KQED NEWS: Oil Trains Face Tough Haul in California

Repost from KQED News – The California Report

Oil Trains Face Tough Haul in California

By Julie Small, February 6, 2016
A train carrying crude oil operated by BNSF railway in California. (Jake Miille/Jake Miille Photography)

A statewide conflict over whether to allow more trains carrying crude oil into California is coming to a head in communities hundreds of miles apart.

The Central Coast town of San Luis Obispo and the Bay Area city of Benicia are poised to make decisions in the coming days that would have broad implications for the future of this type of import.

Longtime San Luis Obispo resident Heidi Harmon hopes to stop trains from hauling crude through her town, citing what she calls an “elevated risk of derailment.”

Oil trains would likely have to cross a 19th century bridge just a mile from the city’s thriving downtown.

“You can see the antiquated style with which this was put together” says Harmon, gesturing to rail tracks perched on top of the trestle’s steel rods.

She describes Stenner Creek Trestle as “stunning to look at but terrifying to consider a mile-and-a-half-long oil train coming over.”

Trains hauling up to 80 tanker cars could cross the trestle bridge multiple times a week if Phillips 66 gets wins approval for a plan to build a rail spur at its nearby refinery.

The company has applied for a permit to connect its Santa Maria refinery to the nearby Union Pacific line.

A steady decline in California oil production has compelled Phillips 66 to look for ways to bring in crude from other states. The company’s landlocked refinery in Santa Maria has no pipeline connection to do that — and no nearby port terminal.

The San Luis Obispo Planning Commission held hearings that began Thursday on whether to allow the rail spur project. County staff has advised against it, saying it poses too great a risk to public health and safety.

Harmon and hundreds of other opponents packed the meeting.

San Luis Obispo resident Heidi Harmon describes Stenner Creek Trestle as “stunning to look at but terrifying to consider a mile-and-a-half long oil train coming over.”
San Luis Obispo resident Heidi Harmon describes Stenner Creek Trestle as ‘stunning to look at but terrifying to consider a mile-and-a-half-long oil train coming over.’ (Julie Small/KQED)

“We have an opportunity in San Luis Obispo to say we do not want this train” said Harmon. “We do not want the dangers — the air pollution hazards and the increased cancer risks — we do not want this in our community.”

A series of accidents, including the 2013 Lac-Mégantic rail disaster that killed 47 people in Quebec, have fueled fears and community opposition.

Phillips 66 officials declined an interview for this story but said in an email the company uses “one of the most modern railcar fleets in the industry.”

Over 100 government agencies and school boards, including many from the San Francisco Bay Area, also oppose the rail spur in San Luis Obispo.

A similar project at the Valero refinery in Benicia also faces strong opposition.

Valero also wants to connect its operations to Union Pacific.

Benicia’s planning commission has set a public hearing on that crude-by-rail project Monday. Staff there is recommending approval.

Political leadership is divided, but many residents are opposed. Some of those municipal governments of nearby cities want more safeguards included in the project. To get to Benicia, the crude would first pass through communities far north, including Auburn, Sacramento and the university town of Davis.

“The rail line passes through the heart of our downtown and has a few geographic elements to it that raise concerns when oil trains are going through it,” said Mike Webb, city planner for Davis.

“We are not trying to stop the project,” Webb emphasized. “Our primary mission is to ensure that, to the extent that these trains and these materials are going through our communities, let’s make it as safe as it can possibly be.”

Davis officials and the Sacramento Area Council of Governments (SACOG) are pushing for a commitment from Valero and UP to use technology that automatically slows trains in densely populated areas.

“Public safety and first responder advance notification is of paramount concern,” said Yolo County Supervisor Don Saylor, a former council chair.

Officials also want a commitment to provide more training and funding for first responders in communities along the route and for emergency crews to get warned before an oil train comes down the line.

Chris Howe, a manager for Valero, testified at a public hearing last year on the Benicia oil-by-rail project that the company is committed to strong safety standards and modern technology.

“We have from the start planned to utilize in our project upgraded railcars.” Howe said.

Valero is also working with an experienced railroad.

San Antonio-based Valero Corp. is the nation's biggest refiner. The Benicia refinery is one of two the company operates in California.
San Antonio-based Valero Corp. is the nation’s biggest refiner. The Benicia refinery is one of two the company operates in California. (Craig Miller/KQED)

“We expect UP railroad — which is the prime railroad that we’ll be utilizing to move those trains — to do so safely,” Howe said. “Many of the incidents that have happened have occurred on much smaller, less well maintained railroads.”

Union Pacific says it has made changes to reduce the risk of hauling crude: implementing slower speeds in high-population areas and creating analytical tools to find the safest routes.

The two projects under consideration are among a handful of crude-by-rail projects proposed in recent years to take advantage of inexpensive crude from North Dakota, Canada and Texas.

But the recent plunge in oil prices has made hauling it by train more expensive, causing some of those plans to unravel.

“The rail economics have changed the calculus for some companies” said Gordon Schremp, a senior fuel analyst with the California Energy Commission.

Last year WesPac abandoned a plan to build a rail terminal in the Bay Area town of Pittsburg, citing a lack of investors for the project. Alon USA has yet to act on a permit the company acquired in 2012 to build a crude-by-rail terminal at an idle refinery in Bakersfield.

According to Schremp, even at the peak of industry interest rail imports comprised just 1 percent of California’s oil imports. By the end of 2015, those imports plummeted to one-tenth of 1 percent.

“Crude-by-rail was never a very important source supply,” said Schremp, “because we did not have the facilities constructed.”

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