Federal action seen as boost to local, state control over projects
By Brian Nearing, Thursday, September 29, 2016 10:03 pm
ALBANY > A federal ruling on a oil-by-rail facility in California could hand state and local officials in New York and across the country a powerful legal tool to oversee the projects, which have been controlled primarily by federal rules.
The federal Surface Transportation Board this month sided with officials in Benicia, a small city near San Francisco, in a dispute with an oil refining company over a proposed storage terminal for crude oil brought in by tanker trains. The Valero Refining Company had argued it was exempt from a city denial because it was functioning as a rail carrier, and governed by federal transportation rules — a legal concept called “preemption” — but the federal board rejected the claim.
“Valero is not a rail carrier, nor is it acting under the auspices of a rail carrier,” according to the federal decision. Critics of oil train traffic directed in recent years to two oil terminals at the Port of Albany hailed the ruling as a victory for more state and local control.
“This puts the state Department of Environmental Conservation in a very strong position to require the oil terminals to explain the full impacts of their operations,” said Chris Amato, an attorney for the not-for-profit environmental group Earthjustice.
This month, the DEC announced it was requiring one terminal operator, Global Partners, to answer additional environmental questions on its request to construct a crude oil heating terminal that could be used to process Canadian tar sands oil.
“Nothing in the opinion suggests that DEC’s current course of action with respect the Port of Albany should be altered,” a DEC statement said.
Critics of earlier DEC environmental approvals for the Global and Buckeye oil terminals have been urging the state to rescind its approvals, but the state had responded that such authority rested with the federal government, not the state.
Specifically, Beutler asked DOT to consider whether interspersing oil tank cars with non-volatile commodities might make them less likely to catch fire in the event of a derailment.
Beutler’s letter was largely prompted by a growing number of destructive derailments involving crude oil trains in recent years, the largest of which claimed the lives of 47 people in Lac-Mégantic, Quebec in July 2013.
Back in June, a Union Pacific Corp. train carrying crude oil derailed near Mosier, Ore., about 68 miles east of Portland, causing some of the tank cars to burst into flames and spill oil into an adjacent section of the Columbia River. That train was en route from Eastport, Idaho to Tacoma, Wash. carrying crude oil from the Bakken formation, which is more flammable and dangerous than other types of crude oil.
“Although far less catastrophic than it could have been, the [Mosier] derailment highlighted the need for strong safety measures to address shipments of volatile and hazardous commodities through the Columbia River Gorge – whether related, or unrelated to oil shipments,” Beutler wrote in the letter. “Subsequently, I am writing to request information on dispersing tank cars carrying oil, or other hazardous materials, with non-volatile products throughout trains.”
She asked DOT to consider whether continuous blocks of oil tank cars increases the risks of combustion, potential benefits of requiring disbursement of cars carrying flammable materials throughout a train, and possible effects on combustibility of use of newer DOT-117 tank cars.
In addition, Beutler asked if federal regulators have studied speed limits reduction for oil trains as a way to mitigate the risk of combustion.
Washington state lawmakers last month adopted new regulations surrounding the transportation of crude oil by rail and pipeline that officially take effect Oct. 1. Developed by the Washington Department of Ecology at the request of the legislature, Chapter 173-185 WAC, Oil Movement by Rail and Pipeline Notification, established reporting standards for facilities receiving crude oil transported by rail and pipeline, and for the department to share information with emergency responders, local governments, tribes and the public.
The rule changes, first introduced by DOT in May 2015 as required by the 2015 Fixing America’s Surface Transportation (FAST) Act, include an enhanced tank car standard and an “aggressive, risk-based” retrofitting schedule for older tank cars carrying crude oil and ethanol.
In addition, the rules require trains transporting large volumes of flammable liquids to use a new braking standard; employ new operational protocols such as routing requirements and speed restrictions; share information with local government agencies; and provide new sampling and testing requirements DOT said will “improve classification of energy products placed into transport.”
Originally sponsored by Sen. Heidi Heitkamp, D-N.D., the legislation establishes a public-private council of emergency responders, federal agencies and industry stakeholders tasked with reviewing current training methods and prescribing best practices for first responders to Congress. The council will be co-chaired by the Federal Emergency Management Agency (FEMA) and PHMSA. Rep. Ron Kind, D-Wis., has introduced a companion bill to the RESPONSE Act in the House of Representatives.
“Currently, oil trains are traveling along the Columbia River Gorge, and my focus is on ensuring federal regulations are making these shipments as safely as possible,” Beutler said in a statement. “Long lines of oil cars are becoming a more familiar sight in our region, and if breaking them up into smaller blocks will better protect our citizens, the Columbia River and nearby forests, we should put a federal standard in place – quickly.”
