Court Blocks Effort to Halt Construction on Chevron Refinery : Environment: The appellate ruling means construction of clean-burning fuel plant in El Segundo can continue. EPA says it will probably levy fines.

In a seesaw bureaucratic battle over the fate of a Chevron USA Inc. clean fuels project, a federal appeals court blocked an effort Friday by federal officials to halt construction of the $150-million low-emissions gasoline plant in El Segundo.

Earlier in the day, the U.S. Environmental Protection Agency had ordered Chevron to halt construction because the proposed plant lacked a necessary air quality permit.

The project employs 300 people and, ironically, is being built to meet an EPA deadline to manufacture cleaner burning automobile fuel. Although it was not issued a permit, Chevron had received permission in July to begin construction from the South Coast Air Quality Management District, the agency responsible for issuing the permit. The EPA subsequently argued that the AQMD had acted wrongly and sought to halt construction.

Chevron attorney Dick Harris said the company argued to the court that Chevron was “building a project which would have the net effect of reduced emissions at the refinery as well as fewer tailpipe emissions. It was a federally mandated project, and the EPA was telling us to stop. We could not identify any legitimate public policy they were trying to advance.”

Rod Spackman, manager of public affairs for Chevron, said late Friday that the company had complied with the order to shut down by 2 p.m., but planned to resume work Monday.

Bill Glenn, a spokesman for the EPA, said the agency was disappointed by the ruling, but it would not affect its intention of imposing civil penalties on Chevron for going ahead without a permit.

“In all likelihood, we are going to be pursuing them,” he said. The company could be fined up to $25,000 a day. Construction began last spring.

Details of the ruling, which was issued late Friday by the U.S. 9th Circuit Court of Appeals, were sketchy. However, officials of Chevron and the EPA said it came in the form of an indefinite stay.

EPA officials had downplayed the significance of their shutdown order, saying they felt there was a good chance the disputed permit would be issued next week.

“U.S. EPA does not believe that this order will affect the number of jobs at Chevron’s reformulated fuel project--only the timing of the construction,” the agency said in a statement issued before the court intervened Friday.

The EPA’s order was one in a series of contradictory bureaucratic actions which began when the AQMD authorized Chevron to conduct work on its fuel-reformulation plant before a permit was issued. AQMD officials said they gave written permission for Chevron to do the work as long as it would not produce any emissions.

The EPA intervened after a pipe fitters’ union, which has tangled with Chevron over labor issues in the past, complained that the refiner was building a project that posed environmental hazards to workers as well as people living in the area.

“We felt there were severe environmental impacts that had not been disclosed,” said Tom Adams, a lawyer for Pipe Fitters Local 250. Adams said the union is concerned about possible soil contamination at the refinery as well as the potential for toxic emissions once the plant is running. Adams said the union had also expressed concern that an accident at the plant could trigger the release of lethal gas.

According to Adams, the environmental impact report, which must be approved by the AQMD before it can issue a permit, has not addressed the issues raised by the union.

Adams also acknowledged that the pipe fitters have had labor difficulties with Chevron over the years.

“The union has had major concerns about Chevron’s use of non-union, out-of-state workers,” he said. “We don’t think the local economy is benefiting from this project the way it should.”

James Lents, executive officer of the AQMD, said Friday that he was optimistic that the permit would be issued by the end of next week.

“We’re, at this stage, finishing up (the environmental review) and preliminary indications are that it’s OK,” Lents said. But he added that the only remaining issue is addressing the pipe fitters’ concerns.

“Assuming those answers are OK, we expect to be able to issue the permit by the end of the week,” Lents said.

According to Sam Atwood, an AQMD public information officer, the district told Chevron in July that, even without a permit, the company “could move some of its equipment into place and do some preliminary work as long as the equipment wasn’t hooked up to utility power or the refinery so that emissions would result.”

After the EPA learned of the AQMD’s action, federal officials criticized Lents for authorizing Chevron to begin work and three weeks ago warned the company that it was violating the law.

Last week, it ordered Chevron to stop work on the project but then issued a reprieve to give the company a week to negotiate.

In reinstituting the shutdown order Friday, the EPA said “discussions between the agency and Chevron this week have not revealed any new information that would provide a legal basis for allowing construction to continue without a permit.”

The statement went on to say that “while Chevron’s project is designed to produce cleaner fuels for the state’s automobiles, it still requires appropriate, legally required review to assure that impacts on neighboring communities are limited in a verifiable and enforceable manner.”

Allowing Chevron to continue work without a permit, the statement said, “would set a precedent that could encourage others to begin construction without proper public and environmental review.”

The project is part of Chevron’s $700-million refinery overhaul undertaken to meet a January, 1995, federal mandate to begin manufacturing cleaner burning gasoline. The reformulated fuel program is expected to cut car emissions by 10% to 30%.