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Steven Steach, the current plant manager for the Torrance Refining Company (TRC), along with other company officials recently participated in a community meeting sponsored by the North Torrance HOA where they addressed many questions and concerns from the community and gave a brief background on the company and its current operations.

Purchase From ExxonMobil (Exxon)

According to Steach, Exxon had initially put the refinery up for sale in 2013. PBF Energy (PBF) made an offer at that time which Exxon rejected because they thought it was too low. Exxon did, however, accept an offer from a consortium of investment banking groups but that deal fell through when the investment bankers walked away from the deal after the explosion in February 2015.

After that deal fell apart, Exxon contacted PBF to see if there was still any interest. PBF made a lower offer than they did previously and a deal for $537 Million was announced in October of 2015. Interestingly, the refinery was not the main value of the purchase as $350 Million of the final price was actually for the M-70 pipeline and its tanks and pump stations that runs to the San Joaquin Valley. Thus, the refinery was only valued at $187 Million. In Steach’s estimation, that firesale price for the refinery showed you how badly Exxon wanted to get rid of the property.

Torrance Refining Company

Steach claims that TRC is actively engaged in trying to change the culture of the refinery. They want to be a good neighbor and operate the refinery in a safe and reliable fashion with a culture of responsibility, accountability, team work and open communication.  Some interesting details shared about the refinery included:

• Refinery has enthused workforce but lacks experience with a lot of young engineers;
• The refinery employs 626 people and an additional 500 contractors;
• The refinery provides high-paying jobs with average wages plus benefits equaling $128K a year; and
• According to Steach, every refinery job creates 9 other jobs in the local economy

Relationship with Southern California Edison (SCE)

Steach described the relationship Exxon had with SCE as adversarial but said his team had been meeting with them on a weekly basis since last April and that they now have a good relationship and are working to resolve issues.

November 2016 Flare Fire 

This fire occurred during a flare line isolation job. Steach apologized for the incident and said his previous Operations Manager was at fault. He said, “I thought my Operations Manager had the same under understanding I did of how to isolate the equipment. He didn’t. That was the last straw and I replaced him and we brought in a new Ops Manager. I do apologize for that.”

Use of Hydrofluoric Acid (HF)

Steach recognized HF as a hazard, but also wanted the community to know that the alternative, sulfuric acid, also posed significant dangers. In his words:

“As refiner’s we appreciate the hazards of HF, but the primary concern is corrosion. We have to understand the corrosion rates on our equipment and manage that. That’s our number one fear … Because we have to know when to replace that piping before it gets too thin. Sulfuric Acid is a challenge on corrosion.”

He also expressed a willingness to release more information to the public on the issue by stating:

“We met with experts in HF Akllyation this week, went through all the history of the consent decree, and all the proprietary reports and I know we are going to have to release these things to the people, especially the Torrance Refinery Action Alliance (TRAA). I know no one is going to believe us unless we release the reports and at the right time we will.”

Norton Study

Steach took issue with the conclusion from the Norton Study that they could convert from HF to sulfuric acid in 6 months for $100 Million. He conveyed that it wasn’t economically viable for a refinery to spend triple its value to convert. He felt the cost would be so much higher because the Norton Study, among other things, did not account for how much new equipment the refinery would have to purchase to convert.

The meeting concluded with a lively Q&A session as Steach took several questions from the audience.

Q. Of the 18 effectively operating refineries in California only two, including Torrance, use HF. Why have they moved on and you haven’t?

A: There is really only like 10 refineries. You are throwing things in there like asphalt plants that are not refiners. The industry is split 50/50. If you look at the industry there are about 150 alkylation plants around the country. 51% of them are HF.  It just so happens that in California that’s how it ended up.

Q: Some of the refiners converted from HF, is that right?

A: No one has ever converted from HF to Sulfuric Acid. No one has ever done it. The new plants being built are sulfuric because of the public’s concerns. I’ll grant you that, but there are a lot of HF plants out there. There are 4 that use modified HF.  We are one of those, but there are none that have the safety systems that we do.

