NPR reporter visits Davis, Benicia

Repost from NPR Marketplace:

Communities along rail lines worry about oil explosions

David McNew/Getty Images – A diesel tanker truck passes windmills along the 10 freeway on  near Banning, California.
by Sarah Gardner
February 6, 2014 – 10:29am
Ever lapsed into daydreaming while you sit at a railroad crossing, waiting for a long freight train to go by?

After a fatal oil train explosion in Quebec last summer killed 47 people and flattened a downtown, people aren’t daydreaming anymore. That disaster served as a wake-up call to a lot of communities living close to railroad tracks, who suddenly realized that was crude oil rolling by in tanker. As oil trains have had more accidents, and governments are examining the safety of rail oil shipments, some local residents are applying the brakes on what they see as a dangerous rush to move oil by train.

There are, however, powerful economic reasons why more oil is being shipped by rail, rather than through pipelines.


Reporter Sarah Gardner talked with Graham Brisben, CEO and founder, PLG Consulting, about moving oil by train:

Q: How much crude oil are we moving on trains?

A: It’s certainly growing. It’s up to about 400,000 carloads per year today. Although crude by rail gets a lot of attention — it’s a big focus in the media partly because it’s an area of growth for railroads, but also because there have been a number of high profile crude-by-rail accidents — the reality is it’s only 2 to 3 percent of total car loadings for the railroads.

Q: Why are they using trains to move oil to refineries?

A: Initially, when crude by rail got started, it occurred in the Bakken play in North Dakota. The initial idea was to use rail to get crude to market simply to bide the time until pipelines were built out with enough capacity. But once crude oil got going, the commodity traders and the exploration and production companies realized that rail gave them faster transit times, the ability to ramp up more quickly than pipelines, and the ability to take the crude oil to different destinations where a higher price could be received for those barrels.

Q: There’s not just one price?

A: No. Because crude oil trades at different prices at different places according to oil benchmarks (like West Texas Intermediate, Light Louisiana Sweet and Brent).

Q: Won’t crude by rail go away when more pipelines get built?

A: As the pipeline network gets built out in a north-south direction, the flow of crude from the Bakken in North Dakota will have more of a shift from rail back to pipeline. But going east-west, that business will persist. You’re simply not going to see a buildout of pipelines going east-west. It’s simply cost-prohibitive to go over the Rocky Mountains, for example.

Q: What about tar sands oil from Alberta, Canada?

A: That oil is coming to market both by pipeline and now, increasingly, by rail. First, it was the light, sweet crude out of the Bakken. Now, it’s heavy sour Canadian crude going to U.S. refineries.

Q: Who’s making money on all this?

A: Obviously this has been a bright spot for the railroads. And tank car builders and leasers have enjoyed some very flush returns. The other beneficiary has been commodity traders who take advantage of those price spreads. It’s also a good time to be in the refining business because of abundant domestic supply. They’re in a better position than they were five years ago.

Q: Federal regulators are moving to increase safety standards in light of recent accidents. Will those new regulations affect the economics of crude by rail?

A: Crude by rail is economically attractive enough to warrant the hard work it is going to take to improve safety. The measures that can be taken, in reality, aren’t all that difficult. We expect regulations on retrofitting tank cars with crude oil. Also it wouldn’t surprise me if there end up being routing guidelines away from population centers, along with the speed restrictions. And greater scrutiny of terminal operations.

Q: Railroads seem very old-fashioned somehow. Could we live without them?

A: Could we live? Yes. Could our economy survive without railroads? No.

Please share!

Update on Valero DEIR, Public Comments

The City of Benicia updated its Valero Crude by Rail web page today.  The Draft EIR, which missed its scheduled release in January, is now tentatively scheduled for release in March 2014.

In addition, the City posted Public Comments received through February 3, 2014.  Voices opposing Valero’s proposal have documented a great number of concerns and questions, all now a part of the public record.  Public comments can be studied on the City’s web page, or more easily in searchable PDF documents here on The Benicia Independent’s Project Review page.

Please share!

National Fee to Respond to Train Spills?

Repost from Governing the States and Localities

Chicago Mayor Calls for National Fee to Respond to Train Spills

In this photo released by the Alabama Emergency Management Agency a tanker train carrying crude oil burns after derailing in western Alabama outside Aliceville, Ala.,  Nov. 8, 2013. Associated Press Photo/Alabama Emergency Management Agency
As the U.S. enters an energy boom and rail remains the chief way of transporting it, cities need to get behind national efforts to improve safety, oversight and emergency response, Rahm Emanuel says.
by | January 23, 2014
Chicago Mayor Rahm Emanuel is proposing a national freight fee for hazardous materials to improve rail safety and help cities respond to the kind of disasters that destroyed a small Canadian town last year.

As rail transportation surges to meet the demands of an oil and gas boom underway in the U.S., cities need to take the lead on demanding better oversight, better safety and robust ways of responding to accidents, Emanuel said Thursday during the winter gathering of the U.S. Conference of Mayors. He pointed to the derailment of crude oil tankers in Alabama last year and incidents in North Dakota to illustrate the problem.  He compared an explosion last year in the Quebec town of Lac-Mégantic that leveled 30 downtown buildings and killed more than 40 people to Dresden after allied bombing raids in 1945.

The federal government would impose the fee on companies that extract crude oil and “the industrial consumers of it,” according Emanuel’s office. The mayor said the fee would fund new investments in rail safety and infrastructure, first responders in the locations of disasters and rebuilding efforts. If not through a national effort, the burden will fall mostly on individual cities, Emanuel said.

“You will end up having to do this because it’s going to be something we haven’t seen in this country in a long time,” he said. “We are literally in the early stages…of an ever increasing amount of this material coming into our cities.”

But the fee, which would take Congressional authorization, was couched within a broader call of improvements that included building safer rail cars, safer railroads and giving local officials more information about the freight entering their cities.

“None of us know what’s coming through our cities,” Emanuel said. “It may be sitting there for days and we may not know.”

The same day Emanuel proposed the fee, the U.S. National Transportation Safety Board and the Transportation Safety Board of Canada released a joint statement calling for better route planning that avoids more densely populated areas. The organizations also recommended more robust efforts to correctly classify hazardous materials before they’re shipped and oversight to ensure companies have plans for dealing with disasters.

Crude oil shipments by rail have jumped more than 400 percent since 2005, according to the U.S. safety board.

It’s not just big-city mayors who should be worried, said Mayor Butch Brown of Natchez, Miss. Thousands of cars filled with crude oil make their way from Canada each year in Natchez, where they’re transferred to barges headed down the Mississippi River, Brown said.“It’s not just critical to the metropolitan areas; it’s very critical to the smaller areas that have fewer resources to deal with these issues than larger metropolitan areas do,” he said.Transportation Secretary Anthony Foxx, who served as mayor of Charlotte before his nomination in 2013, said he welcomes all ideas for dealing with the growing problem, but there’s no “magic bullet” and broader action is needed on everything from enforcement to prevention and emergency response.

“We’ve got some work to do convincing our leaders in Congress to give us the resources we need to do inspections in a much more robust way and also make sure we have the enforcement mechanisms,” he said.

A spokeswoman in Emanuel’s office said he’ll be “working with national leaders to find the right way to implement” a more “comprehensive set of safety and infrastructure investments,” of which his proposal is one piece.

Please share!

For safe and healthy communities…