U.S. Senators urge stiff oversite and a “Safe Transportation of Energy Products Fund”

Repost from BringMeTheNews.com, Minneapolis, MN
[Editor: note the Minnesota “Traffic of Crude Oil” map at end of this story.  – RS]

Franken wants more oversight of crude oil shipped by rail

April 6, 2014 By Melanie Sommer

In the wake of recent accidents involving trains carrying crude oil from North Dakota’s Bakken oil fields, U.S. Sen. Al Franken is calling for more federal oversight of oil transport by rail.

Franken, D-Minnesota, and Sen. Heidi Heitkamp, D-N.D., sent a letter to the Senate Appropriations Committee — which takes a lead role in writing the federal budget each year — urging the creation of a Safe Transportation of Energy Products Fund.

The new program would look at ways to improve the safety of transporting crude oil by train and oil tankers, the Northland News Center reports. The fund would pay for more safety inspections, disaster response training, studies and community outreach, among other things.

The senators also are asking for funding to hire more inspectors.

Lawmakers on the federal and state levels stepped up their scrutiny of oil shipments by rail after a train carrying crude oil collided with another train near Casselton, N.D. in late December, causing an oil spill and a spectacular fire which required the town to evacuate.  Congressional committees held hearings on rail safety, and several bills increasing oversight of oil transportation are in committee in the Minnesota House.

The growth in rail transport of crude oil has increased dramatically in just the past few years, according to Franken’s office.  About 800,000 barrels of crude per day are shipped via rail, which is a 6,000 percent increase since 2007.

Experts are also concerned about the safety of Bakken crude, specifically. Federal officials issued a safety alert in January warning that the crude oil pumped in that region may be more flammable — and therefore, more dangerous — than other forms of oil.

This map, produced by Minnesota 2020, shows the rail routes that go through Minnesota carrying crude oil.

crude-oil-minnesota

    Virginians concerned about explosions, spills near Chesapeake Bay

    Repost from The Daily Press, Hampton Roads, Virginia

    Crude oil tanker trains to Yorktown ignite controversy

    Three derailments, explosions in U.S. and Canada in past six months highlight dangers

     April 05, 2014|By Tamara Dietrich, tdietrich@dailypress.com

    Virginia environmentalists and activists are worried that an uptick in tanker trains carrying petroleum crude oil to a new storage and shipping hub in Yorktown is a recipe for disaster.

    At issue is crude oil from the Bakken shale formation in North Dakota — the same crude that’s been implicated in derailments and explosions over the past several months from Quebec to Alabama, and is now being shipped by rail through heavily populated and environmentally sensitive areas of the commonwealth.

    “These trains are traveling through Lynchburg along the James River through Richmond and on to the York County facility on the York River,” said Glen Besa of the Virginia chapter of the Sierra Club. “We’re concerned that a train derailment could result in an explosion and the loss of life, or an oil spill that could jeopardize our drinking water supplies and the environment.”

    The group says tanker trains carrying Bakken crude began arriving in Yorktown in December, and is calling on the public and first-responders to be aware of the risks associated with those trains and ensure measures are in place to prevent accidents and, if necessary, effectively respond to them.

    Meanwhile, the Chesapeake Bay Foundation is calling on the commandant of the U.S. Coast Guard to take action to reduce the risk of a devastating spill in the vulnerable estuary as “dramatically” increasing amounts of crude oil are likely to roll into Yorktown in the coming years, then get barged out again to East Coast refineries.

    The bay is “on borrowed time in the face of a major oil spill,” CBF President William C. Baker said in a recent letter to Adm. Robert J. Papp Jr.

    Safety a priority

    The storage depot is the former Yorktown Refinery, a 600-acre facility that for decades converted crude oil into gasoline and other fuels. It closed in 2010 and cost the county one of its biggest industries and tax sources.

