Phillips 66 Seeks to Increase Number of Oil Tankers on San Francisco Bay

Repost from Earth Island Journal

Proposal could pose risk to local communities and wildlife

A version of this story originally appeared on the Baykeeper website.

The oil company Phillips 66 wants to increase the number of tanker ships carrying crude oil across San Francisco Bay to its refinery in Rodeo — from 59 to 135 tankers per year. They have also proposed increasing the average amount of oil unloaded at Rodeo from 51,000 barrels to 130,000 barrels a day.

oil tanker in san francisco bay
Photo by Jill/Blue Moonbeam StudioAn oil tanker crosses under the Golden Gate Bridge. Phillips 66 has submitted a proposal to increase the number of oil takers that can carry oil to its bay-side refinery by more than two-fold.

More than doubling the number of oil tankers would increase the risk of oil spills in the Bay. Oil spilled in the water can kill birds and other wildlife, make the Bay unsafe for recreation, and contaminate local beaches.

Plus, the company’s proposal raises other concerns. The increased tanker traffic would likely carry dirty, heavy tar sands oil from Canada. This type of oil is difficult, if not impossible, to remove after a spill.

In 2010, when tar sands oil spilled into Michigan’s Kalamazoo River, response crews were unable to completely remove the oil from the riverbed, even after five years of expensive cleanup efforts. If tar sands oil spilled in San Francisco Bay, it could harm wildlife in the water nearby and smother bottom-dwelling creatures that are critical to the Bay’s food chain.

The Phillips 66 refinery already has a poor track record of oil spills. In September 2016, oil was spilled there during the unloading of a tanker ship, causing large oil slicks in the northern San Francisco Bay. Over 100 residents near the refinery sought treatment at hospital emergency rooms for exposure to fumes that were later linked to the oil spill.

And then again, in September of this year, a small spill at the Phillips 66 refinery wharf left a 20 foot by 20 foot oil sheen on the Bay’s water. The impacts of small spills like this can accumulate and harm the overall health and resilience of the Bay and its wildlife.

Phillips’ needs a modified permit from the Bay Area Air Quality District to proceed with the expansion, and the district is beginning work on an environmental impact report for the proposal. Following that process, the board of directors will vote on whether to proceed.

In communities near the refinery, public opposition to Phillips’ expansion proposal is building. Baykeeper, a nonprofit advocating for the health of the Bay ecosystem, is working alongside community and environmental organizations to oppose any increase of oil tankers on San Francisco Bay. So far, over 24,000 Bay Area residents have responded to action alerts and told responsible agencies to reject the proposal.

A similar coalition effort succeeded in stopping two previous proposals for expansion of Bay Area oil refining. Along with partner organizations and many concerned community members, Baykeeper stopped Valero Energy Corporation’s attempt to expand its rail yard and bring more oil by train to its Benicia refinery. That proposal would have led to a risk of oil spills and possible accidents along the Bay shoreline and in communities near railroad tracks. Our coalition also stopped a planned crude oil storage facility that was proposed by the energy infrastructure corporation WesPac for Pittsburg.

Whether we live close to or far from a refinery, every Bay Area resident has a stake in the number of tankers carrying crude oil across the Bay. Our communities and many local businesses rely on a healthy Bay. And for wildlife that depends on the Bay, it’s a matter of life and death. By saying no to the risk of more oil spills on San Francisco Bay, we can make sure this place we call home is protected for future generations.

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Zoning Out Fossil Fuels: Local Action for A Better Future

Repost from STAND.earth  (See far below for webcast)

#ClimateIsLocal

Every environmental attack by the Trump Administration further emphasizes the importance of taking local action on climate. Climate inaction at the federal level isn’t new–and neither is real success on climate action at the local level.
 
Hidden by the barrage of bad news stories about hurricanes, wildfires, and international climate agreements, are dozens of good news stories about frontline communities defeating dirty fuel projects and municipalities leading the way on zoning out new fossil fuel infrastructure. 
 
