Monthly Archives: September 2016

Benicia City Council, Benicia city staff, Benicia Planning Commission, Crude By Rail, Local land use authority, Local Regulation, Valero Benicia Refinery, Valero Crude By Rail

Benicia City Council: Sept. 20 agenda & attachments

By Roger Straw, September 15, 2016
Note: Find a full listing of links to the staff report and attachments below, and my summary and analysis here: “City staff again recommends approval of Valero oil trains – Council to vote on Tues, Sept 20.”  – RS

Yesterday, the City of Benicia released its agenda for the upcoming City Council meeting, including materials related to the continuation of Council discussions on Valero Crude By Rail.  See Item 15.A. on page 7.

Next Tuesday, our City Council can take a FINAL vote on Valero’s dirty and dangerous oil train proposal.

The report by Community Development Director Christina Ratcliffe gives City Council members four alternative courses of action and supplies every document needed to accomplish each alternative:

    1. Deny Valero’s appeal of the Planning Commission’s unanimous decision – thereby denying the project and stopping crude by rail in Benicia.
    2. Uphold Valero’s appeal and approve oil trains in Benicia.
    3. Send the Environmental Impact Report (EIR) back to City staff for yet another go-round.
    4. Take no action until after the federal Surface Transportation Board weighs in.

The agenda includes the staff report and 10 attachments, as follows:

  1. Draft Resolution FEIR
  2. Exhibit A-1 Statement of Overriding Considerations
  3. Exhibit B MMRP (Mitigation Monitoring and Reporting Program)
  4. Draft Resolution Use Permit , Project Approval
  5. Draft Resolution Use Permit, Project Denial
  6. Valero Submittal – Clarifiation and Rebuttal Cuffel 091316 (Rebuttal of Dr. Phyllis Fox’ expert analysis)
  7. Valero Benicia Sulfur Springs Setback Evaluation Memo (Note this is a huge PDF file, which may appear blank on your screen, displaying content off to the right.)
  8. Hogin Memo STB Process (Previously submitted 4/8/16)
  9. Valero’s Petition to STB for Declaratory Order FILED May 31, 2016
  10. City of Benicia STB Reply July 7, 2016

For a Benicia Independent analysis, see City staff again recommends approval of Valero oil trains – Council to vote on Tues, Sept 20.

Crude By Rail, Local Regulation, Oil trains, Public protest, Take Action

‘Raging Grannies’ arrested after oil train protest

Repost from KREM2, Spokane WA

‘Raging Grannies’ arrested after oil train protest

By Bre Clark, September 02, 2016 9:36 AM. PDT

SPOKANE, Wash. – Three grandmothers were charged for obstructing a train on Wednesday. The three are known as the “Raging Grannies.” They blocked BNSF train tracks in protest because they want Spokane to stop oil and coal trains from going through downtown.

The grandmothers said they tried to talk to city officials about fossil fuels and fracking but when that did not work, they decided to protest.

“Even one person can stop a train it’s very easy to stop a train,” Raging Grannie Deena Romoff said.

Romoff and the other two “Raging Grannies” wrote letters and tried to get the Spokane City Council to stop oil and coal trains from going through downtown but the measure failed.

“People are getting frustrated that our government is not doing anything, that the world isn’t doing anything,” she said.

Romoff and several others decided to take matters into their own hands.

“When you have one city along the track that says ‘you can’t come through here,’ what happens? It stops,” she said.

BNSF railway officials said the protest group stopped 11 trains, one was fully loaded with coal.

“Even for that short period of time it gives us that much more time on this planet in my looking at it,” Romoff said.

The “Grannies” said their time behind the bars will not be in vain. They said they are joining forces with other environmental protests across the country and will go out every day if they have to.

“You don’t have to get arrested,” Romoff said. “You can be out there. If you believe in having a life for your children and your grandchildren”

BNSF said this in a statement in regards to ordinance to stop oil train operations:

“There are a number of better options to promote safety, including collaboration with industry and federal regulators to further enhance safety. We stand ready to work with federal, state, and local leaders to continue to improve safety while maintaining the efficient flow of commerce to and from Spokane.”

