All posts by Roger Straw

Editor, owner, publisher of The Benicia Independent

Benicia’s Stan Houston: a host of safety concerns – preserving Valero’s future and Benicia’s

Repost from The Benicia Herald

Crude by rail: An opportunity to lead

March 26, 2014 by Stan Houston

THE VALERO REFINERY WANTS TO BRING IN A NEW FORM OF CRUDE OIL to process in their refinery here in Benicia. Union Pacific Railroad will be the transporter. There is a host of safety concerns, not the least of which is the volatility of this newer crude. Should a mishap in transportation cause any one of the tank cars to rupture, the resulting explosion and fire could destroy Benicia. The gravity of this situation and my personal experiences in the railroad industry demand I convey my assessment and participate in a conversation that may lead to a solution that works for everyone.

I was only 3 1/2 years old but can still remember my first steam-locomotive trip. My parents and I stood patiently at Southern Pacific’s Oakland terminal and watched the oil-fired locomotive billow out steam while the engineer reset the brakes and moved the engine forward a bit. It seemed an eternity before the conductor waved to my parents and we were allowed to board my grandfather’s private car on Southern Pacific’s Daylight train to Portland, Ore.

Ten years later I would find myself packaging freight car lubricant after school for one of my dad’s railroad customers. In another 20 years, I celebrated having worked at every roundhouse and rail yard in the United States, Canada and Australia. By the age of 37, I was a highly regarded plastics engineer whose father’s company was leading the railroad industry in replacing metal bearings and components with high-tech plastic materials. In the 40-plus years I spent “working on the railroad,” I was an invited guest speaker to the Association of American Railroads, a frequent presenter at the Facility for Accelerated Service Testing in Pueblo, Colo., a board member and keynote speaker of the Locomotive Maintenance Officers Association, and a recipient of the first Quality Assurance Award from General Electric under then-CEO Jack Welch.

I cut my teeth in the industry at the Southern Pacific and Western Pacific railroads. I spent most of my early years visiting SP’s Sacramento Locomotive Works, where I’d oversee the testing and installation of our new products. The shops had been home to my grandfather when he was master mechanic there in the 1940s and ’50s. And, it didn’t hurt that Southern Pacific’s vice president of research and development was my godfather; I was given a lot of access to the railroad many others only dreamed of. As I grew into my late 20s, I’d venture to the Midwest to visit the Union Pacific or Burlington Northern railroads, or I’d go back east and call on the C&O and B&O (CSX), or the Southern Railway System. I travelled almost every other week for the next 20 years, helping redesign parts on freight cars and locomotives. It was a busy time in my life and very rewarding. I learned how the locomotives and the freight cars and rails work together. And, suffice it to say, I know the people who make those freight cars, and build those locomotives, and lay those rails.

During the last half of the 20th century, railroads shifted from carrying almost everything we consumers bought to what is today a streamlined mix of industrial and consumer goods. The railroads are extremely agile in producing freight cars that look like they are designed to handle very specific products when, in fact, their agility and mechanical engineering prowess — along with the help of their supply industry — can quickly adapt a standard freight car into a specific commodity freight car with little alteration to its structural integrity. It wasn’t long ago that, as seasonal demand of grain cars oscillated wildly during harvest in the Midwest, standard box cars (the kind you see the homeless pictured riding in) were overnight turned into grain cars by inserting a cardboard barricade in the door openings and cutting a grain chute hole in the top. Not very space-age technology, but it worked extremely well.

Today the railroads are being tasked with carrying increasing amounts of oil in tank cars. In their heightened and predictable response to demand, they have rebuilt and built new tank cars at an unprecedented rate, yet still they have fallen short of what the growing demand requires. Because there are no government regulations requiring a specific type of tank car modification or a specifically designed car to address the newer types of crude now being carried, the railroads are carrying the newer materials in standard tank cars, some of them well over 50 years old. These cars are what the industry refers to as the DOT-111 class cars. Even the very newest modification to the DOT-111 class, made in 2011, does not adequately address the volatile nature of some of the newer crudes when under impact through derailment or collision. In addition, there has been no investigation into developing a far safer delivery system that employs tank car transport. It has been well documented that as a result of a derailment and collision, the subsequent breach of a tank car would cause an explosion of the newer crudes and destroy Benicia as we know it.

