U.S. Safety Ruling causes Canada company to suspend use of some DOT-111 tank cars

Repost from The Calgary Herald

Crude-by-rail shipper deals with U.S. ruling

Some cars suspended but shipments continuing, says Torq CEO

Crude-by-rail shipper deals with U.S. ruling
Emergency workers examine the aftermath of a train derailment and fire in Lac-Megantic, Que., last July. Photograph by: Ryan Remiorz , AP

By Dan Healing, Calgary Herald February 26, 2014

CALGARY — Some tanker cars in Western Canada have been temporarily suspended from being used to ship oil in the wake of Tuesday’s U.S. rail safety ruling, the chief executive of Calgary-based terminal operator Torq Transloading Inc. said Wednesday.

But service is continuing to be offered, Jarrett Zielinski told the Herald.

“Everything is under regulatory review. The shipments we ship are compliant,” he said in an interview.

“Every precaution is being taken on our end. We are working collaboratively with the regulators, the railroads and the customers to ensure all of our shipments are compliant and there has been no interruption of service.”

A story by Bloomberg earlier in the day had quoted a Torq executive as saying shipments had been halted but Zielinski said that’s not true.

The U.S. Transportation Department on Tuesday ordered energy companies to immediately conduct chemical tests on all crude intended for rail shipment and warned that certain commodities require more robust tank cars for transport.

Zielinski said his private company ships between 40,000 and 45,000 barrels of oil per day but it doesn’t own the cars. He said the “vast majority” of the cars are compliant and any that are questionable have been “temporarily suspended while they are reclassified.”

He said about 95 per cent of the oil his company ships is undiluted heavy oil, which has a much lower risk of igniting than the light crudes shipped from the North Dakota Bakken — such as the cargo aboard the train that exploded in July at Lac-Megantic, Que., killing 47 people.

Most of the oil is bound for the United States. He said Torq frequently tests the product.

Two Calgary-based oilsands shippers said they don’t believe the U.S. ruling will affect their transportation plans.

Producer MEG Energy Corp., which began shipping diluted bitumen in December through the Canexus Corp. rail-loading facility northeast of Edmonton, and moved six unit trains each carrying 60,000 barrels of diluted bitumen in January, is not affected, said spokesman Brad Bellows.

“The cars we have made arrangements to move our products on are very modern cars that meet or exceed all the recent standards and the outlook,” he said.

Spokesman Pius Rolheiser of Imperial Oil Ltd. said the new rules are not expected to affect a project to build a 100,000-barrel-per-day oil loading terminal near Edmonton.

“We’re still in the process of design and manufacture of the cars but I can tell you with certainty they will meet Canadian safety guidelines,” he said. “The tanker cars we use in this project will meet the DOT 111-F specification, which is the American Association of Railroads current specs. That requires thicker shells as well as steel shields to guard both ends of the car.”

Imperial Oil will be the base load customer in the project it is sharing with American transportation partner Kinder Morgan Energy Partners. Startup is set for next December and the terminal is expected to ship diluted bitumen from Imperial’s Kearl oilsands mine.

    Senator Schumer proposes speedier phase-out of DOT-111 tanker cars

    Repost from The Buffalo News

    Rail cars through Buffalo post risk that Schumer seeks to end

    Schumer proposes speedier phase-out

    Crews work on some overturned crude oil cars in the CSX yard in Cheektowaga on Dec. 10. The accident did not cause a spill.

    Crews work on some overturned crude oil cars in the CSX yard in Cheektowaga on Dec. 10. The accident did not cause a spill. Mark Mulville/Buffalo News

    By Jerry Zremski | News Washington Bureau Chief
    February 26, 2014 – 8:14 PM, updated February 27, 2014

    WASHINGTON – A hundred tanker cars long, one or two crude oil trains from out west roll through Buffalo every day, along with a train carrying 81 tanker cars of ethanol.

    And it all sounds pretty risky to Sen. Charles E. Schumer, D-N.Y., who proposed Wednesday that in densely populated New York, the rail industry speed up the phase-out of the most dangerous kind of crude oil rail tanker cars: the type involved in a deadly derailment in Quebec last year and a much less disastrous one in Cheektowaga last December.

    Schumer’s suggestion won the support of Cheektowaga Town Supervisor Mary Holtz, who said people in the town were shaken up by the Dec. 10 derailment even though it caused no spills or injuries.

    “We have a lot of houses that are very close to the railroad tracks, so if anything happens here, we’re going to blow up,” Holtz said.

    That’s exactly what happened in the town of Lac-Megantic, Quebec, last July 6, when a train carrying crude oil derailed. Several tanker cars exploded, 47 people died, and half of the town’s downtown area was destroyed.

    There are parallels between the tanker cars that blew up in Quebec and those that roll through Buffalo on a daily basis. They all carry oil from North Dakota’s Bakken Shale – the biggest American oil play in decades – to points east. And rail industry sources said most of the oil tanker cars that roll through Buffalo are the DOT-111 model, which is the very same model used on the train that derailed in Quebec.

    DOT-111 tanker cars aren’t armored or pressurized, making them much more likely to puncture or explode than newer, more sophisticated models.