Q: What about the Chevron plant in Salt Lake City that is changing their HF plant to liquid ions?

It’s interesting. There is a new technology out there called liquid ions that is actually a solid at room temperature. It’s a salt. It’s non-toxic. In theory, if they could get it to work you could do a conversion. They have some technical issues on re-generation they still have to resolve. The start-up for that is not until 2019. I’m interested to see if they resolve the start-up issues. We have too much at stake here. We don’t want to be running test plants in the middle of the City of Torrance, but if they prove that thing we’ll be first in line to go and we’ll take a group of people and go look at it.

Q: You compared the safety of the refinery to the safety mechanisms of an airplane. My son who is three blocks away from you could choose to go on an airplane, but he can’t choose where he can live and play. Recently I got another text about a fire at the refinery and I was panicky and wondered what I should do with my son. Should I leave him outside?  I was looking for more information and I found where you have had many incidents. Why are all these fires happening?

A. There was a recent sewer fire. The heavy rains caused the main drain of oily water to break and we also found a sinkhole around that same time. To repair that, we have to pump the oil to the other side of the plant through an underpass or we have to shut down the refinery. We chose to pump it over and we’ve been working on getting that done. The sewer fire was related to that, but we don’t know why.  The top metal hatches of the sewer box near where we put the temporary lines blew off and there was some oil inside that burned.

Q. What about flaring?

A. AQMD regulates flaring. There is planned and unplanned flaring where we have to notify AQMD. Planned flaring occurs during events like start-ups. An unplanned flaring event is usually when something malfunctions.

Q. What about HF?

A. On the acid issue, we haven’t had our say. It has all been TRAA putting stuff out. We are the new guy. Exxon chose not to share the facts. We do have to get approval to share some of this stuff as it is incumbent upon us to prove to you that what I’m saying is the truth.

Q. You say your ops manager didn’t know how to do the job you described. Don’t you have procedures or an operations manual that would tell you how to do it?  How does it look if you have upper level management that don’t know how to follow the operations manual?

A. It doesn’t look good. He was an Exxon employee that I took on. After that, I made a change of management. He’s accountable. I’m accountable. That shouldn’t have happened. Our procedures said there should have been a gas test before that valve was opened.

Q. What do you do in an earthquake?

A. We upgrade the refinery to meet all earthquake safety standards every 5 years in accordance with current safety regulations.

Q. Have you had any HF leaks?

A. We have had none since we began operating. We can’t speak for the previous owner.

Q. You won’t provide us the Material Safety Data Sheet (MSDS), but as near as we can tell the modified HF you currently use is 90% HF with a 10% additive, is that correct?

A. The numbers out there are all wrong. I can tell you that. The stuff I’ve seen from TRAA.  They are missing two major components of the acid. They are assuming everything is not additive and I don’t even know if their additive numbers are right. I don’t think so. They are missing water which is 5 or 6 times more effective than the additive. That’s a big component. They are also missing acid soluble oils which is a big component in the acid.

Q. If TRAA is wrong as you say, when then will you share all the information?

A. We do plan on having public meetings to share all the information. I realize there is no trust. That is really the issue. This was all decided with a judge with a lot of technical people. People don’t trust the outcome. They don’t trust the previous owner. They don’t know us. So we have to build trust.

Q. With regard to building trust, oftentimes when there is an incident it appears the community receives conflicting or inaccurate information. For example, not long ago there was a suspicious odor. People didn’t know if it came from the refinery. Some thought it was the Torrance sewer system. Based on the subsequent reporting, it appeared the refinery knew what happened right from the beginning but that information was not initially shared. Sometimes there is a flare and you get a TorranceAlert that says it was planned and then another saying it was unplanned or one saying it was a power outage and another report saying a mylar baloon. How can the refinery improve communications?

A. We have to notify Torrance Fire Department (TFD) within minutes if anything whatsoever happens. If something is going on, we establish a joint command and we make a joint command call. All the communication that goes to the public is controlled by TFD and the officers of emergency services. They decide if a TorranceAlerts goes out and if they do send one they decide the wording. That is how the communication works. We are trying to work with TFD to improve the communication, but that is an issue.  We acknowledge that.