The Valero refinery has asked Benicians for their support to be able to bring these newer crudes to their Benicia refinery. It is irresponsible to close our eyes and NIMBY our way out of this predicament. It is in our best interest to do everything we can to insure the profitability and volume of output from Valero, as they provide a significant amount of money to our General Fund and donate hundreds of thousands of dollars each year to needy Solano County enterprises. In fact, we should be encouraging Valero to make as much product as they can and working with them to facilitate an increase in their margins so that we reap sustainable benefits, too. Isn’t that what we already do for our other businesses? Isn’t that what tourism does for the First Street businesses and the Economic Development Board does for our other businesses? Shouldn’t we treat Valero the same as any other contributor to our welfare? Shouldn’t we insist that any threat to Valero’s ability to operate is hereby not acceptable?

In the absence of government mandates that would require a safer tank car or a safer delivery system for newer crude, it is up to Benicia to safeguard Valero’s cash flow to us so that our livelihoods continue. In our conversation with our benefactor, Valero, we must insist they deliver this message to the railroad industry: “This is not the time to fabricate a piece of cardboard and retrofit a boxcar. Rather, this is a time of great opportunity that will require the cooperation of the stakeholders of the Union Pacific Railroad and the tank car companies to look into the future and develop a brand new product and delivery system. Round up your best ME’s (mechanical engineers) and maintenance-of-way gurus and put together a delivery system that includes a modern, high-tech tank car with a robust safety factor and a delivery system that insures the continued operation of the Valero Refinery and the health and welfare of every township your system touches.

“And, until you can provide us with testing data that shows the newer car and newer delivery system is adequate, you can’t ship into Benicia anything that threatens the current cash flow of Valero funds to our stakeholders and the city of Benicia.”

Stan Houston lives and works in Benicia.

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    Valero admits plan for tar sands and Bakken crude

    Repost from Digital Journal

    Valero admits plans for East Bay refinery to burn tar sands oil

    By Nathan Salant, March 27, 2014

    VrefBenicia –  Valero Energy Corp. could use a new rail terminal it plans to build at its San Francisco Bay Area refinery to process highly flammable Bakken crude from Montana.

    Valero Energy Corp. could use a new rail terminal it plans to build at its San Francisco Bay Area refinery to process highly flammable Bakken crude from Montana.

    Valero conceded that possibility for the first time Monday at a community meeting called by the city-sponsored Valero Community Advisory Panel, according to San Francisco television station KPIX.

    “If Bakken crude is one of the crudes that’s available by rail, it’s possible that it could make its way to our plant,” Valero spokesman Chris Howe told KPIX reporter Christin Ayers at Monday’s meeting.

    Valero had previous said only that it wanted to begin bringing in crude oil by train to add to the resources available to its refinery in Benicia, Calif., on the shore of Suisun Bay.

    Valero’s Don Couffle also told KPIX that the refinery also could choose to bring in oil derived from Canadian tar sands, similar to the fuel that leveled a major part of a Canadian coastal town last year, killing 47 people.

    “Crude oil that’s derived from tar sands may be a candidate if it fits our profile,” Couffle said.

    The refinery already brings in more than 100,000 barrels of crude daily by ship and pipeline.

    Valero proposed the rail facility last year but the city, which must decide whether to allow it, required the company to prepare an extensive environmental impact report before it could be approved.

    In theory, the project still could be derailed it the report uncovers unanticipated negative environmental consequences.

    But Valero’s proposal has stirred up considerable outrage in the small, historic community, where project opponents have organized meetings of their own and threatened protests.

    Nearly 200 residents jammed Monday night’s meeting at a union hall less than a half-mile from the refinery.

    Several attendees spoke in favor of the rail project, which has been projected to add 20 permanent jobs to the refinery’s workforce and as many as 100 temporary jobs while the facilities are constructed.

    Company officials presented the project to the audience and then answered questions from attendees.

    Valero said shipments of up to 100 tanks cars filled with crude oil every day would not affect air quality, and that all safety standards would be met.

    The additional oil by rail would not increase refinery production, the company said, because it would merely replace crude currently brought by ship.

    “It would not increase crude delivery, just make it more flexible,” said John Hill, the refinery’s vice president and general manager.

    But many local residents and newly formed community groups complain that the rail shipments added an extra layer of danger to the community.

