Crude By Rail, Oil prices

Crude oil shipments by rail from Midwest to coastal regions decline

Repost from US Energy Information Administration – TODAY IN ENERGY

Crude oil shipments by rail from Midwest to coastal regions decline

graph of crude by rail receipts from the Midwest, as explained in the article text

Source: U.S. Energy Information Administration, Petroleum Supply Monthly

The movement of crude by rail within the United States, including within Petroleum Administration for Defense Districts (PADDs), reached a high of 928,000 barrels per day (b/d) in October 2014, with most of the shipments originating in the Midwest and going to the East Coast, West Coast, and Gulf Coast regions. Since October 2015, crude-by-rail volumes have declined as production has slowed, as crude oil price spreads have narrowed, and as more pipelines have come online.

The economics of moving crude by rail depend largely on significant domestic crude discounts compared with international crudes. Because domestic crudes such as West Texas Intermediate (WTI) and Bakken, which are priced at Oklahoma and North Dakota, respectively, are no longer priced significantly less than waterborne crudes such as North Sea Brent, there is less of a cost advantage for costal refineries to run the domestic crudes. The narrower the spread between domestic and imported international crude, the more likely costal refineries will choose to run imported crudes rather than domestic supplies shipped by rail.

graph of price spread between domestic crude oils and Brent, as explained in the article text

Source: U.S. Energy Information Administration, based on Bloomberg

Crude supplies carried by rail from the Midwest to the East Coast (PADD 2 to PADD 1) continue to be the largest rail movement, accounting for 50% of total crude oil moved by rail within the United States in December 2015, the latest month for which data are available. However, this flow has been trending downward since reaching 465,000 b/d in April 2015. With a narrowing price spread between domestic and imported crude oil, imports of crude oil to the East Coast, particularly from countries in western Africa, have grown. Increased runs of imported crude in East Coast refineries have reduced the need for rail shipments of domestic crude oil to that region.

The next largest crude-by-rail movement is from the Midwest to the West Coast, which typically goes to refineries in the Pacific Northwest. Although movements from the Midwest to the West Coast fell in the early part of 2015 during planned and unplanned refinery outages, deliveries resumed when refineries restarted in late spring. The West Coast received an average of 139,000 b/d of crude oil by rail from the Midwest in 2015, roughly comparable with 2014 levels.

Movements of crude by rail from the Midwest to the Gulf Coast (PADD 2 to PADD 3) formed the largest inter-PADD rail movement from 2011 to 2013. Midwest-to-Gulf Coast rail movements started to decline in the second half of 2013 as new and expanded pipeline capacity came online. As additional pipeline capacity was added throughout 2013–15, crude-by-rail movements to the Gulf Coast from the Midwest continued to decline, dropping to 38,000 b/d in December 2015, 75,000 b/d less than in the previous year. Other crude oil-producing regions, such as the Niobrara in the Rocky Mountains (PADD 4) and the Permian Basin in Texas and New Mexico (part of PADD 3) also experienced growth in pipeline takeaway capacity to the Gulf Coast refining centers, reducing the need for railed crude supply from the Midwest.

Continued pipeline takeaway expansions and interconnections with existing pipelines in crude-producing regions such as the Bakken and the Gulf Coast will further reduce the need for intra-PADD rail flows within the Midwest and the Gulf Coast, as well as inter-PADD rail flows from the Midwest to the Gulf Coast. However, no crude oil pipeline infrastructure currently exists to move crude to the East and West coasts from the Midwest. Therefore, future crude-by-rail flows from the Midwest to the coasts will depend on the price dynamic between domestic and international crudes, as well as any long-term contractual volume commitments made by refiners.

Principal contributor: Arup Mallik, Mason Hamilton
Fire, Foam, U.S. Military, Water contamination

Military to check whether firefighting foam contaminated wells

Repost from Associated Press – The Big Story
[Editor: More information: A list of the fire and crash training sites where the military is assessing the risk of groundwater contamination from firefighting foam: http://bit.ly/1LUHt32.  – RS]

Military to check for water contamination at 664 sites

By Jennifer McDermott, Mar. 10, 2016 5:12 PM EST
In this Feb. 2, 2016 photo, area residents gather around an aerial photograph of Fentress Naval Auxiliary Landing Field during a meeting at a school, in Chesapeake, Va. The military is beginning to check whether chemicals from its firefighting foam may have contaminated groundwater at hundreds of sites nationwide, according to the Defense Department. The Navy started handing out bottled water in January to people who work at Fentress. (Steve Earley/The Virginian-Pilot via AP) MAGS OUT; MANDATORY CREDIT

PROVIDENCE, R.I. (AP) — The military plans to examine hundreds of sites nationwide to determine whether chemicals from foam used to fight fires have contaminated groundwater and spread to drinking water, the Defense Department said.

The checks are planned for 664 sites where the military has conducted fire or crash training, military officials told The Associated Press this week.

Since December, tests have been carried out at 28 naval sites in mostly coastal areas. Drinking water at a landing field in Virginia and the groundwater at another site in New Jersey have been found to contain levels above the guidance given by the federal Environmental Protection Agency, the Navy said. Results of the other tests have either come up under federally acceptable levels or are pending.

The Navy is giving bottled water to its personnel at the Naval Auxiliary Landing Field Fentress in Chesapeake, Virginia, and is testing wells in a nearby rural area after the discovery of perfluorinated chemicals in drinking water, which the federal Agency for Toxic Substances and Disease Registry says may be associated with prostate, kidney and testicular cancer, along with other health issues.

