Sacramento officials concerned, will meet with Area Council of Governments

Repost from The Sacramento Bee
[Editor: Excellent article by Bee reporters Bizjak & Tate.  It’s encouraging that Sacramento is waking up to the threat of catastrophic accidents.  We will want to keep an eye on the April 22 meeting of the Sacramento Area Council of Governments.  – RS]

Refinery plans to ship 100 train cars of crude oil through Sacramento

By Tony Bizjak and Curtis Tate, The Sacramento Bee
Published: Wednesday, Apr.  2, 2014

A Bay Area refinery’s plan to run up to 100 train cars of highly flammable crude oil daily through Sacramento is prompting a late push by area leaders to protect cities on the rail line.

Sacramento officials say they only recently learned that a proposed rail terminal at the Valero company’s refinery in Benicia could dramatically increase the number of trains carrying crude oil through the region, including through populated downtowns. They say they are scrambling to fashion a joint statement to Valero officials expressing concerns.

The trains would travel on the Union Pacific line that runs through both the Roseville and downtown Sacramento railyards, as well as through downtown West Sacramento and Davis. Those are the same tracks that carry Capitol Corridor passenger trains between Sacramento and the Bay Area.

The Valero rail terminal is one of several being proposed by refineries responding to a major shift in how crude oil is transported nationally. Currently, the Benicia refinery receives most crude via pipeline and ships. But Valero and other companies are moving quickly toward more rail transport to align with the boom in hydraulic fracturing, or fracking, in inland areas like North Dakota, where much of the new oil is a lighter, more flammable type from the Bakken oil fields.

“These rail shipments are the wave of the future,” Sacramento city official Fran Halbakken said, “but there is not much information out there.”

Data compiled by the California Energy Commission shows crude oil shipments into the state via rail from other states jumped from  1 million barrels in 2012 to more than  6 million in 2013. Local fire officials, who would be the first responders in case of crashes or derailments, say they do not receive detailed information on how many of those train cars come through Sacramento.

“We’re trying to figure what is the baseline that comes through now,” said Davis city official Mike Webb. “All jurisdictions would want to know.”

Union Pacific officials say their company, one of the major rail transporters in California, shipped less than 1,000 carloads of crude oil statewide on a monthly basis last year – or 33 cars a day. A UP spokesman declined this week to say how much of that goes through Sacramento. “We are not currently breaking out how much crude we move through a specific community,” UP’s Aaron Hunt said. “We are only giving out our state number.”

BNSF, the other major rail transporter in California, also declined to discuss crude oil routing information.

Valero’s terminal project description offers a brief but clear statement on plans for major shipments through Sacramento: “(Union Pacific Railroad)-operated locomotives would haul up to 100 crude oil rail cars a day from the UPRR Roseville railyard to the refinery,” the report states.

And more rail shipments could be on their way: Phillips 66 says it intends to begin deliveries of crude by rail sometime next year to its coastal refinery in Santa Maria. Union Pacific would deliver as many as five 80-car trains a week of oil “from a variety of sources in North America.” One route could pass through Sacramento.

Officials with the state Office of Spill Prevention and Response say refineries around the state may ultimately have the capacity to process up to 143 million barrels of crude shipments via rail a year, far more than the  6 million shipped last year.

Last year, a train carrying Bakken crude oil derailed in a Quebec town, sparking a massive fire that killed 47 people and leveled the town center. Subsequent derailments in Alabama and North Dakota, though not fatal, caused fires and evacuations and showed that disaster could strike again.

While such incidents are rare, local fire officials say the pressure is on to be more prepared for that possibility.

“Any time you increase numbers, you increase the probability of problems that would come with that,” said Sacramento City Interim Fire Chief Dan Haverty.

Last week, The Sacramento Bee reported that McClellan Business Park is being used as a transfer station where oil, including Bakken crude, is being moved from rail cars to tanker trucks. Local safety officials told The Bee they knew little about the McClellan operation.

Valero and Benicia officials are expected to publish a draft environmental impact report later this month on the company’s planned rail terminal next to Interstate 680 just north of the Benicia-Martinez Bridge. Sacramento officials say they likely will issue a joint statement to Valero on what they think should be done to increase safety in “up-line” cities.

The Sacramento Area Council of Governments is planning a meeting of its 32 local cities and counties on April 22 to discuss the issue.

West Sacramento Fire Chief Rick Martinez said officials may ask that Valero be required to finance extra emergency training and safety equipment for up-line communities, and that there be tight rules on when or whether trains are allowed to sit on track sidings.