    Houston-based Plains All American Pipeline LP bought the facility for $220 million in 2011, and over the past two years spent $150 million to convert it to a transportation terminal, according to spokesman Brad Leone and news reports.

    “Plains made a significant investment to expand and modernize the existing rail and dock infrastructure, which has made the facility even safer and more efficient,” Leone said.

    The Yorktown Terminal supports 90 full-time jobs, he said, and has the capacity to unload 140,000 barrels a day and store 6 million barrels.

    CSX Transportation, based in Jacksonville, Fla., provides rail service to the terminal as part of its 23-state network.

    “CSX appreciates that the shipment of energy products is a topic of concern for citizens here in Virginia and across the country,” said spokeswoman Melanie Cost, adding that the company places the “highest priority” on community safety.

    Most of its crude oil shipments originate in the Bakken region, she said.

    The risk

    After three train derailments and explosions in six months involving crude from the Bakken Shale region, the federal Pipeline and Hazardous Materials Safety Administration issued a safety alert in January that this crude “may be more flammable” than other types of oil. The PHMSA is part of the U.S. Department of Transportation.

    Last July, an oil train carrying Bakken crude derailed and ignited a catastrophic explosion in Lac-Megantic, Quebec, killing 47 people, leveling the small town and causing more than $1 billion in damages.

    In November, a 90-car crude oil train was traveling through a rural part of Alabama when 20 cars derailed and 11 of them exploded. An unknown amount of crude fouled nearby wetlands, and damage was estimated at nearly $4 million.

    Then, in December, a crude-oil train collided with a derailed grain car in North Dakota. Of the 21 oil cars that derailed, 18 ruptured and exploded. About 400,000 gallons of crude were released into the environment, and 1,400 residents had to be evacuated. Damage was estimated at $8 million.

    In response, the DOT issued an amended emergency order last month directed at companies that offer petroleum crude oil and carry it by rail.

    The Bakken formation has become “a major source for oil production” in this country, the order noted, and the risk of flammability is compounded because crude oil is commonly shipped in bulk on large unit trains.

    The Congressional Research Service reported to Congress in February that shipping more crude oil on bigger trains increases the risk of accidents and the size of the resulting fires and explosions.

    The controversial Keystone Pipeline would service the Bakken formation, but it is unknown if that pipeline will ever be built. If large tanker trains are used instead, federal agencies project about 49 more injuries and six more deaths each year.

    Force a fix

    In its emergency order, the DOT requires that bulk quantities of crude oil be properly tested and classed, and be treated as a hazardous material when shipped in rail tank cars. It also forbids deliberate misclassification.

      Five myths about crude oil by rail

      Repost from TRAINS The Magazine of Railroading

      A lot of what you’ve been hearing is not true. It’s time to set the record straight

      COASTAL REFINERIES ARE FLOCKING TO OIL BY RAIL LIKE DROWNING MEN TO LIFE PRESERVERS.

      Fred W. Frailey, Trains Magazine, Feb2014, Vol. 74 Issue 2, p17

      Three years have passed since the village was rocked by the scandal, namely the remarriage, after half a century of divorce, of Mr. Big Rail and Ms. Crude Oil. People are still aghast. Who would have imagined these two would find each other attractive again? Yet a lot of loose tongues are still spreading gossip, and frankly, much of it is simply not true. To promote harmony in the village, your scribe this month wishes to set the record straight. Here are five commonly articulated myths that have no basis in fact.

      1. It’s just a fling and won’t last. The way oil is priced worldwide virtually guarantees this marriage will endure. The world oil price (Brent) in recent years has usually been $10 to $25 a barrel higher than the West Texas Intermediate (WTI) price for oil from the U.S. interior, and oil from new discoveries in North Dakota and Canada is further discounted from the WTI price. Follow me so far? Refineries on the west and east coasts are not reached by pipelines from the country’s oil-producing midsection, and had to pay the Brent price (or something close to it) to buy oil from overseas or Alaska’s North Slope. It was difficult for these refiners to compete and stay in business.