    Benicians for a Safe and Healthy Community said Canadian tar sands oil was more polluting than other crudes.

    “They’re just pushing through the project,” said the group’s Jan Cox-Golovich, a community activist and former city councilwoman.

    “Have some respect for the community,” she said.

    The draft environmental impact report is expected to be released next month, after which Valero plans to host another public meeting, KPIX said.

    Read more:  http://www.digitaljournal.com/news/environment/valero-admits-plans-for-east-bay-refinery-to-burn-tar-sands-oil/article/378559#ixzz2xHfNoysT

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      Marathon Petroleum questions volatility of Bakken crude, but much remains unknown

      Repost from

      New lab test shows Bakken crude may be less dangerous than earlier data suggest

      By Cezary Podkul NEW YORK  Feb 26, 2014

      Feb 26 (Reuters) – A study of a fresh sample of crude oil from the Bakken shale in North Dakota published this week showed sharply lower levels of volatile vapors compared to previous tests, potentially raising new questions about the danger of shipping it by rail.

      The latest data from Marathon Petroleum’s Capline Pipeline unit, which publishes so-called “assays” on the quality of over 100 types of crude on its website, showed a sharp fall in the oil’s vapor pressure, a common measure of a fuel’s ability to evaporate and give off combustible gases.

      While the data offers only a single snapshot of the properties for a batch of so-called “North Dakota Sweet”, a term for Bakken crude, it may raise more questions about the combustibility of the oil, which has been cited in several fiery derailments in recent months.

      The data emerges just as U.S. regulators impose new rules requiring more testing of Bakken crude for fear it is prone to explosion during accidents. Industry officials are appearing before a House committee in Washington on Wednesday to discuss the issue.

      Capline’s latest Bakken assay, dated 14 January, was posted on its website this week, shortly after a Wall Street Journal story on Monday used older Capline data to show Bakken crude carries more combustible gases than other varieties. While Bakken’s ultra-light properties are generally well known, hard data is rarely made public.

      Regulators are seeking more information on Bakken crude from oil shippers and are also conducting their own data collection and sampling. It is not clear when or if those results will be released.

      Capline’s newest test showed a vapor pressure reading of 5.94 pounds per square inch (psi). The reading compares with a psi of 8.75 for a test done in February 2013 and is nearly 4 pounds per square inch lower than the highest reading, 9.7 psi, recorded by Capline in December 2010. A higher psi reading generally indicates a liquid fuel is more prone to give off combustible gases.

      It was not clear why the rate had declined so sharply, or whether that decline is broadly reflective of the region as a whole. One expert who reviewed the data said the wide fluctuation appeared unusual, but not conclusive of any trend.

      “I would expect it to go up and down, it’s going to vary, but that’s a big drop,” Connie M. Hendrickson, chemist with Arkon Consultants in Dallas, Texas, told Reuters. “Without extra sampling and extra testing, we just don’t know.”

      A spokesman for Marathon declined to comment on the decrease, other than to say the firm has “a process in place to test crude oil for quality oversight purposes”. The samples are generally taken at the same spot on the pipeline, the spokesman said.

      It is not clear how much Bakken runs through the Capline, a 1.3 million barrels-per-day (bpd) pipeline running north from St. James, Louisiana, to Illinois. The Marathon spokesman declined to provide operating rates for the pipeline.

      To be sure, Capline’s latest data still show Bakken crude ranks higher in volatility than most other crudes, based on vapor pressure tests conducted by the company. At the 5.94 psi, for example, Capline’s latest Bakken sample still ranks more than double that of Light Louisiana Sweet crude, which tested at 2.38 psi in May 2013.

      Still, the wider range of readings and the infrequency of the testing suggests there remains much uncertainty about the quality of Bakken crude.

      Other data sets have suggested not only that the crude is light by its nature – Bakken reserves are rich in so-called “light ends” like butane, propane and other byproducts of petroleum – but that it is also growing lighter.

      Refiner Tesoro Corp. said in a 2013 presentation that its purchases of crude sourced from North Dakota’s Bakken region have increased in volatility, topping readings of 12 psi in 2013.

      Some lawmakers have asked for more data to aid regulatory efforts on this issue.

      “It is not in anyone’s best interest to knee-jerk a response without data,” North Dakota Senator Heidi Heitkamp said in an interview this week.

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