He said the emerging national discussion about rail safety may provide a platform for cities to push for other safety improvements, such as better “real-time” information on what materials are coming through town, so fire and hazardous materials crews know what they are getting into as they head to a call.

“As they look at this Bakken oil, is there a way through technology to get more information to local agencies?” Martinez said. “We are trying to take advantage of the interest to pose the questions that may guide” future regulations.

Aides to Rep. Doris Matsui, D-Sacramento, say she has begun exploring the issue as well. Matsui’s office issued a statement this week, saying “it is imperative that the rail cars are safe and that local agencies are prepared for the increased risk.” Aides said Matsui sent a letter to the Department of Homeland Security recently, “seeking additional federal funding for first-responder training, arguing that the increased risk posed by these oil cars warrants additional federal funds.”

Although the federal government regulates rail shipments, federal rules haven’t caught up to the surge in oil traffic on the nation’s rail network. That’s left local leaders and community activists in cities around the country at the forefront of pushing for changes in state and federal laws.

Last week, the city councils of Berkeley and Richmond voted to oppose crude shipments on rail lines through their cities. The resolutions call for state lawmakers and members of Congress to seek tougher regulations.

Several environmental groups filed a lawsuit last week against pipeline operator Kinder Morgan and the Bay Area Air Quality Management District. The groups said the agency quietly issued a permit to Kinder Morgan for a crude-by-rail facility in February without reviewing potential environmental and health impacts.

“We don’t accept that as a foregone conclusion,” said Diane Bailey, a senior scientist with the Natural Resources Defense Council, one of the groups in the lawsuit.

A group of community activists in Benicia and Martinez has been trying to stop Valero and another refiner, Tesoro, from expanding their crude oil deliveries by rail. And they’re pressing local, state and federal officials to push for tougher oversight of crude oil shipments by rail.

“People are afraid that anybody along the rail line could become the next (Quebec),” said Andres Soto, a community activist in Benicia.

Oil industry officials say fears of derailments and fires are overstated. The Association of American Railroads, an industry group, says 99.997 percent of hazardous materials shipped by rail reach their destination without incident.

Charles Drevna, president of the American Fuel & Petrochemical Manufacturers Association, dismissed the movement to oppose new terminals and additional rail shipments, saying “you’re always going to see the anti-fossil fuel mentality in California.” He said, given the cost savings, “the vast majority of Californians will be happy to get Bakken crude.”

    Market analyst: Kinder Morgan switched from ethanol to crude “late last year”

    Repost from PLATTS McGraw Hill Financial

    More ethanol-to-crude rail facility conversions unlikely in California: analyst

    Orlando, Florida (Platts)–24Mar2014

    More conversions of California ethanol rail unloading terminals to crude service are unlikely, following Kinder Morgan’s switch of its Richmond, California, unloading facility, an analyst said Monday.

    “The other big [ethanol] terminals aren’t as close to refiners, and there is a limited amount of ethanol capacity,” Stillwater Associates President David Hackett said on the sidelines of the American Fuel and Petrochemical Manufacturers Annual Meeting in Orlando, Florida.

    Kinder Morgan late last year converted the terminal to crude service from ethanol service “after changes in the ethanol market made it attractive for us to look to other commodities,” spokeswoman Melissa Ruiz said Monday in an email.

    The Richmond terminal is the only 100-car unit train crude-by-rail facility in California, she said.

    “In order to handle crude oil, we had to file a new application with the Bay Area Air Quality Management District (BAAQMA) for permits, which we received last summer,” she said. “We began handling crude this past September, and the facility will serve Bay Area refiners.”

    The terminal is located on the Burlington Northern Santa Fe rail yard in Richmond. The railed crude is trucked from the terminal, she said, noting that there are no pipelines or tank connections involved.

    Ruiz declined to comment on the terminal’s current throughput or on which types of crude are received by the facility.

    The rail terminal conversion comes after the leading US midstream company early last year scrapped its high-profile proposed Texas-to-California Freedom Pipeline on a lack of customer interest. The pipeline would have delivered 277,000 b/d of crude from the Permian Basin in West Texas to northern and southern California refining complexes.

    Kinder Morgan said at the time that it would focus on providing crude-by-rail options for West Coast and Texas shippers.

    Along the West Coast, refiners and midstream companies are planning to construct crude-by-rail unloading terminals, but are facing permitting delays opposition.

    If California “doesn’t get crude by rail, their competitiveness will erode,” Hackett said during the Platts Barrel Talk panel discussion at the conference. “We do see some uptick in rail deliveries, but there is a lot of opposition to crude by rail in California with the environmental community.”

