Representatives from Healthy Martinez, a watchdog group in a nearby Bay Area city home to PBF Energy’s Martinez Refining Company, say they are exploring their own tax initiative.
“All of these refinery communities should be considering this kind of effort,” said Healthy Martinez member Heidi Taylor.
On a gusty August evening in the summer of 2012, a massive blaze broke out at the Chevron refinery that since 1902 had sat on the flatlands near a wide point jutting out into the San Francisco Bay.
Through sustained electoral and community pressure, the groups ultimately helped extract a $90 million community benefits agreement in exchange for the city council approving it in July 2014.
In the spring of 2024, the groups delivered a proposed initiative to Richmond City Council, whose seven members were all generally supportive, according to current Councilmember McLaughlin.
The negotiations were up against a hard deadline: Aug. 14, the final date for a ballot initiative to be removed from the fall ballot.
A campaign film shoot was scheduled for the day after the city council meeting.
“Our campaign didn’t approach the city just so Chevron could cut a deal that is pennies to them,” Guerin said.
McLaughlin said she held meetings last week with a group that aims to use a similar ballot initiative to tax Chevron’s refinery in El Segundo.
“The Richmond refinery is a unique asset and the Bay Area is a unique community and political environment,” said Allen.
After agreeing to a deal that will significantly improve the city’s medium-term financial outlook and raise the annual general fund by roughly 25% over ten years, Mayor Eduardo Martinez declared, “The community of Richmond has created a movement that will echo across the nation.”. “Other communities may also use ballot measures or negotiations to compel polluters to behave morally. “.
Certain plans have already been implemented in the weeks following the settlement’s ratification. PBF Energy’s Martinez Refining Company is located in a nearby Bay Area city, and representatives of Healthy Martinez, a watchdog group in that city, say they are looking into launching their own tax initiative. At least two other California cities with significant refineries have contacted the organizers of Richmond’s measure, according to those involved in its inception.
In California, business groups and well-funded activists often use state-wide initiatives as leverage to force discussions with elected officials. Restaurant companies and unions agreed to a $20 per hour wage last year after a referendum regarding a $22 minimum wage for fast-food workers was threatened. This summer, twelve bills that addressed everything from personal finance education to pandemic preparedness were removed from the state ballot in an effort to placate their supporters with compromise legislation.
According to Chevron representatives, the Richmond agreement is just the most recent “historical wrinkle” in a series of tax arrangements with the city and does not establish any new guidelines.
However, activists question if the strategy of making environmentally harmful businesses justify their operations in front of voters can be implemented throughout the state, or even the nation, given how quickly the company gave in to political pressure.
Heidi Taylor, a member of Healthy Martinez, stated, “All of these refinery communities should be considering this kind of effort.”.
a battle of fire.
It all began with a fire.
In August of 2012, a massive fire broke out at the Chevron refinery, which had been located on flatlands near a wide point jutting into San Francisco Bay since 1902. The fire started on a windy September evening.
Thick black smoke billowed up from Richmond like a rogue beast freed from its chains, stretching southward across the bay toward Oakland and Berkeley. Early in the day, emergency sirens could be heard. The commuter trains ceased to operate. Residents were advised to stay indoors by the county health department.
The damage was done, but by late evening, the flames had been contained. 15,000 people sought care for respiratory issues related to the fire at nearby hospitals in the days and months that followed. A year later, Chevron admitted guilt to criminal charges for failing to repair defective equipment and agreed to pay $2 million in fines.
Although there had previously been two fires at the refinery, one in 1989 that left eight people injured and another in 1999 that completely destroyed the already shaky relationship between the city and Chevron, the 2012 fire was particularly damaging.
A billion-dollar expansion project was already in progress at Chevron. Citing deficiencies in Chevron’s environmental impact report, Asian Pacific Environmental Network and Communities for a Better Environment, two environmental justice organizations, successfully contested the project in court. Following their successful battle with the company, activists who had spent ten years organizing locals against the biggest employer in the city discovered that many more were simply tired of the company’s presence.