The Navy found perfluorinated chemicals in the groundwater monitoring wells at Naval Weapons Station Earle in Colts Neck, New Jersey, but not in the drinking water supply. Test results from off-base drinking water wells are expected this month.

And several congressmen are raising concerns about the safety of drinking water near two former Navy bases in suburban Philadelphia. The lawmakers say firefighting foams might be the source of chemicals found in nearly 100 public and private wells near the Naval Air Station Joint Reserve Base Willow Grove and the Naval Air Warfare Center in Warminster.

The foam is used where potentially catastrophic fuel fires can occur, such as in a plane crash, because it can rapidly extinguish them. It contains perfluorooctane sulfonate and perfluorooctanoic acid, or PFOS and PFOA, both considered emerging contaminants by the U.S. Environmental Protection Agency.

The Defense Department said that until foam without perfluorinated chemicals can be certified for military use, it is removing stocks of it in some places and also trying to prevent any uncontrolled releases during training exercises.

The military is beginning to assess the risk to groundwater at the training sites not only to determine the extent of contamination, but also to identify any action the Defense Department needs to take, said Lt. Col. Eric D. Badger, a department spokesman.

California has the most sites, with 85, followed by Texas, with 57, Florida, with 38, and Alaska and South Carolina, each with 26, according to a list provided to the AP. Each state has at least one site.

Knowledge about the chemicals’ effects has been evolving, and the EPA does not regulate them. The agency in 2009 issued guidance on the level at which they are considered harmful to health, but it was only an advisory — not a standard that could be legally enforced.

The EPA said then that it was assessing the potential risk from short-term exposure through drinking water. It later began studying the health effects from a lifetime of exposure. Those studies remain in progress.

The Navy started handing out bottled water in January to about 50 people at the contaminated Virginia site, and it worked with the city to set up a water station for concerned property owners after it found perfluorinated chemicals in on-base drinking water wells above the concentrations in the EPA advisory.

The Navy is testing private wells of nearby property owners; those results are due next week.

Chris Evans, of the Virginia Department of Environmental Quality, credited the Navy with being proactive but said he’s concerned anytime there’s a potential threat to human health and the environment.

Some states have established their own drinking water and groundwater guidelines for the maximum allowable concentrations of the chemicals; Virginia uses the EPA’s.

“We’ll follow EPA’s lead as this develops,” Evans said.

There’s a lot of evolving science around perfluorinated chemicals, said Lawrence Hajna, a spokesman for the New Jersey Department of Environmental Protection.

“The more that we hear, the more that we realize that this is a very important health concern,” he said.

___

Online: A list of the fire and crash training sites where the military is assessing the risk of groundwater contamination from firefighting foam: http://bit.ly/1LUHt32
Bakken Crude, California Public Utilities Commission, Crude By Rail, Derailment, Emergency Readiness & Response, Explosion, Feather River Canyon, Fish and wildlife, Lac-Mégantic, Lake Oroville, Oil spill, Rail Safety, Water contamination

A looming disaster – Crude oil running on Butte County’s railways poses a threat to local, state watersheds

Repost from the Chico News & Review

A looming disaster – Crude oil running on Butte County’s railways poses a threat to local, state watersheds

By Dave Garcia, 03.10.16
DAVE GARCIA. The author, a longtime Oroville resident, is the spokesman for Frack-Free Butte County.

Scientists have found unprecedented levels of fish deformities in Canada’s Chaudière River following the Lac-Mégantic Bakken crude oil spill in 2013. This catastrophic train derailment, which killed 47 people and ravaged parts of the small town in Quebec, underscores the danger of spilled toxic crude oil getting into our waterways and affecting living organisms.

I find the Canadian government’s report very distressing—even for Butte County. That’s because, just last week, I observed a train of 97 railcars loaded with crude oil traveling through the Feather River Canyon and downtown Oroville.

The California Public Utilities Commission has designated this rail route as high risk because of its sharp curves and steep grade; it travels next to the Feather River, which feeds into Lake Oroville, an integral part of California’s domestic water supply.

If you think that railway shipping is safe, think back to 2014. That’s the year 14 railcars derailed, falling down into the canyon and spilling their loads of grain into the Feather River. The last thing we need, especially in a time of drought, is crude oil poisoning the water of our second-largest reservoir.

In 2010, it took over $1 billion to clean up the Kalamazoo River crude oil spill. But you can never really clean up a crude oil spill in pristine freshwater, as the deformed fish from the Chaudière River reveal.

Keeping crude-oil-carrying railcars on the state’s tracks is simply not worth it. Less than 1 percent of California’s imported oil is transported by railway. Californians receive little benefit, but bear the risks to their communities and watersheds from this practice.

Since Lac-Mégantic, there have been nine more crude oil derailments, explosions and spills into waterways. We need to learn a lesson from those catastrophes. We must convey to our politicians—local, state and federal—our priority of protecting our communities, fisheries and waterways. Let’s not let what happened in Quebec happen in Butte County.

Benicians for a Safe and Healthy Community, Crude By Rail, Environmental review, Public Health, Public permitting, Public Safety, Valero Benicia Refinery, Valero Crude By Rail

2014-2016 Comments on Valero Crude by Rail by Benicians for a Safe and Healthy Community

By Roger Straw, March 10, 2016

Formal comments on Valero Crude by Rail by Benicians for a Safe and Healthy Community

I have been asked to make it easier for people to access the several important contributions made by Benicians for a Safe and Healthy Community (BSHC).

BSHC is an informal group of Benicia residents who first gathered in January of 2014 to oppose Valero’s dirty and dangerous Crude By Rail proposal.  At each step along the way, BSHC has contributed significant public comments on the City of Benicia’s environmental review. See below:

 

For safe and healthy communities…