Jim Wilson/The New York Times
The fortunes of the Chevron oil refinery fortunes and the city of Richmond have diverged in recent years, creating friction.

By MALIA WOLLAN
Published: October 31, 2009
Competing tours offer two very distinct ways to see the industrial city of Richmond in the East Bay.

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The New York Times
Chevron is Richmond’s biggest employer and taxpayer.

A “Toxic Tour,” led by an environmental justice group, circles Chevron’s Richmond Refinery and passes through what the group’s local members call the city’s “petrochemical corridor.” On Chevron’s newly offered refinery tours, visitors don hard hats and safety glasses and hear of strict emission standards, exemplary safety records and jobs, jobs, jobs.

Chevron is the city’s biggest employer and taxpayer, but in recent years its fortunes and the city’s have diverged. The slowing economy trounced Richmond, while the oil price spike helped Chevron turn record profits.

The city and the corporation exist on entirely different scales — Richmond, with a population of 102,120 people, is lost among its larger neighbors, Oakland and San Francisco; Chevron is a global corporation with 62,000 employees operating in more than 100 countries.

That prosperity gap helped galvanize segments of the population against the company that has dominated the physical, economic and psychic landscape here for more than 100 years.

Gayle McLaughlin, rode the anger into City Hall in 2006. Ms. McLaughlin, the city’s first Green mayor, is now Chevron’s avowed antagonist. As Chevron’s profits climbed, it provided more fodder for her attacks.

Until recently, Chevron had been doing well. The second-largest oil company in the United States, it earned $23.9 billion last year, topping off five consecutive years of record profits. Though Friday’s third quarter earnings report showed profits down 51 percent, Ms. McLaughlin still brandishes Chevron’s financial statements like weapons.

They contrast starkly with the poverty in this city, which has an unemployment rate of 18 percent and the third-highest crime rate per capita in the state.

“It always seems really obscene to me that we have such growing profits experienced by this large oil company while people here are struggling to pay for food and rent for their families,” the mayor said in an interview .

A series of lawsuits and a key ballot measure passed since Ms. McLaughlin’s victory show a city torn between the generally liberal, anticorporate politics of the Bay Area and its own history as a loyal company town. Environmental groups have so far been able to block a retrofit of the Chevron refinery while the city has tried to raise the company’s taxes. Chevron, which says the changes to the refinery will reduce pollution, has appealed the ruling.

The taxes paid by the Richmond refinery account for 33 percent to 50 percent of the city’s $144 million general budget this year. The refinery employs some 1,300 people, making it unclear what the city would do without Chevron.

But between the low profit margins for refineries across the country and the new taxes levied on the refinery, company leaders say they are considering doing without Richmond. While residents might not want anything that drastic, they do seem to want the corporation to do more for the city. Last fall, they passed a ballot initiative, Measure T, whose backers adopted the slogan “A Fair Share for Richmond.”

The measure charged businesses an additional tax of a quarter-percent of the value of the raw materials used in manufacturing. For Chevron, that additional tax was $21 million this year. In February the company filed suit in Contra Costa County Superior Court arguing that the measure violated state and federal law.

The suit remains unresolved, but Chevron paid the additional $21 million in April. The city kept the money, though it refrained from spending it after the judge in the case warned not to. In February the company also agreed to pay the city $28 million as part of a legal settlement after a city audit concluded that the refinery had underpaid utility taxes.

Then, in July, another county judge halted Chevron’s effort to retrofit the refinery, saying the company’s environmental review was unclear on a crucial issue: whether the upgrade was designed to process a heavier grade of crude oil.

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