- Mendocino County
- Anderson Valley
by Will Parrish, April 14, 2016
Chevron's Richmond oil refinery is a colossal system of pipes, towers, smokestacks, and storage tanks perched on a peninsula of low hills rising from the San Francisco Bay. According to data from the California Air Resources Board (CARB), it was California's third largest emitter of climate change-inducing greenhouse gases (GHGs) out of all the state's industrial facilities in 2014.
Rich Padula is a well-known, long-time Willits-based timber broker and proprietor of an outfit called Coastal Forestlands, Ltd. He has owned the Willits Woods, about 15,000 acres of third- and fourth-growth redwoods, firs and tan oaks that encompasses much of the land south of Highway 20 between Willits and Jackson Demonstration Forest, since 1992.
Not much in the way of merchantable timber stands anywhere on Padula's land nowadays, being that preceding lumbermen unremittingly logged it starting in the early 1900s, after which Padula mopped up almost all that remained. But the Willits Woods property does boast a commodity that, here in California, has become increasingly saleable across the past decade, particularly to prodigious polluters like Chevron: carbon molecules.
California's cap-and-trade program allows the state's largest polluters to meet regulatory targets for greenhouse gas emission reductions by buying "credits" or "offsets" from GHG-saving projects in the US or Quebec on a commodity exchange market. CARB records show that, in the first two years the cap-and-trade program operated (2013-14), Chevron purchased nearly 484,032 GHG “offsets” from Padula's Willits Woods property.
Each “offset” is equivalent to a ton of stored carbon. Given that offsets have traded at between $10 and $13 per ton on the California-administered exchange, Chevron's purchases likely netted between $4.84 and $6.29 million to Padula before taxes. The lumberman also sold offsets to Houston-based Calpine Corporation, the US's largest supplier of electricity derived from natural gas; investor-owned utility behemoth PG&E; the multi-national oil corporation Valero; and a number of smaller private utilities and municipal utilities, according to the ARB records.
The investments by oil companies are a source of irony, in particular, given that Mendocino County residents have stood firmly against oil industry efforts to pry open access to land here. Most notably, thousands of local people mobilized to defeat an Interior Department proposal to develop 22 oil platforms off the coast of Mendocino and Humboldt counties in the late-1980s which the federal government pursued on the grounds that it would diminish the US's overweening dependence on the House of Saud and kindred oil producers overseas.
In 2014, county voters overwhelmingly approved a countywide ban on the oil and natural gas recovery technique of hydraulic fracturing, better known as fracking (Measure “H.”) In March 2014, I had reported here in the AVA that some fracking has occurred in Humboldt County in recent years, near the mouth of the Eel River.
Measure “H” also set forth the principle that so named “community rights” trump the rights of corporations to exploit the lands and waters of the county, although in this case local lumberman Padula has executed trades with the world's second largest oil corporation under the auspices of fighting global climate change.
The CARB records were reviewed and compiled by the Oakland-based Community Environmental Justice Alliance (CEJA), which opposes the cap-and-trade program on the grounds that it is less effective than at-source emissions reductions, and because it allows large polluters to buy their way out of reducing pollution that could otherwise alleviate the disproportionate health burdens borne by the people who live downwind and downstream of these facilties.
Owing to non-GHG pollutants that spew from the Chevron refinery, for example, Richmond residents suffer from one of the highest per-capita asthma rates in the US, while West Contra County (which is also home to the Shell and Tesoro refineries in Martinez) experiences a 20 percent greater cancer rate than the Bay Area as a whole.
Chevron is the second largest greenhouse gas emitter of any entity covered by the California cap-and-trade program during 2013-14, according to the CARB data, owing to combined emissions from its refineries in Richmond and El Segundo (a city so named because it was the second refinery of Chevron's forerunner, Standard Oil of California), as well as its vast oil fields in the Kern River basin and other areas of the southern San Joaquin Valley. The largest emitter was the Los Angeles Department of Water and Power, in large part because of its partial ownership of the coal-fired Navajo Generating Station in Page, Arizona, which sources its coal from a mine in an area of the Navajo Reservation called Black Mesa.
I have described the workings of the cap-and-trade program, which the CARB implemented pursuant to the 2006 California Global Warming Solutions Act (Assembly Bill 32), in several previous stories, including a January 20th piece entitled “Cap and Clear-Cut.” Until now, however, no other media outlets have reported on the insider details of transactions between purchasers and suppliers under the program.
Many proponents of cap-and-trade see it as a vitally important means of providing a financial incentive for timber companies and other forested landowners to increase their inventories of live trees in ways that exceed regulatory requirements.
Padula is one of the leading providers of offsets under the cap-and-trade program so far, although he is far from the only one. I will have more information in future editions of the AVA.