By Curtis Tate, Tribune News Service, October 6, 2014
WASHINGTON — Two railroad industry trade groups have quietly asked the U.S. Department of Transportation to drop its requirement that rail carriers transporting large volumes of Bakken crude oil notify state emergency officials.
The railroads have maintained that they already provide communities with adequate information about hazardous materials shipments and that public release of the data could harm the industry from a security and business standpoint. But they haven’t been successful in convincing numerous states or the federal government.
On Friday, the Federal Railroad Administration published a notice in the Federal Register concluding that the Bakken train data isn’t sensitive on either a security or commercial basis, nor is it protected from disclosure by any federal law.
“At this time, DOT finds no basis to conclude that the public disclosure of the information is detrimental to transportation safety,” the notice said.
Bakken crude oil, from the Upper Great Plains, is extracted from shale rock through hydraulic fracturing, and it has been involved in multiple accidents that resulted in large spills and fires. A July 2013 derailment in Quebec killed 47 people.
Friday’s notice came in response to a letter Aug. 29 from the Association of American Railroads and the American Short Line and Regional Railroad Association. The trade groups requested that the department withdraw its May 7 emergency order requiring railroads to notify states of cargoes of 1 million gallons or more of Bakken crude oil.
The DOT is seeking to make the order permanent. Initially, the railroads asked states to sign agreements that would exempt the information from open records laws, and many complied. Others refused, finding no reason the reports shouldn’t be shared publicly.
Copies of the notifications that news organizations obtained from those states show the counties the shipments traverse, the names of the routes and the approximate number of trains per week that met the department’s reporting threshold.
Repost from The Benicia Herald [Editor: Benicia’s own Grant Cooke has written a highly significant three-part series for The Benicia Herald, outlining the impending fall of the fossil fuel industry and concluding with good advice for the City of Benicia and other cities dependent on refineries for a major portion of their local revenue stream.This is the second of three parts. Read part one by CLICKING HERE and part three by CLICKING HERE. – RS]
Grant Cooke: Big Oil’s endgame: While fossil fuel costs keep rising, renewable costs fall
October 4, 2014, by Grant Cooke
“The Stone Age came to an end, not because we had a lack of stones, and the oil age will come to an end not because we have a lack of oil.” — Sheikh Ahmed-Zaki Yamani
THREE KEY FACTORS WILL PUT TO REST the fossil fuel industry and make the good Sheikh Yamani’s prediction come true. Two of them are discussed here.
The first is that the carbon emitters will be held accountable and made to pay for using the atmosphere as a garbage can. While still struggling to price the cost of pollution, most nations, as well as California, have come to realize that the heavy carbon emitters need to pay for the damage they have done. A cap-and-trade process is the first method to hold the emitters accountable. While imperfect and not nearly as effective as a straight carbon tax, this system is growing throughout the world. The European Union’s program, which started several years ago and was described by the fossil fuel interests as failing, is now deemed a success. It has become an established part of European culture and corporate practice. Various nations such as Australia, New Zealand, Canada, Korea and China have developed cap-and-trade programs as well.
California’s own program continues to grow, and our carbon offsets are tradable in parts of Canada as well. As it gains momentum, other states are watching California’s program and thinking about adopting their own. Impoverished state governments see cap-and-trade programs as a boon to their environment and a way to garner vital tax revenues. Since increases in personal income tax are so unpopular, cap-and-trade is seen as a way to bring new money into state treasuries without risking voter rebellions.
The pressure to make the major carbon emitters pay for their pollution is coming from the agreements made at the 2012 UN Conference on Climate Change in Doha, Qatar. At this conference world governments consolidated the gains of the last three years of international climate change negotiations and opened a gateway to greater ambition and action. Among the decisions was to concentrate on a universal climate agreement by 2015, which would come into effect in 2020. The 2015 conference will be held in Paris, and world governments are expecting much greater cooperation and agreement on carbon-reduction policies from the U.S. and other major emitters.
The world is slowly accepting the reality that the mitigation of climate change is a massive problem. A 2012 report by Climate Vulnerable Forum estimated that more than 100 million people will die and the international economy will lose out on more than 3 percent of GDP ($1.2 trillion) by 2030 if the world fails to tackle climate change. But because governments don’t want to use their funds for environmental cleanup and climate change mitigation, it will be the heavy emitters like the oil, coal and utility companies that will pay.
This cost for carbon cleanup, added to the increasing costs of extracting hard-to-get fossil fuel resources, will hit the oil industry hard. A 2013 Harvard University report showed that the cost externalities from coal were about 18 cents per kilowatt hour. Most U.S. end-users who rely on coal-generated electricity pay about 10 cents per kWh. If the external costs were added, those users would pay closer to 30 cents per kWh — which would severely impact those users’ lifestyles.
