Editorial: The real crazy train: moving Bakken crude by rail
Chronicle Editorial Board, October 26, 2014
GOP gubernatorial candidate Neel Kashkari likes to deride Gov. Jerry Brown’s high-speed rail plan as the Crazy Train, but the loonier rail proposal is the one that would carry explosive Bakken crude 1,000 miles across the country to the Valero refinery in Benicia and other California refiners. Californians must have more assurances of safe rail operation before Valero’s oil-transfer-terminal plans proceed.
The City Council of Benicia, a town of 28,000 on the Carquinez Strait, has debated for months a draft environmental impact report on Valero’s plan to modify its refinery to bring in crude by rail. Oil, mostly from Alaska, currently enters the refinery via pipeline from ships docked at the Port of Benicia. Bakken crude, however, must come by rail because no major pipeline runs to the West Coast from North Dakota where it is extracted from the oil shale.
Community concerns include environmental risks but center on public safety because Bakken oil is more volatile than most other crudes. A derailed tanker train loaded with Bakken crude exploded in July 2013, killing 47 people in Canada and alerting transportation officials and the public to the real hazards of transporting this easily ignited oil. For Benicians, potentially explosive trains are no theoretical debate as two 50-car trains would pass daily through the north end of town.
Nor is it an abstract discussion for the residents of Roseville, Sacramento, West Sacramento and Davis, where trains would roll through downtown daily. Davis Mayor Dan Wolk noted: “This may be technically a city of Benicia decision, but no city is an island in our interconnected region. Our community has real concerns about the potential safety impacts.”
So does California Attorney General Kamala Harris, who wrote Benicia officials earlier this month that “the DEIR fails to provide sufficient information for an adequate analysis of the safety risks from transportation or the air quality impacts from refining the new crude. These issues must be addressed and corrected before the City Council of Benicia takes action.” It is unclear whether the state would sue if the city failed to act.
Valero representatives clearly have no interest in expanding the scope of the permitting process to the state. Valero spokesman Bill Day told The Chronicle, “This is really the city of Benicia’s decision.”
Harris also wrote to Benicia that the draft report “ignores reasonably foreseeable project impacts by impermissibly limiting the scope of the affected environment analyzed to only the 69-mile stretch from Benicia to Roseville.” With so many communities affected, the state should stand firm and Solano County should use its authority over the refinery-expansion permits to persuade Valero to negotiate better public safety protections from the railroads, such as state-of-the-art train-control technology.
What’s really crazy is the federal law that allows pre-emption of municipal and state law when it comes to critical decisions on rail safety. Affected communities deserve a say over what rolls through their towns.
Behind closed doors, the Benicia City Attorney and certain members of the city council have attempted and failed to strip the mayor of her First Amendment right of free speech. Even though they refuse to identify themselves to the public, the council members have revealed their desperation to salvage Valero’s doomed and dangerous Crude By Rail project.
The city attorney has a much bigger problem— the State Attorney General has called out the city for the legal inadequacy of Valero’s Crude by Rail Draft Environmental Impact Report (DEIR). Lined up behind the state is a long list of other public agencies, NGO’s and community groups ready to humiliate the city in court should it dare certify the document without major revisions and recirculation.
A competent city attorney, acting in the public interest, would extricate us from this legal dilemma by withdrawing the currently flawed DEIR and defend freedom of speech with all her might.
Jan Cox Golovich/Former member Benicia City Council
Berkshire’s BNSF to Add Surcharge on Older Oil Tank Cars
By Thomas Black, Dan Murtaugh and Lynn Doan, Oct 24, 2014
BNSF Railway Co. plans to apply a $1,000 surcharge for each older tank car that hauls oil, as the railroad owned by Warren Buffett’s Berkshire Hathaway Inc. encourages shippers to scrap the puncture-prone cars.
The charge, which will take effect Jan. 1, will add about $1.50 a barrel to the cost of shipping oil across the country. It’s the first one announced by a major U.S. railroad for older cars known as DOT-111s, and won’t apply to cars called CPC-1232s that are built to higher standards adopted in October 2011, according to a BNSF notice.