In 2011, Megan Zapanta joined APEN to work with communities residing next to polluting industries. “For organizers now that they are adults, that was an awakening moment for them,” she said. We got to discussing ways to make Chevron answerable. “.
Thousands of people marched from the Richmond metro station to the refinery’s gates a year after the fire to draw attention to the facility’s safety record.
In August 2013, the city filed a lawsuit against Chevron for “a continuation of years of neglect, lax oversight and corporate indifference to necessary safety inspection and repairs,” following a history of supporting the company and the thousands of jobs it represented. (Chevron paid the city $5 million in a settlement in 2018 without taking responsibility for the fire. ).
When Chevron ran advertisements all over the city, claiming that the update was just a “modernization” required to ensure safety following the 2012 fire, activists retaliated. The groups eventually succeeded in obtaining a $90 million community benefits agreement in exchange for the city council approving it in July 2014 through persistent electoral and community pressure.
A chance to intensify the dispute was perceived by both parties. To address the effects of refineries on locals’ health, Communities for a Better Environment organized neighborhood gatherings. APEN provided leadership development with the goal of enabling individuals to speak up for their community. Former Mayor Gayle McLaughlin claimed that corporate influence had put the city council “under Chevron’s thumb,” but the Richmond Progressive Alliance helped win elections and move the council away from this influence. “.
“Is there anything that we could do in Richmond to inspire our local bases?” asked Zapanta of APEN. Not only a defensive thing. Our entire effort was focused on this. “.
During that ten years, growing awareness of the effects of climate change and the shifting dynamics of oil economics saw a significant shift in what it meant to hold refineries accountable. California announced aggressive timelines in 2020 to phase out the refining of fossil fuels. Refineries in the area switched to biofuel. The activists started planning for the day when the refinery would close and relocate.
In the same year, the Richmond City Council proposed a tax on gross receipts of businesses, based on one that had been approved three years earlier in Carson, a city near Los Angeles that houses a Marathon Petroleum refinery, in an attempt to increase the percentage that Chevron paid to the city. Any special tax must be approved by voters according to California law, and Measure U was approved by Richmond voters by a 50-point margin following a campaign heavily influenced by service unions.
However, the $9 million in income the new tax brought in did not sit well with environmental justice organizations. A bigger fund was what activists envisioned would help rebuild Richmond, repairing roads, creating parks, and attracting new companies and job training programs.
The groups’ attorneys came up with the idea of taxing Chevron for each barrel it refined in Richmond over the following 50 years while looking for ways to raise money beyond the city’s standard business tax and license fees. Based on the city’s estimates, the tax could generate up to $90 million in revenue per year.
“It was a matter of identifying the resources at our disposal,” Communities for a Better Environment attorney Kerry Guerin stated. “We started to realize that the city could create new revenue streams by putting a general tax on the ballot. “.
In order to get the kind of large turnout that progressives typically believe advances their causes, Zapanta and other activists planned to time the necessary initiative for the general election of 2024. Despite the possibility of giving politicians with their own agendas control over the measure’s wording, they decided to use the newly amicable city council to get there rather than qualifying the initiative through signature gathering.
Communities for a Better Environment attorneys wrote the proposal, and organizers of the Asian Pacific Environmental Network worked on developing a campaign and fund-raising plan. The tax advocates tried to operate covertly to keep Chevron from learning of their intentions, postponing any public report on the proposal until they were prepared for a campaign, even though they had been in active communication with members of the city council.
The groups presented a proposed initiative to Richmond City Council in the spring of 2024, and according to current Councilmember McLaughlin, all seven members were generally in favor of it. The tax will be on the November ballot, the council decided in a unanimous vote in May. As part of a larger plan to permanently move Richmond, a smokestack city in the early stages of gentrification, away from its industrial past, elected officials presented the tax to their constituents.
Chevron seemed determined to intensify the battle. A corporate worker and the recently established Coalition for Richmond’s Future filed a lawsuit against the city for creating what they described as a “misleading” and “aspirational” ballot measure. A representative for the business claimed that if the tax was passed, Chevron would have to relocate and charged that city leaders were “playing chicken with the region’s economic destiny.”. The business soon made plans to relocate its headquarters from the neighboring San Ramon to Texas, seemingly weighing the threat.
