What Phillips 66 Intended & The Impacts

What Phillips 66 Intended for SLO County & California

Phillips’ Motivation: In 2013, Phillips 66 claimed they were running out of California crude to process, and therefore jobs at their Nipomo Mesa refinery would be at risk. This was misleading. Phillips’ corporate executives had stated in writing that they want their entire company to process lower-cost, “advantaged” crude oil in order to generate higher profits. That crude would be imported by rail from Canada and elsewhere.

They called it “taking a classic company in a new direction” ... i.e., their self-proclaimed “crude-by-rail strategy.” The issue was about higher profits by switching to rail delivery, not about protecting jobs.

Phillips’ Proposal For SLO County: For 60+ years, their refinery had received crude oil by pipeline ... not one drop by rail. Under their original proposal, Phillips for the first time would bring in 20,000 rail tankers per year, fully loaded with Canadian “tar sands” crude. Every year, 250 trains, each a mile long, would travel into the county. Then the same 250 trains would depart (500 trains in total).*

Along with the loaded tankers would come, for the first time, the construction of a rail terminal -- including a “railcar unloading facility”, a pumping station, and a new pipeline to move the crude within the refinery. This would be accompanied by trucks and other vehicles to service the facility.

The Negative Impacts Of Phillips Conducting Business In An Entirely New Way:
This represented an entirely new business model for Phillips - a dramatic transformation in the way they operated in SLO County and all of California. This was not a benign “rail spur.” The issue was the new intensity of their operations and what they intended to bring in on those rails. The impacts ...

- Shipments throughout California’s coast of highly flammable, diluted tar sands.
- Air pollution from diesel exhaust, the refining of tar sands and the resulting petroleum coke dust.
- Noise pollution from blaring whistles and track noise throughout SLO County & California.

- Light pollution from 15 to 30-foot-tall light towers surrounding the rail yard.
- Statewide visual pollution of mile-long trains laden with graffiti, each hauling 80 oil tankers.

- The potential for derailments and oil spills anywhere in SLO County & California.
- The potential for fires, explosions and toxic smoke anywhere in SLO County & California.

- The potential for severe property damage anywhere in SLO County & California.
- The potential for injuries and deaths anywhere in SLO County & California.
- The potential to damage the reputation of SLO County as a place to live, work and visit.
- The potential to slash local oil industry jobs, damaging the County’s GDP and taxes.
- And the potential to damage the economic well-being of homeowners and businesses.

Special Note: P66 claimed that local officials were preempted by Federal law from protecting their citizens regarding anything related to the mainline railroad and the contents of the tank cars. However both SLO County’s Counsel and the CA Attorney General stated that it’s the obligation of LOCAL governments to take into account all impacts - both within and outside their geographical region.

What Happened: SLO County’s Planning Commission and Supervisors rejected the project. P66 then sued SLO County, but settled the lawsuit and dropped its claims in October 2017. The rail terminal will not be built. P66’s crude oil trains will not be headed through California to SLO County.

*On Feb. 1, 2016 P66 reduced their proposal to 150 trains arriving per year (300 arriving/departing).