Q. How can the community help?

A. Be open minded. Listen to the facts. Let both sides tell their story and make a decision on facts. Look at the source of the data. Just because something is printed in the newspaper and printed as a reference doesn’t make it a fact. That’s all I ask, to be treated fairly like everybody else. For example, there are HF users all over the state of California but they are just picking on us.

The six candidates for Torrance City Council appeared at Anza Elementary yesterday evening for a forum sponsored by the Southwood HOA.  Below is a summary of the candidate responses to some of the questions asked.

Q. The Mayor has been critical of the Daily Breeze reporting.  Do you share those concerns? 

• Eng: Any elected official has a special relationship with the media.  This is to be expected.  I don’t see this as a particular issue.
• Herring: The public has an obligation to take what they read with a grain of salt and do their own investigation, but I am endorsed by the Daily Breeze and so I think they are doing an excellent job.
• Rizzo: It’s important to have multiple sources and perspectives.  I have a concern with all media sources that you get the perspective of that individual reporter.
• Griffiths: It is important for the Council to share information with the media so people can understand what is going on in our City.  To shy away from that completely is an oversight.
• Dagastino: The quality of the Daily Breeze has really been declining. They are publishing opinions rather than news or actual facts.  When you try to get them to make corrections, it’s almost impossible to get them to print a retraction.
• Sheikh: It’s immature at this point to make any comments.  We need more time to do more research and do our due diligence.

Sidenote: The relationship between Mayor Furey and the Daily Breeze can be fairly characterized as “hostile.” Mayor Furey has been sharply critical of the local paper and reporter Nick Green.  He once attempted to have Nick Green removed from his position and recently referred to him as a “hatemonger.”

Q. Former Councilmembers have expressed concerns that the unions run the show in Torrance.  Do they?  Is too much union influence a concern?   

• Eng: Collective bargaining is important.  Historically unions have been very good, but they have been in decline so I am surprised anybody would think they wield too much power.  I think in general it’s been a good balance.
• Herring: I don’t have an informed response to that.  I respectfully pass.  We should have a good relationship between City and Union leaders.
• Rizzo: Union members are important stakeholders.  I don’t think they have the power that some people think they have, but they do have a place at the table.
• Griffiths: Unions do a great job representing all the different employee groups in our City, but there should be a line between their representation of their employees and their involvement in politics.  The unions involvement in politics creates a dangerous conflict of interest that concerns me greatly.
• Dagastino: I believe in people’s right to collective bargaining.  You have to work together to come to a decision.  The unions have to work with the City Council.
• Sheikh: I have not heard that so I am going to pass on that question, but unions have done a good job and are an important element of the City.

Sidenote: With regard to this subject, former councilmember and mayoral candidate Bill Sutherland stated in an interview that, “The unions have a lot of power.  They have more power than the Council has.  You can’t do anything without them signing off on it.”  Former Mayor Scotto echoed similar concerns in an article that appeared in the Daily Breeze shortly after the 2014 election.  The public employee unions are a major player in Torrance elections giving thousands of dollars to their preferred candidates.

Q. How would you pay for needed street repairs and infrastructure improvements?  

• Eng: The recession hurt the City, but it’s now turned around.  I would like more polling of the population to identify what streets need to be fixed and in what order.  It’s important that our streets look good.
• Herring: We should be more aggressive when it comes to our infrastructure.  Look at the streetscape around Lomita and Crenshaw where they have new developments coming in.  Why can’t that be all of Torrance?  We must find ways in which to do this.  I will make it priority. 
• Rizzo: It is time to do these projects as the economy is improving and as our revenue is increasing. These things take time.
• Griffiths: Our facilities and infrastructure are aging.  The recession hurt us as well as Exxon being offline, but with Exxon coming back that should help us.  We are spending a large percentage of our capital budget on infrastructure.
• Dagastino: When I was in DC a few weeks ago we talked about how we could secure more grant funding for the City.  We have to stay on top of our representatives in DC and Sacramento and aggressively pursue those grants.
• Sheikh: Spending on infrastructure will bring a good ROI to the City and its residents.