      Now these coastal refineries are flocking to oil by rail like drowning men to life preservers. If they can get oil $10 to $25 a barrel cheaper, they’re way ahead even after paying the railroads. Therefore, the east and west coasts, I maintain, will be the ultimate destination for much, if not most, of the oil coming from the Bakken shale formation in North Dakota and Saskatchewan. And the only way to get it there is by rail.

      2. The Keystone XL pipeline will disrupt the marriage. Not at all. TransCanada’s XL, according to the environmental impact statement, is supposed to bring up to 730,000 barrels a day of stuff from Canada (more about “stuff” in a minute) to refineries on the U.S. Gulf Coast, and pick up another 100,000 barrels of North Dakota oil as it passes through that state. But there are problems with the XL. First, it may never be approved by the U.S. government. Second, Gulf Coast refineries are being flooded by light sweet crude oil of the sort North Dakota produces. I concede that pipelines can get North Dakota crude to the Gulf cheaper than railroads, but question whether there will be much appetite for it. Third, the “stuff” from Canada is not well-suited to pipelines.

      3. Railroads cannot compete with pipelines head to head. In theory, that’s largely true. Between Point A and Point B, if there are no complicating hang-ups, pipe will underprice rail. Now, let’s talk about “stuff:’ The oil being extracted in northern Alberta, above Edmonton, is so heavy that you cannot do conventional drilling. Either you mine it and extract the oil from the sand, or you heat it underground and boil it out, so to speak. What you get is an oil called bitumen. Gulf Coast refiners are largely geared for this heavy oil – it’s a natural destination for this oil – but there’s a catch: Bitumen will not flow through a pipeline. Pipelines shippers have to buy condensate. transport it to northern Alberta, and then dilute the bitumen with it so that they end up pumping 72 percent bitumen and 28 percent condensate, or “stuff:’ So what goes through the pipe is 28 percent waste. At the other end, refiners have to remove the diluent. It’s a costly process. At least a couple of oil industry experts who have studied the economics of all this say bitumen can be shipped a lot cheaper by unit train, particularly if you use insulated tank cars with coils for steam injection to permit raw bitumen to be loaded and unloaded. Facilities that will do just that are being built or planned at both ends. The same experts say that even if you dilute the bitumen with 18 percent condensate to make it flow in and out of ordinary tank cars, unit trains are still the low-cost winner, although not by much.

      4. Crude oil doesn’t explode. That was the prevailing wisdom before a runaway, unmanned crude oil train piled up in Lac-Megantic, Quebec, in July, killing dozens. And in November an Alabama & Gulf Coast crude oil train derailed over a wooden trestle near Aliceville, Ala., and press reports state that three cars of crude exploded (while other derailed cars did not). Today, I suppose the popular belief is that crude oil is explosive. The truth is that both myths are untrue (or true, take your pick). The lighter the crude oil, the more likely it will be to contain explosive elements such as butane and benzene that may separate from the heavy components during transport. If released and ignited, an explosion may result, according to published safety data sheets. Both the Lac-Megantic and Aliceville accidents involved light sweet crude that originated in North Dakota. As for tar-like bitumen, you could probably hit it with a flamethrower with no explosive effects.

      5. The backlog of tank car orders is creating a bubble that will burst. That bit of village gossip had validity because after all, booms are followed by busts, and freight car manufacturers aren’t exempt. But after the Association of American Railroads in November got behind the idea of retrofitting (or reassigning or scrapping) 78,000 of the 92,001]. cars hauling flammable liquids such as ethanol and crude oil, it pretty much insured that the car builders will be turning out tank cars at their peak 24,000-a4 year rate for some time to come. That bust appears to be a long way off. ~

      Fred W. Frailey is a TRAINS special correspondent and blogs on www.TrainsMag.com.

        For safe and healthy communities…