Bakken Crude, Crude By Rail, Oil Industry, Pipeline transport

Fewer Bakken oil trains when major new pipeline is operational

Repost from the Chronicle Times, Cherokee, IA
[Editor: Significant quote: “Currently, almost 100% of the 944,000 barrels of crude oil produced daily from western North Dakota oil fields moves out over the U.S. railroad system.”  – RS]

Energy Transfer sells share of Bakken Pipeline

By Loren G. Flaugh, Wednesday, August 31, 2016
Rail shipments to lessen when pipeline operational

(Photo)According to an Energy Transfer Partners, L.P. (ETP) website, ETP and Sunoco Logistics Partners, L.P. announced they had signed an agreement to sell 36.75% of the Bakken Pipeline Project to MarEn Bakken Company, LLC. Marathon Petroleum Corporation and Canada based Enbridge Energy Partners, L.P. jointly own MarEn Bakken.

Marathon Petroleum and Enbridge paid $2 billion in cash for the minority share of the Dakota Access Pipeline (DAPL) and its sister pipeline, the Energy Transfer Crude Oil Pipeline (ETCOP).

The DAPL consists of approximately 1,172 miles of 30-inch diameter pipeline from western North Dakota’s Bakken oil production region to the petroleum storage hub at Patoka, Illinois. The ETCOP is roughly 700 miles of existing, 30-inch diameter pipeline already converted from carrying natural gas to carrying the light sweet Bakken Crude oil. That converted pipeline starts at Patoka and terminates at Nederland, Texas near Houston.

Energy Transfer said the sale to Marathon Petroleum and Enbidge is to close in the 3rd quarter of 2016 and it’s subject to certain closing conditions. ETP will receive $1.2 billion and Sunoco will receive $800 million in cash when closing is finalized.

Energy Transfer said they plan to use the proceeds from the cash sale to pay down debt and to help fund their current growth projects.

Energy Transfer/Sunoco will own 38.25% of the DAPL. MarEn will own 36.75% and Phillips 66 will continue to own the remaining 25%. Energy Transfer will continue to oversee the ongoing construction of the approximately $3.8 billion pipeline project. Once the pipeline becomes operational later this year, Sunoco will be responsible for day-to-day operations of the pipeline.

Energy Transfer will quickly initiate another open season process and solicit additional shippers on its common-carrier crude oil pipeline to increase the daily flow rate from the current design capacity of 450,000 barrels per day to just under 600,000 barrels per day. The tariffs that ETP will assess petroleum companies that ship oil on the pipeline will pay off construction costs and provide revenue for day-to-day operations

A large subsidiary of Marathon Petroleum has already committed to participate in this upcoming open season and will make a long-term commitment to ship a large volume of Bakken crude oil to the Patoka petroleum hub. Enbridge owns crude oil storage tanks at Patoka and existing pipelines that go in to and out of this vital petroleum transshipment hub.

When ETP proposed the DAPL back on June 25, 2014, the pipeline was designed for transporting 320,000 barrels of light sweet Bakken crude oil per day. Energy Transfer said that they would solicit additional shipper interest to increase the daily flow rate. Additionally, Energy Transfer said they were in discussions with Sunoco to seek their participation in a potentially significant equity partnership.

Then on September 22, 2014, Energy Transfer announced that they intended to initiate an Expansion Open Season to acquire additional crude oil transportation services on the DAPL. This Expansion Open Season was successful when additional shippers signed long-term commitments increasing the daily throughput to 450,000 barrels per day.

With the pending ETP open season in the coming weeks, this anticipated flow-rate increase of upwards of 570,000 barrels per day will result in the DAPL moving a substantial volume of the daily crude oil produced from western North Dakota’s Bakken/Three Forks petroleum production areas.

According to the North Dakota Bakken Daily Oil Production News website, the daily production level of Bakken crude oil stood at 994,727 barrels per day as of May 31, 2016. This is a small increase from the previous month. However, both production figures are down significantly from June 30, 2015 when the Bakken oil field was producing at the rate of 1,153,000 barrels per day. The Bakken oil fields had been yielding almost 1,200,000 barrels per day in 2014 when prices for crude oil were much higher than today.

The U. S. Energy Information Administration (EIA) recorded a price for crude oil at $105 per barrel in June of 2013. It was in July of 2014 when oil prices dropped below $100 per barrel. One year ago, in June of 2015, the EIA reported a price per barrel of around $60. Earlier this year, in February, the price per barrel plunged to just above $26 per barrel. Today’s price per barrel is around $40 and still expected to fall more.

The daily production rates for crude oil in the Bakken oil fields are rising and falling right along with the fluctuating prices for crude oil and will continue to due to the current over-supply of crude oil in the world oil markets.

Currently, almost 100% of the 944,000 barrels of crude oil produced daily from western North Dakota oil fields moves out over the U.S. railroad system. That is because there are no significant crude oil pipeline systems originating from the Bakken region currently available for moving this huge volume of light sweet crude oil into the broader U.S. pipeline distribution system.

