Bakken Crude, Casselton ND, Crude By Rail, Derailment, Evacuation, Explosion, Fire, Train inspection

Investigators release records of fiery Casselton derailment

Repost from News OK, Oklahoma City
[Editor:  See also the NTSB Press Release, which links to the Casselton Accident Docket (79 documents).  – RS]

Investigators release records of fiery Casselton derailment

April 27, 2015 at 8:46 pm

Federal investigators have released hundreds of pages of records that offer new insight into the moments just before and after a 2013 oil train derailment near Casselton, North Dakota, that created a massive fire and forced 1,400 people to evacuate for several days.

Interviews with the BNSF Railway workers operating the two trains in the derailment are included in documents the National Transportation Safety Board posted online Monday. Federal investigators also said in the documents that a broken train axle found after the derailment might have been prevented if BNSF railroad had inspected it more carefully and found a pre-existing flaw.

The broken axel wasn’t pinpointed as the cause of the crash, but the NTSB ordered the industry to recall 43 axles made by Standard Steel in the same 2002 batch.

Officials have said the accident happened when a westbound freight train derailed and a portion of it fell onto an adjacent track carrying the eastbound oil train. Eighteen cars on the 106-car oil train derailed and several exploded and burned.

In the records released Monday, the two men onboard the BNSF oil train describe losing sight of the tracks in a cloud of blowing snow shortly before seeing a derailed grain car lying across the tracks. Emergency brakes were applied, but the train was still moving 42 mph when it struck the car.

The 18 tank cars broke open and spilled 400,000 gallons of crude oil that fueled the fire that could be seen from nearly 10 miles away. It took several weeks to clean up the remaining oil from the site 30 miles west of Fargo after the flames were extinguished.

Everyone aboard both trains escaped unharmed. But just a couple minutes after conductor Pete Rigpl exited the oil train, he looked back to see flames engulf the locomotive he and Bryan Thompson had been in.

“I was exiting the cab then and started to get away from all the fire. It was — the heat was intense,” Rigpl said to investigators. “I mean, the whole situation just — I was in knee-deep snow. I couldn’t get away as quickly as I would like to.”

The two men called 911 and talked with BNSF dispatchers as they moved away from the growing fire consuming their cargo. Rigpl and Thompson told investigators they stressed the potential danger as they talked with emergency responders.

Railroad shipments of crude oil are facing additional scrutiny and tougher regulations because there have been several fiery derailments involving the commodity in recent years. The worst happened in July 2013 and killed 47 people in a small Canadian city just across the U.S.-Canada border from Maine.

Thompson, the oil train’s engineer, said that when he heard people were approaching the derailment to get a glimpse of the wreckage he urged a sheriff’s deputy to remove them because of the danger.

“I don’t think he grasped what was going on until I told him, I said do you know the story of the train in Canada? I said that’s the type of train I am,” Thompson said to the NTSB. “And his eyes got big, you know, then he said Code Red on his radio. I remember that.”

BNSF and the other major freight railroads have taken a number of steps to improve the safety of crude oil shipments, including reducing speeds in high-risk areas.

BNSF officials did not immediately respond Monday afternoon to a request for comment about the report.

Federal regulators are expected to release new standards for the tank cars that carry crude oil and new rules for railroad operations as soon as next month.

The number of carloads railroads hauled nationwide increased again last year to 493,126 from 407,761 in 2013. In 2008, before the oil boom took off in the Bakken region of North Dakota and Montana, as well as in Canada, railroads hauled just 9,500 carloads of crude oil.

BNSF, which is owned by Omaha-based Berkshire Hathaway Inc., hauls most of the oil produced in the Bakken region. It is based in Fort Worth, Texas.

Fossil fuels, Massive increase in crude-by-rail, Oil exports, Oil Industry, Tar sands crude

Whatever Shall We Do with All this Extra Oil? Oil companies want the crude-export ban lifted. Is that a good idea?

Repost from onEarth, Natural Resources Defense Council

Whatever Shall We Do with All this Extra Oil?

Oil companies want the crude-export ban lifted. Is that a good idea?
By Brian Palmer | December 13, 2014

If oil industry lobbyists didn’t have so much money, Congress would get pretty sick of them. They’re constantly whining. They don’t like the carbon pollution rules. Fuel-economy standards are too tight. Something about a pipeline from Canada. Today, they’re back on Capitol Hill moaning about the crude-export ban.

What’s that you say? You’ve never even heard of the crude-export ban? Well, now you have, and I’ve compiled a few FAQs for you.

What does the ban say?

The short answer: Crude oil drilled in the United States must be refined in the country. But as with most laws, there are exceptions. Companies can export oil to be refined in Canada as long as the products are sold there or back to the States. Some Alaskan crude has been exported. And a particular kind of heavy crude from California can be sent abroad because presidents George H.W. Bush and Bill Clinton decided it was in the national interest. Such exceptions can be significant: Total exports peaked at 104 million barrels in 1980, representing about 3 percent of total U.S. extraction that year. In recent years, though, that number has fallen below 50 million barrels.

That law’s been around since the 1970s. What’s the big deal now?

Well, we’re talking about an industry in which greed is considered good. Money, of course! Until recently, energy companies weren’t drilling enough oil to make a big splash on the international market. But U.S. production surged by nearly 50 percent between 2008 and 2013, and those CEOs now think they can take home even bigger bonuses if they’re allowed to sell abroad.

Why was it created in the first place?

