Repost from 6 ABC Action News, Philadelphia, PA [Editor: The derailment happened in the CSX Corp. rail yard, and was very near to Interstate 95, Lincoln Financial Field and the Philadelphia Naval Yard. NBC Philadelphia reported that the tank cars remained upright but were “leaning.” See also The Morning Call, Allentown, PA. – RS]
11 train cars derail in South Philadelphia
January 31, 2015
Philadelphia firefighters and Hazmat crews swarmed the area near Lincoln Financial Field and the Philadelphia Naval Yard after 11 train cars went off the tracks early Saturday morning.
The derailment happened after 3:00 a.m. near South 11th Street just south of Interstate-95.
The cars were carrying crude oil.
After it was determined, there were no ruptured cars, crews turned the incident over to CSX.
CSX officials brought in cranes to upright the cars.
Rail Tank-Car Orders Threatened by U.S. Crude’s Collapse
By Katherine Chiglinsky, January 22, 2015
(Bloomberg) — Add tank-car makers to the list of U.S. industries bracing for the effects from the plunge in crude prices.While 2014’s record orders, including an all-time high 42,900 in the third quarter, will drive deliveries this year, according to Susquehanna International Group, manufacturers from Carl Icahn’s American Railcar Industries Inc. to Warren Buffett’s Union Tank Car Co. are facing a decline. New bookings in 2015 may plunge 70 percent, Macquarie Capital USA Inc. said, putting earnings at risk when scheduled deliveries drop in 2016.
Oil prices down 49 percent since June have crimped investment in U.S. fields including the Bakken range, where horizontal drilling and hydraulic fracturing is more expensive than conventional oil drilling. That has hurt industries from steel to heavy equipment. It also has slowed the boom in oil-by-rail shipping, which along with new federal safety rules, had fueled the record orders.
“The confidence of the industry has been shaken quite seriously,” Cleo Zagrean, a New York-based analyst for Macquarie Capital said by phone Jan. 15.
Tank-car maker stocks have suffered amid the oil price decline, with shares of Trinity Industries Inc. dropping 40 percent in the fourth quarter, according to data compiled by Bloomberg. American Railcar shares fell 30 percent and Greenbrier Cos. dropped 27 percent.
“It’s having an impact already,” said Art Hatfield, a managing director of equity research at Raymond James & Associates Inc. in Memphis, Tennessee. “I think the forward-looking minds are realizing that we may have hit a cyclical peak within the industry.”
New freight-car orders fell to 37,431 in the fourth quarter, down 13 percent from record highs, according to data from the Railway Supply Institute, reported Thursday. Leasing company GATX Corp.’s deal with Trinity added 8,950 new car orders in the fourth quarter. Those cars will be delivered over a four-year period beginning March 2016.
Backlogs swelled to a record 142,837 orders the Washington-based RSI said. These may bolster the industry through 2015.
Throughout last year, buyers piled on requests for cars amid an oil boom in North Dakota and Texas. Freight-car bookings and backlogs swelled to record highs even as West Texas Intermediate crude oil prices fell 14 percent between July and the end of September, according to data compiled by Bloomberg.
Orders for cars that carry cement and frac sand, a resource instrumental in the U.S. shale boom, declined in the fourth quarter from a record, according to Bascome Majors, an Atlanta-based transportation and rail-equipment analyst for Susquehanna International. Falling oil prices might temper future demand for frac-sand cars, he said.
Oil prices tumbled 18 percent in November and 19 percent the next month, ending the year with the steepest monthly loss in six years, data compiled by Bloomberg show.
“The oil price drop is a significant hit” to the tank-car industry, Macquarie’s Zagrean said. As customers re-evaluate the cost of new cars, even extensions on orders can weaken manufacturers’ earnings, she said.
Freight-car producer Greenbrier has dodged order cancellations as oil prices fell. Only one customer approached the company about canceling an order but has yet to call the deal off, William Furman, chief executive officer, said in a conference call Jan. 7.
Trinity had not seen any “appreciable impact” on its business from the low oil prices in the third quarter, Stephen Menzies, group president of the company’s rail and railcar leasing group, said in an earnings call October 29. The company stands by those comments, spokesman Jack Todd said in a Jan. 21 e-mail.
Union Tank Car spokesman Bruce Winslow declined to comment on the company’s orders. GATX’s director of investor relations Jennifer Van Aken didn’t return phone calls seeking comment.
In addition to concerns that low oil prices will threaten demand, the industry faces new regulations spurred by accidents including the July 2013 derailment and explosion in Lac-Megantic, Quebec, that killed 47 people.