Once the 600,000 barrel per day DAPL begins commercial operations later this year, it will be the first major pipeline to move Bakken crude oil. However, that still leaves about 400,000 barrels per day for railroad shipment. A 100-car Bakken crude oil unit train can carry about 3,000,000 gallons of oil.

According to North Dakota statistics, Burlington Northern & Santa Fe Railroad (BNSF) hauls out about 75% of the crude oil that leaves the Bakken region. Union Pacific and CSX Corporation are other rail carriers that move Bakken crude oil. Some Bakken crude oil goes north into Canada and is moved east or west to crude oil refineries located as far east as Nova Scotia.

The most recent crude oil unit train derailment happened on June 3, 2016 when a 96-car Union Pacific unit train carrying Bakken crude oil derailed while moving through the Columbia River Gorge near Mosier, Oregon. Fourteen of the tanker cars derailed, ruptured and caught fire. Approximately 42,000 gallons of crude oil spilled. A federal investigation revealed that broken bolts joining two rails caused the accident.

The Iowa Homeland Security and Emergency Management Department tracks how much Bakken crude oil moves through Iowa. According to figures from early 2015, BNSF moves Bakken crude oil through Iowa on one heavily used route through Lyon, Sioux and Plymouth Counties and into eastern Nebraska. Another heavily used BNSF route crosses southern Iowa. When daily North Dakota crude oil production rates peaked in 2014 and 2015, roughly 12 to 18 crude oil unit trains per week used the two BNSF routes.

The Association of American Railroads did a study of U. S. Rail Crude Oil Traffic in November of 2015. Their summary noted; U.S. crude oil production has risen sharply in recent years, with much of the increased output moving by rail. In 2008, U.S. Class I railroads originated 9,500 carloads of crude oil. In 2014, they originated 493,146 carloads, an increase of nearly 5,100 percent. Rail crude oil volumes in 2015 will be lower than in 2014. Additional pipelines will probably be built in the years ahead, but the competitive advantages railroads offer–including flexibility to serve disparate markets–could keep them in the crude oil transportation market long into the future.

Crude By Rail, Local Regulation, Public permitting, Public Safety, Valero Benicia Refinery, Valero Crude By Rail

Benician C. Bart Sullivan sends letter to Cal. Attorney General

By Roger Straw, September 2, 2016
[Editor:  This post originally appeared with an error that has since been corrected.  C. Bart Sullivan is not an attorney.  The error was our own, not that of Mr. Sullivan.  We apologize for our error.  – RS]

Local Benicia engineer C. Bart Sullivan petitions Attorney General Kamala Harris, points out serious flaws in Valero CBR design

On August 9, local Benicia engineer C. Bart Sullivan wrote the following letter asking for help from California Attorney General Kamala Harris.  Sullivan’s comments focus on the lack of adequate safety setbacks and potential catastrophic dangers within Valero’s facility and nearby facilities in the Benicia Industrial Park should the plan be approved.

This approach is highly significant, showing that even if federal law prevents the City of Benicia from denying a permit based on rail impacts (a highly disputed contention), there are nonetheless enough significant and serious flaws in Valero’s onsite engineering designs to allow the City to refuse the permit and deny the project.

Text of Mr. Sullivan’s letter follows.  Mr. Sullivan has allowed the Benicia Independent to reprint this letter with the understanding that it is “his personal opinion, informational only, and is not to be construed as legal advice.”

August 9, 2016

California Attorney General Kamala D. Harris
Office of the Attorney General
1300 “I” Street
Sacramento, CA 95814-2919

RE: Valero – Crude By Rail Project

Dear California Attorney General Harris:

Benicia needs your help. I am deeply concerned about the safety of the Valero Crude by Rail Project and the oral dismissal of your legal advice to the city of Benicia by the city contract attorney, Bradley R. Hogin, Esq.

Based on the fact that Valero is the largest private employer in Benicia, the city staff is in favor of the project, and due to the oral legal advice provided by Mr. Hogin implying the futility of any action by the city, from my perspective, it appears that Benicia City Council will vote to approve the project.

From my personal expertise as an engineer with refinery experience, and based on expert opinions of professional engineers who have reviewed the proposed project design, Valero’s proposed crude-by-rail project design is extremely dangerous. Specifically, the engineering design does not allow for sufficient safety setbacks (the distance between the rail cars and oil storage tanks, etc.) to mitigate the likelihood of a chain reaction explosion within the refinery. Thus, due to the massive explosive potential of each rail car and the close proximity of the rail cars to other explosive fuel sources, it is highly likely that an explosion of only one rail car within the refinery will escalate into larger explosions extending beyond Valero property and into the city of Benicia.