The Obama administration in July proposed phasing out thousands of the older tank cars within two years and lowering speed limits as part of new rules to reduce the risk of hauling crude by rail. The plan followed a series of fiery accidents, including the derailment and explosion of a crude train last year that killed 47 people in the Canadian town of Lac Mégantic.
The extraction of oil from shale fields with limited pipelines, such as in North Dakota’s Bakken, caused U.S. rail carloads of crude to surge to 415,000 last year from 9,500 in 2008, according to the Transportation Department.
Mike Trevino, a spokesman for BNSF, confirmed the surcharge notice.
Tank cars typically hold about 700 barrels of oil, which means the surcharge would boost the cost of shipping in older cars by $1.50 a barrel. The cost to ship crude by train to East Coast refineries from North Dakota is about $9 to $10 a barrel, San Antonio-based Tesoro Corp. said in a September presentation.
BNSF, which operates tracks that connect into the Bakken and other shale oil fields, said in February it plans to order 5,000 new crude tank cars with safety standards higher than the CPC-1232s in an effort to push shippers toward safer cars.
Repost from The Sacramento Bee [Editor: Highly significant development – a must read! – RS]
New crude oil report concludes risks of train spills are real
By Tony Bizjak, 10/23/2014
Mile-long oil trains that are expected to crisscross California daily in the coming years pose significant risks to residents of urban areas, including Sacramento, a new report concludes, contradicting earlier studies that found no major safety concerns.
The report, issued by San Luis Obispo County officials, is based on a plan by Phillips 66 to transport crude oil on 80-car trains, five days a week, to its Santa Maria refinery, some likely through Sacramento. The authors looked at the cumulative impact of all oil trains that could come through California on a daily basis and came to the conclusion that the risk of oil spills and fires is real, and offered suggestions on how those issues should be addressed.
“Up to seven crude oil trains a day could travel on the stretch of track between Roseville and Sacramento,” the report reads. “The cumulative risk would be significant.”
The analysis, called a draft environmental impact report, contrasts with two recent analyses of similar crude-by-rail projects in Benicia and Bakersfield. Valero Refining Co. in Benicia and Alon USA in Bakersfield are proposing to transport crude oil twice a day on trains into their facilities. The Valero trains would come through downtown Sacramento, Roseville, West Sacramento and Davis, likely on the same tracks as the Santa Maria refinery trains. Some of the Bakersfield-bound trains also may come through Sacramento.
Those reports, issued earlier this summer, concluded the risk of spills and oil fires in Sacramento and other areas is not significant and requires no additional safety steps. Those earlier analyses have been challenged. An environmental group, Earthjustice, has sued Kern County over its Bakersfield project review. Two state safety agencies and the state attorney general have sent letters to Benicia challenging the adequacy of its review of the Valero project.
San Luis Obispo County officials said they decided to go beyond what was done in Benicia and Kern County – breaking new ground in California’s evolving crude-by-rail debate – by conducting a qualitative risk assessment, to understand the ramifications of “reasonable” worst-case oil spill scenarios. The new report is an amended version of an earlier report San Luis Obispo issued last year, which also had been challenged as inadequate.
“We have been trying to keep an eye on what is going on around the state, to understand comments coming in on the Valero project and others, and to take a holistic approach,” said San Luis Obispo County project manager Murry Wilson.
That qualitative assessment takes special note of spill risks in urban areas, saying, “The risk is primarily driven by the high-threat urban areas (Los Angeles, Bay Area and Sacramento) since these are the locations where fairly long stretches of track are in close proximity to heavily populated areas.” A series of tables in the report indicate that injuries and deaths could occur up to a third of a mile from a crash site in urban areas, if there was a tank car rupture and explosive fire.
The report points out that derailments of oil trains are rare. The chances of a train spilling more than 100 gallons of oil en route from the California border in the north state to the Santa Maria refinery are anywhere from one-in-19 to one-in-31 in any given year, depending on the route, the county estimated. Similarly, railroad industry officials say their data show that 99.99 percent of freight trains arrive at their destinations safely.