Towns and counties have local land use powers that allow them to change regulations to prevent the siting of new fossil fuel infrastructure. Around the US, activists and NGOs have been working with these city and county governments to effectively “zone out” the ability to permit new dirty fuel projects. 
 
A few of the examples:

  • In Whatcom County, Washington, the County Council will hold a public hearing on 9/26/17 and vote to pass an extension of the moratorium on accepting applications for new infrastructure that could be used for unrefined fossil fuel export. This will eventually become codified in the county’s land use policy.
  • In Milwaukee, Wisconsin, the board of Harbor Commissioners and Public Works department, operating under the City of Milwaukee, amended a lease to not allow US Oil to “receive, handle, store, ship or otherwise process or distribute crude oil” at the port.
  • In Tacoma, Washington, a permitting freeze similar to Whatcom’s is close to passage, with plans to alter the port’s industrial zoning to prevent new dirty fuel projects.
  • In Portland, Oregon, an ordinance was passed to prevent the siting of bulk crude storage in the city. The legal challenge from industry is winding through the courts, but the ordinance has a good chance of being upheld.

If implemented broadly, passing municipal land use ordinances can prevent the growth of the fossil fuel economy, and be a critical element in fighting global warming, regardless of what the Trump Administration tries to do.

We hosted a recent webcast with activists from the efforts in Whatcom County, WA and Portland, OR.

Want the local resources mentioned in the webcast? STAND.earth has got you covered. Click here.

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Crude oil by rail or pipeline? New studies explore the question

Repost from Midwest Energy News 
[Editor: You may be tempted to quit reading at “But if one assumes oil will be extracted and refined for the foreseeable future…”  But the article gets really interesting after that.  Keep going!…  – RS]

Crude oil by rail or pipeline? New studies explore the question

By Kari Lydersen, September 28, 2017
An oil train passes through the Pilsen neighborhood of Chicago in 2015. | PHOTO BY Kari Lydersen / Midwest Energy News

Recent years have seen massive standoffs over oil pipeline construction and smaller but persistent protests against the transport of oil by train, or what opponents call “bomb trains.”

Protesters often highlight the catastrophic risks if pipelines rupture near aquifers or sacred lands, or if trains derail in cities. And many argue that oil should not be extracted at all, especially through fracking tight shale deposits or mining viscous tar sands.

But if one assumes oil will be extracted and refined for the foreseeable future, two new studies offer insight into the economics, health impacts and risks of pipelines versus crude oil by rail, or CBR.

Transporting oil by rail is often viewed as a stopgap measure until more pipelines are built. But in a paper published this month, public policy professor Ryan Kellogg and business professor Thomas Covert at the Energy Policy Institute at the University of Chicago found that CBR actually plays a crucial role in the oil economy, similar to the role that peaker plants play in our country’s electric system.

That is, CBR is a flexible way to get oil to and from different locations on relatively short notice, responding to market demands.

Pipelines are regulated by the federal government in a way similar to utilities in regulated states, Kellogg notes, meaning that the government oversees their pricing structure and they cannot earn more than a certain rate of return. Oil shippers also enter into long-term contracts with pipeline companies, meaning they have to speculate about future oil prices and demand.

Shipping oil by rail can be more financially attractive for everyone involved since it does not require long-term contracts, there is no regulated rate of return for railroad companies and rail offers more options for where oil is picked up and delivered.

“Putting aside the environmental issues, pipeline and rail work well when paired together,” Kellogg said. “Think of pipelines — once you have the upfront investment done, they are a very low-cost, very reliable way of moving oil from point A to point B. What rail is very good at is responding to conditions as the oil market changes. When the oil market says, ‘Hey there’s a bunch of oil coming out of location C,’ rail is relatively easy to ramp up and get going, or ramp down if there’s a market downturn.”

Hidden health impacts

But shipping oil by rail has serious public health impacts, according to a study by Karen Clay, professor of economics and public policy at Carnegie Mellon University. And she’s not talking about the risk of derailments.