Ruling by Little-Known Federal Agency Paves Way for Communities to Say No to Oil-by-Rail
By Justin Mikulka, September 28, 2016 – 03:58
The community of Benicia, [California,] in the crosshairs of history, made one of those decisions that will make a difference for the country. They stood up and said the safety of our communities matters.”
That was Yolo County Supervisor Don Saylor talking to The Sacramento Bee about the vote by the Benicia City Council to deny a new oil-by-rail facility that oil company Valero was seeking.
But that vote would have been meaningless if not for a recent decision on September 20 by the Surface Transportation Board (STB) that gave Benicia the legal authority to have some say over what happens within its borders.
Created in 1996, the STB is a federal agency which serves as “an independent adjudicatory and economic-regulatory agency charged by Congress with resolving railroad rate and service disputes and reviewing proposed railroad mergers.”
The STB decision helped clear up some of the gray areas around the issue of “pre-emption,” in which railroads are not subject to any local or state authorities or laws because local and state laws are “pre-empted” by federal law.
In 2013 the STB ruled in favor of Norfolk Southern Railway Company, saying once again that federal pre-emption of state laws protected the rail company from lawsuits filed in the state of Virginia.
The basic idea of pre-emption is that for interstate commerce to work, the federal government needs to be the sole regulator of railroads.
As we have reported previously on DeSmog, pre-emption can effectively place rail companies above local law. This has led to developments such as the case of Grafton, Massachusetts, where the construction of the largest propane transloading facility in the state occurred without the need for local approval, construction permits, or even environmental review.
Regarding the Grafton facility, the New England Center for Investigative Reporting wrote that, “Residents were dumbfounded: The location was in the middle of a residential neighborhood, less than 2,000 feet from an elementary school and atop the town’s water supply.”
This above-the-law approach has served rail companies well. And until the recent STB decision, it also appeared to protect oil companies who were moving oil by rail.
But this latest decision about Benicia appears to deliver a real blow to oil companies when it comes to oil-by-rail transfer facilities. Since the companies who receive the oil from the rail cars aren’t railroads, the STB ruled that they are not protected by federal pre-emption. In the decision the STB refers to Valero as a “a noncarrier” which is why the STB ruled they are not able to claim pre-emption.
This allowed Benicia to say no to an oil-by-rail facility in their community. And it has also changed the discussion about this industry as a whole.
San Luis Obispo County, California, has now delayed further the decision about a new oil-by-rail facility in order to consider the latest STB ruling.
Ethan Buckner was one of the organizers for environmental advocacy group Stand, which was working to stop the Benicia facility.
“This is a victory for the right of communities to say no to refineries’ dangerous oil train projects. The federal government has said once and for all that there is nothing in federal law that prevents cities from denying these oil companies’ dangerous rail projects,” Buckner said. “The oil industry keeps telling communities they have no right to say no to oil trains, but this ruling once and for all refutes this.”
“We’re pleased with the decision and the implications it will have across the country,” said Prange. “This issue is live in a number of sites across the country. This is definitely a decision that I think cities in other states will be looking to.”
They are definitely paying attention in San Luis Obispo County, as well as in Albany, New York.
Albany is the largest oil-by-rail hub on the East Coast.
Opponents of its oil trains recently had cause for celebration. On September 16, the state’s Department of Environmental Conservation announced that the two companies operating oil-by-rail facilities at the Port of Albany would now be required to undergo full environmental reviews before the agency would renew the companies’ permits.
Chris Amato is a lawyer for Earthjustice who has been working on this issue for years. He believes the STB decision supports what Earthjustice has been saying all along about Global Companies, which owns one of Albany’s oil-by-rail facilities.
“The decision by the Surface Transportation Board confirms what we have been saying since 2014: that Global’s claim that state regulation of their operations is pre-empted by federal railroad law is simply wrong,” Amato explained to DeSmog. “Global can no longer attempt to shield their operations from scrutiny under their flawed legal theory.”
Opponents of the Albany oil-by-rail operations have been asking the state to step in for years, but the state has also hidden behind the issue of federal pre-emption. In 2014 the Albany Times Unionreported that “Gov. Andrew Cuomo has been deflecting calls for the state to block the trains, saying rail transportation is controlled by the federal government, not the state.”
It would appear that the STB ruling negates New York’s current position and offers an option for the state to have authority over oil-by-rail facilities in Albany.
While the amount of oil moving by rail is roughly half of what it was two years ago, that is mostly due to the current low price of oil. And it hasn’t stopped oil companies’ continued efforts to build out more oil-by-rail infrastructure.
Meanwhile, oil trains continue to derail and explode, as happened in Mosier, Oregon, in June, and opposition to the oil-by-rail industry continues to grow.
This STB decision appears to be a game-changer in the oil-by-rail story. With it, perhaps now more politicians will agree that “the safety of our communities matter” — much more so than oil company profits.