Chevron adopted a friendlier stance behind closed doors. Early in August, company representatives engaged in what a spokesperson subsequently called a “open dialogue” in secret negotiations with the mayor, the city attorney, and an ad hoc committee. According to a presentation made by the city, the company made an initial offer of $300 million, and the city responded with a higher sum. A firm deadline of August 1st faced the negotiations. 14, the cutoff date for removing a ballot initiative from the autumn ballot.
To announce a compromise that had the support of every member, the council called a special meeting for that day. In exchange for $550 million spread over ten years—during which members said would provide roughly as much money as the tax would have—officials would give up their pursuit of a refinery tax.
Members hailed the settlement as a “bird in hand” because they were afraid of the legal limbo that would follow the initiative’s passage, as was the case in Carson, which was forced to escrow the majority of its tax revenue while it awaited the outcome of lawsuits. “.
A representative for the company, Ross Allen, stated, “I don’t think anyone actually won through this process, so it’s not necessarily a win-win.”. However, I do believe that it’s something that both parties can likely accept. “.
Zapanta and other campaign members claim that although initiative backers were aware that council members were looking for a settlement, they were taken aback by the announcement’s timing. In addition to setting up a volunteer program for door knocking, they had hired a canvassing team to make calls to voters. The day following the city council meeting was designated for a campaign film shoot.
Politicians were letting Chevron buy its way out of a tax that it saw as an existential threat, according to those who had been pursuing the company for ten years. According to Guerin, “Our campaign didn’t approach the city just so Chevron could cut a deal that is pennies to them.”.
upon the levy’s failure.
Other communities are approaching the activists who forced Chevron to admit their mistakes, but they are left feeling conflicted about the settlement.
The policy staff of Local Progress, a national organization made up of progressive local elected officials, is in talks with other cities about introducing the per-barrel tax. McLaughlin reported that she met last week with a group that intends to tax Chevron’s El Segundo refinery through a similar ballot initiative. With targeted taxes, more communities will probably follow suit and try to target other industries that contribute to pollution, such as steel, cement, and chemical production, as well as auto manufacturers.
Zapanta remarked, “I don’t think anything is plug and play.”. However, we can’t wait to impart knowledge. “.
The environmental justice movement has reached a “maturation of organizing tactics,” according to Robb Korinke, the founder of a political consulting firm in California that specializes in local ballot-measure campaigns. He said that the actions of the Richmond activists demonstrate this. This includes moving away from global issues like climate change and toward a localized environmental strategy that is more palatable to a wider range of supporters.
Exporting Richmond’s procedure to other jurisdictions will not be easy. Cities attempting to siphon off funds from the large corporations under their control is hardly unprecedented. Ironically, however, it was precisely this California law—requiring voter approval to enact a special tax—that might have provided Richmond with a special kind of leverage over Chevron by raising the prospect of a protracted legal battle.
Not every local organizer has the authority to openly threaten a major company. The head of the board at the transportation fuel consulting company Stillwater Associates, David Hackett, asserts that there’s no assurance that other towns feel the same way Richmond does about Chevron. Additionally, a refinery with less financial resources might give up when faced with an annual tax of $50 million.
Years of planning and investigation by a grassroots group that grew strong enough to frighten Chevron contributed to the initiative’s success in Richmond. Compared to what has been constructed in Richmond, the Healthy Martinez coalition, which was established in response to a different well-publicized refinery disaster in 2022, is still in its infancy.
“The Bay Area is a unique community and political environment, and the Richmond refinery is a unique asset,” Allen remarked. “Chevron keeps up regular communication with the governments in which we own assets. The result of that discussion was the agreement, which represents our ongoing discussions with city officials. “.
From the beginning, the Richmond campaign organizers have insisted that their goals extended beyond simply imposing taxes on Chevron. They point out that their plan would have been known as Polluters Pay.
“We always wanted to create a precedent,” Zapata declared.