Therefore, because of the lack of safety setbacks and the number of proposed rail cars entering the facility on a daily basis, the likelihood of catastrophic explosions at the refinery in Benicia puts hundreds, if not thousands, of Benicia residents directly in harm’s way. Unfortunately, the city has no way to mitigate this terrible danger, let alone mitigate other safety and health issues such as additional health impacts from the predicted increase in local air pollution.

Valero has categorically asserted that Benicia City Council cannot look to these unmitigable health and safety issues to deny the project due to the law of federal preemption. Based on Valero’s assertion, I wanted to bring comments from Mr. Hogin and Mr. John Flynn, Esq., Valero’s attorney, to your attention.1

In his testimony to the Benicia City Council, Mr. Hogin,  advised that the city had no recourse under federal preemption to deny the project, summarily dismissed your letter of April 14, 2016, and did not provide the city with any legal advice on how to challenge the project under Constitutional law. For example, Mr. Hogin did not provide any legal advice concerning how the proposed project could be challenged under the 10th Amendment or the Dormant Commerce Clause (DCC) using the rational basis test for the legitimate noneconomic purpose of protecting the health and safety of Benicia residents.

For your convenience, the following are recorded oral statements by Mr. Hogin and Mr. Flynn. I am deeply troubled by these statements, which I consider to be biased legal advice given to the Benicia city council April 18, 2016.

During the Benicia City Council meeting, Monday April 18, 2016, Mr. Hogin stated:

“The Attorney General letter really missed the point. The issue here is whether a City can regulate rail impacts indirectly by imposing requirements on a shipper that address rail impacts, as opposed to impacts from the shipper’s facility, and the Attorney General opinion really doesn’t discuss that.

The Attorney General opinion only discusses cases where cities were addressing impacts from a transloading facility that was owned and operated by a private party.

In none of the cases where — that the Attorney General cites were any of the cities addressing rail impacts…”

Moreover, during the same Benicia City Council meeting, Mr. Flynn stated:

“As for the AG’s letter, I’m going to choose my words very carefully because I have a lot of respect for Kamala Harris and I have a lot of respect for her office, but that letter on the issue of preemption is dead wrong. Your attorney — the advice that you’ve been given by your attorney is exactly right. If you follow the advice that’s been given to you by Kamala Harris, you’ll be making a terrible mistake, a terrible legal error.

Somebody has suggested that Valero, because it’s a — it’s a refinery, doesn’t have any standing to ask for a Declaratory Order from the — from the Surface Transportation Board. That, also, is dead wrong.

You don’t have to be a railroad to get a Declaratory Order from the Surface Transportation Board, and that’s been proven on many occasions as a result of the fact that the Surface Transportation Board has, in fact, issued a number of declaratory orders as the result of requests made by nonrail carriers.

Valero is a shipper. A “shipper” is a term of art under federal law. So we do have standing to request that Declaratory Order.” (Emphasis added)

Even though Mr. Hogin briefly mentioned later in his discourse that the city could look to non-rail related impacts to deny the project, the above quoted transcript of the oral arguments do not reflect the serious and biased tone of the legal advice as orally presented to the Benicia City Council. Specifically, the oral presentation by Mr. Hogin implied that any legal recourse would be futile, and that the city of Benicia has no other option but to approve the project.

While the legal advice from both attorneys concerns me greatly, Mr. Hogin’s legal advice seems especially biased toward Valero’s position, and does not seem to be in the best interest of his client, the city of Benicia.

Thus, Mr. Hogin provided legal advice in a manner strongly advocating Valero’s position without formulating a defensible and well thought out argument for the case opposing Valero’s position for the city to consider.

Based on the above, I emphatically urge you and your staff to personally visit the city of Benicia to reiterate your position. I implore you to please help the city of Benicia realize that they have the power to protect their citizens, and without taking your advice they would be making a terrible legal error and would be breaching their duty to the people of Benicia and beyond.

Sincerely,

C. Bart Sullivan, E.E, J.D.

1 REPORTER’S TRANSCRIPT OF RECORDED PROCEEDINGS IN RE VALERO CRUDE BY RAIL PROJECT HEARING AND PUBLIC COMMENTS (http://www.ci.benicia.ca.us/vertical/sites/%7BF991A639-AAED-4E1A-9735-86EA195E2C8D%7D/uploads/City_Council_April_18_2016_Transcript.pdf)