improvements in how EIRs are completed, and ushering in the current era in which POLA and Port of Long Beach constantly tout themselves as America’s leading green ports. Perhaps lightning can strike twice in the Harbor Area.