In a paper released this month, Clay quantified the air pollution and greenhouse gas cost of diesel emissions from oil trains going from North Dakota in 2014, when production was high and about half of Bakken oil was shipped by rail. She found that the air emission costs of CBR were twice the cost of oil train accidents. While accidents like the Lac Megantic tragedy generate massive attention and fear, they are relatively rare, whereas the emissions from oil trains impact scores of people who live in urban areas like Chicago and Clay’s home, Pittsburgh.

“The relative magnitudes are really different,” Clay said. “Certainly if a crude oil train blew up in Chicago, it could do billions worth of damage. Air pollution happens every day, it seems kind of invisible, people think it’s not that important, but it is important. It’s about the difference between actual risk and perception of risk — humans are very bad at assessing risk.”

Clay found that the environmental and health costs of transporting oil by rail are double the cost by pipeline. And the air pollution and greenhouse gas emissions driven by pipelines also have a greater cost than pipeline spills and accidents — eight times greater.

She quantified the emissions from power plants needed to power the pumping stations along pipelines, calculating the health and other costs based on the fact that these power plants are typically located in sparsely populated areas, as opposed to the trains which pass through dense urban areas often including minority and low-income communities with environmental justice issues.

Economic levers

Kellogg wrote that the Dakota Access Pipeline would have likely been built to carry 29,000 to 74,000 more barrels of oil a day beyond its capacity of about 450,000, if CBR had not been available. In a pipeline with a fixed diameter, more oil can be shipped by adding more pumping stations along the route, or by “twinning” — adding parallel pipelines within the same right-of-way.

“When rail traffic was getting quite large, you saw the cost of shipping by rail go up,” Kellogg said. “The cost of logistics, renting out rail cars to hold the actual crude oil, those costs noticeably go up.”

Since pipelines deliver oil through long-term contracts, and the Federal Energy Regulatory Commission (FERC) caps the maximum rate a pipeline can charge, a pipeline can’t raise its rates when demand for its service is high.

“A pipeline can get congested during peak times so you can’t get any more oil through it, but the rate still can’t increase above that maximum regulated rate,” said Kellogg. “So the fact that pipelines can become congested creates the opening for rail to come in and help move the extra oil.”

Both Clay and Kellogg said that if the true cost of oil-by-rail was calculated into the fees that oil shippers are charged, the economics of oil transport might change. Kellogg’s paper predicted that baking the cost of railroad air emissions into shipping prices would raise CBR costs by $2 a barrel.

If shipping by rail got more expensive, there might be more demand for pipelines, and also alternate ways of moving oil. For example, shipping it by rail or pipeline to the Gulf of Mexico then by ship to the U.S.’s East Coast, rather than by rail cutting through the heartland.

Railroads are currently required to install cleaner diesel engines on new locomotives. Meanwhile, advocates have called for replacing older locomotives more rapidly and using electric locomotives in populated areas. Kellogg noted that railroad safety measures in the wake of Lac Megantic could also raise CBR shipping prices, and might shift more business to pipelines.

The future of crude-by-rail

Kellogg’s paper notes that between 2010 and 2014, oil shipments by rail grew from virtually nothing to 750,000 barrels a day, representing a tenth of total domestic oil production. This was largely because of spiking production in the Bakken shale.

Oil shipments by both pipeline and train have declined precipitously since oil prices starting dropping in 2014. But Clay said people should not stop thinking about the risks and economics of CBR even though they aren’t seeing as many oil trains. If oil prices rise and production ramps up, oil trains could proliferate once again.

Given that pipelines result in far fewer public health impacts than rail, Clay also advocates the possibility of shipping other petroleum-related compounds like butane, propane and ethanol by pipeline, rather than train.

“It’s just trying to get people engaged with the idea that this other stuff also has air pollution risk and accident risk,” Clay said. “Maybe the spill and accident risks are lower, but the air pollution risks are the same on a per ton basis over similar routes. This is a broader issue about anything that could be shipped by pipeline instead of rail.”

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For safe and healthy communities…