The U.S. Pipeline and Hazardous Materials Administration plans to issue rules to phase out older rail cars that carry crude in the coming month, Susan Lagana, a PHMSA spokeswoman, wrote in an e-mailed statement Jan. 15. The type of tank car most implicated in spills, known as the DOT-111, would be phased out or rebuilt to meet the new standards within two years for the most volatile crude oil, according to the proposal.
New rules may create “quite a lot of replacement demand,” Greenbrier CEO Furman said in the earnings call. Currently, the Lake Oswego, Oregon-based company’s tank-car orders comprise just slightly more than a quarter of its backlog, according to company spokesman Jack Isselmann.
Owners are expected to scrap more than a fifth of an estimated 117,000 tankers that would require modifications. The work, which may include adding full height steel shields at the ends and adding a metal jacket around the body, is estimated to cost between $27,000 and $46,700 per car, an RSI study said.
BNSF Railway Co., which like Union Tank Car is owned by Buffett’s Berkshire Hathaway Inc., delayed an order of 5,000 new and safer oil-tank cars until the new safety standards are set. The railroad said last year that it would buy the new cars because of safety concerns even though railroads typically don’t own the cars that their locomotives haul on the track.
Many of the orders for safer tank cars might already be included in the backlog as buyers line up in anticipation, Hatfield of Raymond James said.
“This industry has really earned a lot of money in the last few years due to this tank-car boom and when that goes away, it’s going to have an impact on peoples’ businesses,” he said.
Repost from KPLU 88.5, Seattle WA [Editor: Does this sound familiar? …EXACTLY the same story here in Benicia. Significant quote: “Skagit County has extended the public comment period on the proposal and is accepting written testimony via its website through Feb. 5.” – RS]
Proposed Oil-By-Rail Expansion At Shell’s Anacortes Refinery Drawing Crowds
The company says it needs to be able to receive Bakken crude by rail to remain competitive.
Declining oil production in Alaska means more is coming from the American Midwest — by train instead of by boat.
And Tom Rizzo, general manager of Shell’s Puget Sound refinery in Anacortes, says his is now the only one in the Northwest that can’t take in crude by rail.
“The other four refineries all have these rail facilities and currently have the capability of bringing in Bakken crude,” Rizzo said. “So, having a rail facility at our site similar to what they all have at their sites is important to our long-term competitive position.”
He says the proposal to receive about one train a day of crude — or about 60,000 barrels — would not increase their production overall. Skagit County decided in April that the change wasn’t significant enough to require an environmental impact statement. After public outcry, the county added a series of conditions.
But Kristin Boyles, an attorney with Earthjustice, says that’s not enough. She filed an appeal with the county on behalf of several local community groups. The mile-long trains would cross Washington and head up the Interstate 5 corridor before passing through Mount Vernon and Burlington to get to Puget Sound. She says the entire area is exposed to the potential for train derailments and devastating fires, like the one in Quebec that killed 47 people.
“Washington is at the receiving end — and not in a good way — of a huge increase in fossil fuel transportation by rail. And if your town is on the rail line, you are staring at really monumental risks and impacts,” Boyle said.
According to permitting documents filed by Shell, the Anacortes proposal will move more than a million cubic yards of dirt and cost about a hundred million dollars, for the oil train terminal construction alone.
“And then factor on top of that public health risks, risks to marine life if there was a spill, risks to water quality and then ultimately the greenhouse gas emissions,” Boyle said. “It is certainly a project that demands full review.”
Nationally, Shell has pledged to use only modern rail cars and says the most explosive additives in Bakken crude are being phased out.
Locally, Rizzo says Shell will comply with whatever authorities decide. He says the company has worked on the permit for two years to ensure good outcomes.
“We have designed this facility with the highest standards of safety and environmental protection in mind,” Rizzo said.
For example, he says they worked with the Swinomish Tribe and other local agencies to add fish-friendly culverts to an area where the main rail tracks enter Shell’s property near I-5. He says this will allow juvenile salmon to migrate from Fidalgo Bay into nearby waterways, in an area where they are currently blocked.
The refinery provides jobs for about 750 people. A group that formed to support plans for a coal terminal in Bellingham, The Northwest Jobs Alliance, submitted a letter supporting Shell’s oil train proposal. It says requiring a full EIS every time there is a change to an existing operation is unreasonable and comes from people seeking to deindustrialize the economy.
Skagit County has extended the public comment period on the proposal and is accepting written testimony via its website through Feb. 5.