The second major factor hastening the end of today’s megalithic fossil fuel industries is “grid parity.” Grid parity is a technical term meaning that the cost to a consumer for electricity from a renewable source (without subsidies) is about equal to the cost from a traditional source — be it fossil fuel or nuclear. The Germans used grid parity to price their feed-in-tariff program, or FiT, that launched Energiewende.
Simply put, with PGE’s 2014 rate increase a Benicia resident or small commercial consumer pays about 20 (19.9) cents per kWh for electricity from traditional sources. If that same kWh came from a renewable source and cost the consumer an equal 20 cents, then the renewable source would be at “parity,” or equal to the cost of the traditional generation source.
However, the cost of traditional energy is rising, driven by higher extracting costs, increasing maintenance costs for natural gas pipelines and increases in operating cost at nuclear power plants. At the same time the costs for renewable energy — wind, solar photovoltaic and biowaste fuels — are declining.
The costs for wind generation have been and still are the lowest. However, the costs for solar are declining rapidly as its use spreads. Deutsche Bank reported in January 2014 that there were 19 regions around the world where unsubsidized PV solar power costs were competitive with other forms of generation. In fact, PV competes directly in price with oil, diesel and liquefied natural gas in much of Asia. This equality of costs with fossil fuel and natural gas is creating a worldwide solar boom in 2014-15.
In the U.S., almost 30 percent of last year’s added electricity capacity came from solar. In Vermont and Massachusetts, almost 100 percent added capacity came from solar. According to the U.S. Solar Energy Industries Association, more solar was installed in the U.S. in the past 18 months than in the last 30 years. Solar PV technology, which has been helped by the U.S. military, is improving so fast that it has achieved a virtuous circle.
As described by New York’s Sanford and Bernstein investment bank, we have entered an era of “global energy deflation.” This ratcheting down of energy costs may be slow to start, but as they argue, the fossil fuel-dominated energy market will experience a major decline in costs over the next decade. The market is entering a new order that will erode the viability of oil, gas and the fossil fuel continuum.
The report argues that the adoption of solar in developing markets will translate into less demand for kerosene and diesel oil. The adoption of solar in the Middle East means less oil demand, and the adoption of solar in China and developing Asia means less liquefied natural gas demand. Further, distributed solar in the U.S., Europe and Australia will likely reduce demand for natural gas.
They reason that while solar has a fractional share of the current market, within a decade solar PV and related battery storage may have such a large market share that it becomes a trigger for energy price deflation, with huge consequences for the massive fossil fuel industry that is dependent on continued growth.
Even the Saudis are betting on solar, investing more than $100 billion in 41 gigawatts of capacity, enough to cover 30 percent of their power needs by 2030. Most of the other Gulf states have similar plans.
Grant Cooke is a long-time Benicia resident and CEO of Sustainable Energy Associates. He is co-author, with Nobel Peace Prize winner Woodrow Clark, of “The Green Industrial Revolution: Energy, Engineering and Economics,” to be released in October by Elsevier.
■ Experts from area agencies give views on oil-carrying trains at Fairfield meeting; residents offer input, seek more answers
Government, health and safety experts offered their perspectives about the delivery of crude oil by train on Monday, and 50 residents who heard them in Fairfield offered lists of what they said else needs to be explained more clearly or examined more thoroughly.
Neither the panel nor the officials who organized the meeting, officially titled “Solano County Community Conversation on Rail Safety,” addressed the citizens’ inquiries or comments. Instead, the written responses were to be posted on the county’s website.
Rather than a back-and-forth discussion, after hearing the panelists residents assembled into three groups to have their say about safety, environmental and legislative matters related to crude deliveries by rail, then share their observations with the panel, officials and the rest of the audience.
District 2 Supervisor and Chairperson of the Solano County Board of Supervisors Linda Seifert said the meeting wasn’t about the proposed Valero Crude-by-Rail Project, in which the Benicia refinery is asking to expand Union Pacific Railroad operations into refinery property so crude oil can be brought in by train.
Valero, Seifert said, isn’t the only refinery interested in rail-delivered oil. “Oil by rail is likely to happen,” she said. “We must be ready.”
The audience heard Solano County Emergency Services Manager Don Ryan, Dixon Fire Chief Aaron McAlister, Valero Benicia Refinery Director of Health, Safety, Environment and Governmental Affairs Chris Howe, and Union Pacific Railroad Director of Public Affairs Corporate Relations Liisa Stark speak on emergency infrastructure and preparedness.
Paul Hensleigh, deputy air pollution control officer for Yolo Solano Air Quality Management District, and Antonia Juhasz, investigative writer, spoke on crude by rail’s impact on the environment.
Brandon Thomson, deputy district director for U.S. Rep. John Garamendi, D-Fairfield, and Danny Bernardini, field representative for state Sen. Lois Wolk, D-Davis, talked about regulatory and legislative initiatives, and the panelists’ remarks were summed up by Bill Emlen, director of Solano County Resource Management.