    And while the Federal Railroad Administration and the Pipeline and Hazardous Materials Safety Administration are drawing up new rules that will either eliminate the use of DOT-111s or require that they be retrofitted to meet new safety standards, Schumer said that private oil car leasing companies should draw up a plan by July 1 to phase out their use in New York.

    “Transporting crude oil by rail in outdated tank cars – which have been proven to fail frequently upon derailment – is a ticking time bomb,” Schumer said.

    Schumer’s statement follows a voluntary agreement struck last week by the U.S. Department of Transportation and the Association of American Railroads that aims to make the rail transport of crude oil safer.

    Part of that voluntary agreement calls for lowering the speed limit for oil trains passing through Buffalo and New York City from 50 mph to 40 mph. But Schumer said that speed limit should be enacted for trains passing through all heavily populated upstate areas.

    In statements, CSX Corp. – which operates the trains that pass through Buffalo – and the Association of American Railroads stressed that they are taking steps to ensure that oil is being transported safely.

    “The DOT-111 tank cars operating today are designed to meet current federal and regulatory requirements as well as industry standards,” CSX said. “The federal government establishes the minimum construction standards for the type of tank cars in which hazardous materials can be transported.”

    Meanwhile, the Association of American Railroads said the industry was trying to assess how lower speed limits would affect railroad delivery times.

    “In recognition of the significant growth in crude oil moving by rail, and community concerns such as those raised by Sen. Schumer, freight railroads were willing to quickly come together and identify the voluntary steps announced last week,” the rail industry group said.

    “In fact, the agreement with DOT does contain a commitment to work with communities to find ways to address their individual concerns.”

    The voluntary safety measures also include increased track inspections, better braking technology and safer routing for crude oil trains.

    Those measures follow an astounding increase in the amount of crude oil shipped via rail since the beginning of the North Dakota oil boom.

    Schumer noted that trains carried nearly 1,400 carloads of oil daily last year, compared with only 31 in 2009. And while CSX would not confirm the number of oil cars rolling through Buffalo, a source with the Brotherhood of Locomotive and Engineers Trainmen said one or two 100-car crude oil trains pass through the city daily, along with that train carrying ethanol.

    The trains pass over the Fort-Erie/Buffalo rail bridge and then proceed eastward over tracks that parallel Broadway into Cheektowaga before moving on through Rochester, Syracuse, Utica and Albany. There, they turn southward through New Jersey.

    In addition to the spill-free Cheektowaga derailment last December, federal statistics show three small spills of about a gallon each from trains passing through Buffalo last year.

    In addition, a minor ethanol leak occurred from a train passing through the area last July, said Kate Hudson, watershed program director at Riverkeeper Inc., a New York environmental group that has called for an immediate moratorium on rail shipments of crude oil in the state.

    Those DOT-111 rail cars just aren’t safe, Hudson said, likening them to “a Pepsi can on wheels.”

      Panel of Experts meeting in Martinez Feb. 26

      On Facebook: facebook.com/events/834097813284056/
      Download, print and distribute the FLYER

      Big Oil Trains: Derailing Community Safety

      A forum about increased rail accidents, refinery dangers, and climate change.
      BigOilInOurMidst_header
      How will refinery expansions and transportation of crude oil by rail affect YOUR town?

      A panel of experts and activists will inform residents of Benicia, Martinez, Rodeo, Crockett and Port Costa of Big Oil’s plans, both local and global.

      Wednesday, Feb. 26th at 6:30 PM
      Veterans War Memorial Building, 930 Ward Street, Martinez
      (@ the corner of Ward and Court Streets)

      Please join our panelists for presentations and Q & A:

      • Marilaine Savard: spokesperson for a citizens’ group in the region of Lac-Mégantic, Québec.  Last year, a string of exploding petroleum rail cars destroyed the center of the town and claimed 47 lives.
      • Antonia Juhasz: oil industry analyst, journalist, and author of “The Tyranny of Oil: The World’s Most Powerful Industry and What We Must do to Stop It” and “Black Tide: the Devastating Impact of the Gulf Oil Spill”.
      • Diane Bailey, senior scientist at NRDC (Natural Resources Defense Council).
      • Marilyn Bardet:  watchdog activist for the Valero refinery  and founding member of Benicia’s Good Neighbor Steering Committee.
      • Nancy Rieser: spokesperson, Crockett-Rodeo-Hercules Working Group, challenging Phillips 66 on its Propane Expansion Project.
      • Kalli Graham: spokesperson, Pittsburg Defense Council, fighting the proposed WesPac oil terminal.

      Sponsored by:SunflowerAlliance_logoIn partnership with:
      Sierra Club, 350 Bay Area, Communities for a Better Environment, Richmond Progressive Alliance, ForestEthics, Pittsburg Defense Council, Pittsburg Ethics Council, Benicians for a Safe and Healthy Community, and the Crockett-Rodeo-Hercules Working Group.

      Download, print and distribute the FLYER

      For those in other towns, we have related forums in Pittsburg and Richmond!  See http://sunflower-alliance.org/forums-on-the-new-dangers-of-extreme-energy/