Side Commentary: Everybody agreed that more street improvements and infrastructure spending is needed, but nobody was able to articulate how they would pay for it with the possible exception of Dagastino who cited the need to capture more federal and state grants.

Q. What is your commitment to scrubbing the City’s budget to eliminate waste? How conservative will you be when it comes to spending our City’s funds?   

• Eng: I think Torrance has done a very good job.  I would like to see alternative budgets developed through the Planning Commission that give options on what to do if there is a shortfall or what to do if there is extra money.  Torrance has a conservative budget.
• Herring: I would audit the various departments and see if there is any fat that could be cut.
• Rizzo: I used to handle the police department budget.  Those budgets do get audited on a regular basis.  This is a very conservative Council.  We do spend our money wisely.
• Griffiths: I’ve been impressed with how City staff organizes their projects and how the City Manager determines what they will go forward with.  We didn’t just willy nilly approve everything that was proposed by staff.  I think we are being conservative and doing a really good job.
• Dagastino: My background is in finance.  I have an MBA in quantitative analysis.  I used to manage a billion dollar budget for American Airlines.
• Sheikh: We have to prioritize based on the needs of the City and the ROI.

Sidenote: The City operated at a deficit in several of the last fiscal years.  With an uptick in projected revenues, however, the Council approved at the last Council meeting to set aside funds for several new annual expenditures such as fireworks ($75K), historic preservation ordinance ($169K), tree ordinance ($168K), increase of Torrance Cultural Arts Center donation ($60K increase bringing total to $168K), and Police Department Social Media Manager ($86K).  While still voting yes to the budget, Councilwoman Ashcraft said she opposed the $75K expense for fireworks.

Q. What do you intend to do as a Councilmember to mitigate the risk to the community presented by the use of hydrofluoric acid (HF) at the refinery. 

• Eng: I am the only scientist running for Council.  I think the Council has missed a lot of opportunities dating back to 1989 by deffering to the experts and presuming they had to listen to what they said.  Many of those experts like Norton engineering have a history of working for Exxon and so it’s hard to get an independent expert. I would like to see a refinery commission created made of non-oil industry people that are scientific and technical experts.
• Herring: I am the only candidate calling for an independent safety monitor to be hired and paid for by fines levied against Exxon. It’s important to restore the credibility gap we now have between the community and Exxon.  HF is something that should not be used and we should work with local and state officials to eventually outlaw HF and find other safer additives to use.     
• Rizzo: I have no opinion on HF yet.  I am still waiting for the report to come back to determine whether there is a safer alternative.  Until that report is completed, I can’t give a solid opinion.
• Griffiths: HF is a very dangerous chemical, but dangerous chemicals can be used safely and that is my goal to ensure HF is being used safely.  There is a big misconception by a lot of people that we can just drain out the HF and replace it.  That’s not true.  It has to be redesigned for a different chemical process.  It’s a very complex process.  I am going to defer to the experts and will follow their recommendations on how to operate the refinery safely going forward.
• Dagastino: We should continue to explore alternatives and look to re-establish the Disaster Commission that was abolished about 4 years ago.  We could also form an Ad-Hoc Committee of residents that could provide suggestions to the City Council.
• Sheikh: I would like to get an opinion from experts and then we should ensure the refinery abides by all laws and regulations.

Sidenote: Organizations like the Torrance Refinery Action Alliance continue to advocate for the refinery to stop using HF in its operations.  One recent Facebook post from the organization criticized the Mayor and Council for their absence of a fighting spirit in the battle against HF and claimed that:

City elected representatives cower behind a slogan we hear repeatedly: “I’m not an expert. I will defer to the experts…There’s nothing the city can do.” Don’t ask for a city investigation, they advise. There are better ways to “handle” this problem. This is utter rubbish, meant to evade their responsibility as elected representatives of the public … Show some backbone, take a public stand and SPEAK UP!