But the dramatic increase in the last few years of crude oil shipments around the United States and Canada, often on 100-car trains, has led to several major derailments and fires, prompting concerns from cities along rail lines, and federal safety officials. Last year in Canada, a runaway crude oil train crashed in a small town and exploded, killing 47 people, many as they slept. Several other crude oil trains have been involved in dramatic explosions around the country in the past year, prompting evacuations of residential areas.
At the moment, two crude oil trains run to or through Sacramento. One carries highly flammable Bakken crude from North Dakota through midtown Sacramento a few times a month to a distribution facility in the East Bay. Another periodically brings oil to a transfer station at McClellan Business Park in North Highlands. The company that runs the transfer station agreed this week to halt those shipments after air-quality officials concluded they had issued the permit in error.
The daily trains to the Santa Maria refinery, if approved, are expected to travel on both southern or northern routes into the state, starting in 2016, depending on where Phillips decides to buy its U.S.-produced oil. The Northern California route is uncertain east of Roseville. West of Roseville, trains are likely to run through downtown Sacramento, West Sacramento, downtown Davis and through East Bay cities, but also could take a route through Sacramento to Stockton, then west into the Bay Area.
San Luis Obispo County officials, in their report, also went considerably further than officials in Benicia and Kern County on the question of “mitigation” or preventive measures that could be put in place to minimize risks of crashes and spills.
Federal law pre-empts cities, counties and states from imposing any safety requirements on the railroads. San Luis Obispo County officials suggest, however, in their report that the county could try using its permitting authority over the proposed Phillips 66 refinery expansion to require Phillips to sign agreements with the railroads ensuring that the railroads use safer tanker cars than those currently in use, and employ better train-control computer technology than is currently in place.
An expert on railroad law told The Sacramento Bee this week that a court likely would have to decide if such a move is legal. “The federal pre-emption of the local regulation of railroads is very strong, about as strong a pre-emption as exists,” said attorney Mike Conneran of the Hanson Bridgett law firm in San Francisco. “It makes sense. You can’t have a different rule every time a rail car pulls into another state or city.”
“I can see there being a (legal) fight on that,” he said. “It is pretty close to the line in telling the railroad what to do. On the other hand, the county is putting the obligation on the refinery, not the railroad. I think the real question may come down to whether such a mitigation measure is feasible if the refinery can’t force the railroad to comply.”
If San Luis Obispo officials determine that they cannot feasibly mitigate for the Phillips 66 project’s potential hazards, the county can still approve the project, in accordance with California law, if county leaders adopt a “statement of overriding considerations,” saying that the project’s benefits outweigh the adverse effects.
Sacramento-area representatives, who have criticized Benicia’s review of its Valero project as inadequate, say they have not yet reviewed the San Luis Obispo analysis.
“We’ll do a similar analysis to what we filed with Benicia,” said Steve Cohn, chair of the Sacramento Area Council of Governments. He said San Luis Obispo’s determination that a train could spill here and cause significant damage is logical, but he wondered what proposed safety measures follow from that conclusion. “We’ll have to take a look,” he said.
It is uncertain at this point whether all of the crude oil train transport projects being proposed in California will actually be built. And, if they are, it’s uncertain still how many of them will route their trains through Sacramento and Northern California. The shipments will come from oil producing areas in North Dakota, Texas, Colorado and other states, as well as Canada.
Benicia officials did not respond to questions from The Bee for comment about their environmental analysis of the Valero project.
Notably, both Benicia and San Luis Obispo based a portion of their reports on analysis by an Illinois professor, Christopher Barkan, who also does work for a major rail industry lobbying group. Barkan’s methods of determining the potential frequency of oil spills have been questioned by state safety officials. Barkan has declined to speak to The Bee.
Barkan estimated that a spill from a Phillips 66 train between Roseville and Santa Maria might happen once in 46 years if the trains use the Altamont Pass and once in 59 years if the trains use the tracks along the Interstate 80 corridor. Those numbers appear to be based on trains using the best available tanker cars.