Environmental review issued for California refinery revamp

California’s Kern County Planning & Community Development Department (KCPCDD) has issued a draft environmental impact report (EIR) for Alon USA Energy Inc.’s request to increase the flexibility of its existing 70,000-b/d Bakersfield, Calif., refinery to process cost-advantaged light crude oils sourced from North American shale regions.

Alon’s plan, officially called the Alon Bakersfield Refinery Crude Flexibility Project, proposes to expand the plant’s existing receiving and processing options for crude via construction of railroad and related systems at the site, according to the EIR.

Specifically, the EIR addresses Alon’s requests for permission to move ahead with several project components, including:

• The expansion of existing and construction of rail, transfer, and storage facilities, which includes construction of a double-rail loop from an onsite spur connection off the existing BNSF Railway.

• The addition of as many as three boilers.

• The construction of process unit upgrades and modifications, including complex upgrades to the refinery’s hydrocracking units, crude and vacuum atmospheric distillation units, and hydrotreating units.

• The repurposing of existing tankage.

• The relocation and modernization of existing liquefied propane gas truck rack and upgrades to sales rack.

The refinery’s current 70,000-b/d maximum crude processing capacity would not be increased, and no refinery process units are proposed, the EIR said.

While the expanded rail infrastructure proposed by the plan will transport light tight crude oil supplies into California produced from North Dakota’s Bakken shale region, KCPCDD said it has no final determination as to if or why Bakken crude is more volatile than other crudes given the difficulty in finding clear and verifiable information on the components and properties of streams originating from the region (OGJ Online, May 26, 2014; May 20, 2014; May 8, 2014; Feb. 26, 2014).

Refining at the Bakersfield plant has been suspended since 2009, when former owner Big West LLC-subsidiary Flying J temporarily shut down the refinery for lack of cash with which to buy oil after the company filed for reorganizational bankruptcy in late 2008 (OGJ Online, Feb. 2, 2009).

After purchasing the refinery in 2010 (OGJ Online, Feb. 17, 2010), Paramount Petroleum Corp., a subsidiary of Alon, resumed only limited processing operations at Bakersfield, according to KCPCDD.

While it has not used the Bakersfield refinery to process the heavy crude oil feedstock for which the plant was configured since the 2010 purchase, Alon did use the hydrocracker and other hydrotreating units at the site between 2011 and 2012 to process untreated vacuum gas oil produced by its nearby Paramount, Calif., refinery into lighter, finished fuel products, the company said in its yearend report for 2013.

During this year’s first quarter, neither the Bakersfield nor Paramount refineries processed oil, according to Alon’s latest 10Q filing with the US Securities and Exchange Commission.

KCPCDD will receive public comments on the draft EIR until July 7.