    –Bridget Hunsucker, Edited by Katharine Fraser

      California cities’ crude-by-rail opposition makes national news

      Repost from The Miami Herald

      As oil shipments rise on rails, California cities fight to be heard

      By Curtis Tate and Tony Bizjak
      McClatchy  Newspapers                           
       A tanker truck is filled from railway cars containing crude oil on railroad tracks in McClellan Park in North Highlands on Wednesday, March 19, 2014. North Highlands is a suburb just outside the city limits of Sacramento, CA.
      A tanker truck is filled from railway cars containing crude oil on railroad tracks in McClellan Park in North Highlands on Wednesday, March 19, 2014. North Highlands is a suburb just outside the city limits of Sacramento, CA.        Randall Benton    /     MCT 

      SACRAMENTO, Calif. — As rail shipments of crude oil have risen in Northern California, so has opposition in many communities along rail lines and near the refineries they supply.

      Concerned about the potential safety and environmental hazards of 100-car trains of oil rolling through population centers, leaders from Sacramento to San Jose say they’re banding together to present a unified voice for “up-line” cities: communities that could bear some of the highest risks as California turns toward rail shipments to quench its thirst for fuel.

      “What I suspect will come out of this is more of a regional understanding and interest in the topic,” said Mike Webb, director of community development and sustainability in Davis.

      The federal government regulates rail shipments, but the rules haven’t caught up to the surge in oil traffic on the nation’s rail network. That’s left local leaders at the forefront of pushing for changes in state and federal laws.

      Last week, the city councils of Berkeley and Richmond voted to oppose crude shipments on rail lines through their towns. The resolutions call for state lawmakers and members of Congress to seek tougher regulations.

      Several environmental groups filed a lawsuit last week against pipeline operator Kinder Morgan and the Bay Area Air Quality Management District. The groups said the agency quietly issued a permit to Kinder Morgan for a crude-by-rail facility in February without reviewing potential environmental and health impacts.

      “We don’t accept that as a forgone conclusion,” said Diane Bailey, a senior scientist with the Natural Resources Defense Council, one of the groups in the lawsuit.

      But it may be an uphill fight. State officials anticipate that within two years, California will receive a quarter of its petroleum supply by rail. That could potentially mean several trains of crude oil passing daily through Sacramento, West Sacramento and Davis.

      The Sacramento Bee reported last week that crude oil had been transferred from trains to trucks at the former McClellan Air Force Base in Sacramento since last year without the knowledge of local emergency response officials and without a required air quality permit.

      Webb said Davis’ goal is to be part of the review process to make sure the city’s concerns are heard.

      “Our primary objective and interest is in the health and safety of our community,” he said.

      A group of community activists in Benicia and Martinez has been trying to stop two oil refiners, Tesoro and Valero, from expanding their crude oil deliveries by rail. And they’re pressing local, state and federal officials to push for tougher oversight of crude oil shipments by rail following a series of derailments with catastrophic fires and spills.

      They’re focused on two types of crude oil that are moving by rail in the absence of new pipelines. First is tar sands, a thick, gritty crude that’s produced in western Canada. Tar sands production generates more carbon dioxide emissions, environmentalists say, and is more difficult to clean up when spilled in water because it’s heavy and sinks.

      The second is Bakken crude, extracted through hydraulic fracturing of shale rock. Most of the Bakken formation lies in North Dakota, and most of the oil produced there moves out of the state by rail. The oil has proved more volatile than conventional types.

      Since last summer, three major derailments have involved Bakken crude. The first, in Lac-Megantic, Quebec, killed 47 people in an inferno that also leveled the center of the small lakeside town.

      Subsequent derailments in Alabama and North Dakota, though not fatal, showed that disaster could strike again.

      “People are afraid that anybody along the rail line could become the next Lac-Megantic,” said Andres Soto, a community activist in Benicia.

      Part of the frustration at the local level is the lack of information about how much crude oil is being shipped on rail lines. The companies involved in transporting and refining oil are not required to provide much information on the shipments and usually don’t.

      “There is so little oversight,” Bailey said. “This is a new area and people are scratching their heads, saying, ‘Wow, this isn’t covered.’”

      West Sacramento Fire Chief Rick Martinez, who has experience fighting oil fires, said national attention on the issue may provide a platform for cities to push for better real-time information on what materials are coming through town, so emergency responders know what to expect as they head to a call.

      “Is there way through technology to get more information to local agencies?” he asked. “We are trying to take advantage of the interest to pose the questions.”

        For safe and healthy communities…