If you own half a pig, it’s your pig

Diamond’s petition says, “Diamond Pipeline LLC, a joint venture between Plains All American (PAA) Pipeline and Valero, will transport crude oil from the PAA pipeline terminal in Cushing, Okla., to the Valero refinery in Memphis, Tenn.”

A joint venture is a business entity created by two or more parties, to share the costs and benefits of a project. Who benefits from this venture? Valero gets reliable deliveries and all the crude oil it needs. PAA gets paid for each barrel of oil delivered to Valero. No one else benefits.

The so-called Diamond Benefits claim, “to provide a direct and reliable route to transport domestic sweet crude to Valero’s Memphis Refinery… enhance the Refinery’s long-term viability and assist in providing greater Energy Independence for our nation,” is all for Valero.

No Open Season

Diamonds Are Forever – But Northbound Capline Crude Flows May be Living on Borrowed Time, a 2014 RBN Energy report says, “Project details are pretty thin… there will not be an Open Season to solicit shipper interest in using the Diamond pipeline, because Valero is the only interested shipper for what amounts to a Cushing lateral pipeline to feed their Memphis refinery.”

Capline, the 1.2 million barrels per day pipeline, from the Gulf of Mexico to Patoka, Illinois, has been the source of crude for Valero. Valero owns the Collierville pipeline connecting with Capline.

Long-term shipping agreements are negotiated during Open Season to ensure toll revenues for pipeline investors. Tolls are fees paid to ship a barrel of oil, around $5 per barrel, paid on delivery.

PAA is going to dance around the notion of a private, dedicated Valero pipeline, and the lack of an open season. Stephen Lee’s Direct Testimony before the Public Service Commission says, “the pipeline will include a truck unloading facility located in Van Buren County, Arkansas.” Has anyone seen it?

Karen Rugaard, PAA Public Relations Director, has ignored my questions on the number of local jobs and economic impact. Strike USA is Texas-based, and using several subcontractors. Global Security patrolling the rights-of-way has offices in Oklahoma and Florida. The Economic Impact, “over $11 million annual tax revenue to communities along the pipeline route,” is a vague, unsupported promise. Would it be prorated on a per mile basis for each county? Would tax revenues decline after year one? Taxes are confidential and some pay no taxes. Don’t count your chickens…

Energy Independence

Transitioning away as quickly as possible from burning fossil fuels is what energy independence and security looks like. Ironically, John Lester, Clarksville Light & Water General Manager, the sole intervener opposing APSC’s Diamond approval, is taking the lead: “Clarksville Solar Facility Showcases Energy Independence,” KUAR, July 20, 2017

Refinery toxic emissions, flaring, explosions and fires

A 2014 Valero environmental study showed the 76-year-old Memphis refinery releases 528 pounds of highly toxic hydrogen cyanide per day. Valero had been reporting 528 pounds per year! Valero reported the higher emissions to the National Response Center, the federal government’s 24-hour communications facility for toxic releases. “There was no indication of when the ongoing releases began at the refinery but they are continuing. Valero discovered the elevated discharges of hydrogen cyanide through voluntary enhanced monitoring,” the report said.

On a good day, refineries’ flare towers burn toxic gases around the clock creating carbon dioxide. When the power goes out, massive amounts of toxic gases are burned to prevent explosions, as a safety procedure. If you see thick black smoke in a refinery, hold your breath, it is a highly toxic fire. Hurricane Harvey floods showed the number of refineries on the Gulf Coast, with ample capacity for petroleum exports. Heavy flooding takes out power and triggers fires and explosions.

Construction hazards

A June 25, 2017 report Property owner lays blame on pipeline company, says “They cut all my gates down and the pipe fencing – my neighbor’s cattle are in my pastures, and yesterday I was attacked by a bull.” People deserve better.

Why would we want to enhance the Valero refinery’s long-term viability? Shut it down and stop Diamond!

Dr. Luis Contreras