Ryan praised the county’s readiness and how various safety agencies readily help each other. “The (recent Napa) earthquake is an example of what the OES (Office of Emergency Services) does,” he said.
The county stands ready to help cities through mutual aid, just as cities stand ready to help the county handle emergencies in unincorporated parts of the county, he said.
McAlister said fire departments and other emergency responders stay ready through planning, preparation and training.
Howe said the Valero Crude-by-Rail Project is strictly logistics, and told the audience, “Preventing accidents is our top priority. We handle explosive materials every day.” His company has its own fire department, he added, which it sends off refinery property to participate in mutual-aid efforts as far away as Placer County.
Stark said, “Safety is number one” at Union Pacific, too, adding that her company delivers 99.997 percent of its hazardous cargo safely to its destination. She reminded the audience that railroads, which are governed primarily by the federal government, are mandated to carry any cargo, including hazardous materials, as long as it is packaged properly.
Computers and sonar are used to uncover railroad and car defects, Stark said; sonar can find a flaw as small as a grain of sand. In addition, every mile of track is checked twice a week, she said, and bridges are checked at least twice a year.
Hensleigh said his agency governs stationary sources of air pollution, but not mobile ones such as trains. However, he worried that additional emissions without mitigation could increase Spare the Air days in Solano and Yolo counties.
Juhasz brought slides of multiple train car derailments, including the fiery and fatal Lac-Megantic, Quebec, derailment on July 6, 2013, in which 47 people died after employees left a train that eventually rolled toward the city, where it caught fire and destroyed several downtown buildings.
She said the number of accidents has gone up because train oil delivery has increased from 81,000 barrels in 2003 to 900,000 barrels in 2013.
Yet the primarily domestic crude hasn’t reduced gasoline prices, Juhasz said, because the five Bay Area refineries export their products. She also warned that North Dakota crude is more volatile than crudes transported in the past.
Thomson said crude by rail is a new issue for the federal government, but added that Garamendi has sought increased regulation, from compliance with emergency orders to reducing volatility of Bakken crude and phasing out the weaker DOT-111 tanker cars, similar to those destroyed in the Quebec tragedy.
Bernardini said even though railroads are governed at the federal level, state governments still have a say on certain matters such as safety reform, and said California Oil Spill Prevention and Response (OSPR) has issued an 18-page response to the Valero Crude-by-Rail Draft Environmental Impact Report, disagreeing with its low expectations for oil spills and urging a 30-mph speed limit for trains traveling through cities.
“It’s clear this is an essential conversation,” Emlen said. “Clearly there are many perspectives.”
Speakers were limited to 10 minutes each, and in the breakout sessions audience members said they hadn’t heard enough.
Katherine Black, who has spoken in Benicia hearings on the Valero project, said crude by rail shouldn’t be “a foregone conclusion,” and suggested rejecting the practice altogether so no mitigation would be needed.
Mary Frances Kelly Poh, a 20-year member of the former Emergency Care Committee and a Benicia resident, said emergency responders need “unique training” as well as specialized equipment to cope with any derailments and spills.
She said railroads also need the same type of safety equipment and training used by California bay responders who handle oil spills on water.
Wendy Ginther of Fairfield expressed concern that Solano County isn’t ready to handle explosions or contamination of the Delta, a fertile agriculture area and important waterway and wildlife habitat.
Ed Ruszel, a Benicia business owner, asked whether the railroad’s hazardous materials plan had been updated from 2009, and urged Union Pacific provide a local contact to handle calls from the public, rather than to insist callers make reports to the company headquarters in Omaha, Neb.
Other participants suggested remaining in contact with state and federal officials to speed up legislative action. Many said more transparency is needed, including more public information about current operations.
Ryan answered one question about underground pipelines that carry jet fuel from Benicia to Travis Air Force Base near Fairfield.
Because of security concerns, he declined to say where those pipelines are, except to say they are 20 feet underground. Modern ones have automatic shutoff capabilities, he said.
He said area fire chiefs are aware of the potential for danger with oil-carrying trains, and have met to discuss the matter.
Valero Fire Chief Joe Bateman said his company has been providing other departments with training, and added that another weeklong session using a Union Pacific car is scheduled to take place later in October.
Foam is used to extinguish Bakken crude fires, he said, and his company alone has 22,000 gallons ready for deployment. Other departments have smaller amounts of fire suppressant foam, he said.
While many spoke on safety and infrastructure, Benicia Mayor Elizabeth Patterson was among those in attendance who sought information on crude by rail and legislation.
“It was informative,” Patterson said. “It covered a broad spectrum.”
She said Stark became frustrated at those who didn’t understand the role of the railroad, the federal mandates and how that has led to safety practices.
However, local governments are able to adopt some safety regulations that trains now observe, Patterson said.
“It ran rather seamlessly,” Seifert said. In the end, various community segments will need to “work collaboratively to solve the problem,” she said.