Basically because the Arab members of the Organization of Petroleum Exporting Countries got mad that the United States and a few other countries were siding with Israel during the 1973 Arab-Israeli War—and cut production and banned petroleum exports to those nations. The price of crude quadrupled, causing a five-month-long oil crisis that majorly disrupted global commerce and American lives. Since then, energy independence has been a goal for every U.S. president; Gerald Ford, for example, signed the 1975 Energy Policy and Conservation Act, which prohibited most crude exports and established a national strategic oil reserve.

Will I pay more for gas either way?

The ban certainly depresses the price of U.S.-produced crude oil, but gas prices involve a lot of factors. Energy analysts and industry advocates have debated the ban’s effects for years. So, in an attempt to settle the argument, the somewhat more impartial U.S. Energy Information Administration recently published a report on what would happen to gas prices if exports were allowed. You can read it here if you’re an oil-price wonk. Here’s the short version, from the organization’s administrator, Adam Sieminski: “[I]t probably wouldn’t do a great deal one way or the other with gasoline prices.”

Apparently, when it comes to economics, the controversy has more to do with profits than your family budget.

What would it mean for the climate if we allowed the exports?

It might be bad news. In an era of high domestic production, the ban holds down the price of West Texas Intermediate, North America’s benchmark crude, which then keeps Canada’s tar sands crude prices low. (The price points of the two crudes move roughly in sync.) So if Congress lifts the ban, the tar sands industry, which is currently in a major funk, could be saved—and this would mean a lot more extraction of the most carbon-intensive fossil fuel source around.

That’s the theory. And a March study from Oil Change International supports it: The report concluded that allowing exports would result in added carbon emissions equivalent to the output of 42 coal plants. The factors influencing global oil prices are complex, though, so it’s difficult to say exactly how much fossil fuel the crude-export ban is keeping in the ground.

The lack of certainty, however, makes its own point. Before Congress even considers repealing a 39-year-old law dealing directly with fossil fuels, it ought to understand the implications for climate change. It’s appalling that politicians would consider lifting the ban without full information. But I guess they’re not scientists.

 

 

Chevron Refinery, Marine transport, Oil exports, Valero Benicia Refinery

Contaminated Oil That No One Wants Is Heading to Asia: California allows rare export exemption

Repost from Bloomberg Business News
[Editor:  A local resident observed that the photo below was taken at the docks here in Benicia, California — home of Valero Benicia Refinery.  The Bloomberg story says that the contaminated oil originated with Chevron and was stored at Plains All American in Martinez.  But maybe there’s more to the story?  Maybe Valero was an additional source or storage facility for the ship’s contents?  My source says that the tanker Hellespont Protector has been seen about twice over the last few months, and is a new one around here. (Background on current efforts of the oil industry to overturn the 1975 U.S. crude-export ban.)  – RS]

Contaminated Oil That No One Wants Is Heading to Asia

By Lynn Doan and Dan Murtaugh, April 26, 2015 4:00 PM PDT
Hellespont Protector
Oil tanker Hellespont Protector, said to be chartered to export California oil, was anchored in the San Francisco Bay on April 20, 2015. Photographer: Lynn Doan/Bloomberg

One million barrels of oil. Enough to fill more than 60 Olympic-sized swimming pools. And there it sat in tanks outside San Francisco — for three years — despite crude prices that topped $100 a barrel.

This isn’t the prized “light, sweet” kind of crude that is pumped out of the ground in Texas, or even the thick, sticky stuff from Alberta’s tar sands. Rather, it’s what’s known as “orphaned oil” that is so contaminated with organic chlorides that it can corrode the insides of even the biggest refineries.

Now, it’s on the move — and guessing exactly where is turning into a sort of parlor game for some in the oil market. All that is known is that Chevron Corp., which flushed the oil from a pipeline in September 2012 and has seen its value drop by $50 million since then, is loading it onto two tankers bound for Asia.

“It’s really kind of a bizarre incident,” said Gordon Schremp, a senior fuels specialist at the California Energy Commission who was notified by industry representatives of the planned exports.

It’s a rare shipment, considering most crude is barred from leaving U.S. borders. It just so happens that an exemption has been in place since 1992 allowing limited amounts of California oil to leave the country.

Export Exemption

The only reason exports don’t happen very often is because California’s refiners keep almost all the state’s oil for themselves.

The saga began on Sept. 17, 2012, when Chevron told shippers that its pipeline delivering California crude to San Francisco-area refiners was contaminated. Chevron ended up pushing an estimated 1 million barrels through the pipe to get rid of the chlorides.

And so the tainted oil sat in tanks at a Plains All American Pipeline LP terminal in Martinez until this month, when all the red tape, including getting an export license from the Commerce Department, was finally cut, Schremp said.

When the contamination was discovered, heavy crude from California’s San Joaquin Valley cost $97 a barrel. It’s now $46. The difference, multiplied by 1 million barrels, is more than $50 million. And that’s not counting the cost of storing the oil for more than two years, which could add millions more.

In Limbo

West Texas Intermediate futures, the benchmark for U.S. crude, rose 9 cents to $57.24 a barrel at 11:53 a.m. local time on the New York Mercantile Exchange. Prices dropped about 44 percent in the past year.

Kent Robertson, a spokesman for Chevron, declined to comment on the exports. Brad Leone and Meredith Hartley, spokesmen for Plains, didn’t respond to requests for comment.

Oil tanker Hellespont Protector, one of the two vessels chartered to carry the crude, was anchored in the San Francisco Bay on Friday, shipping data compiled by Bloomberg show. The other, Energy Champion, is headed for Qingdao, China, a place with no refineries. It may be a stopover, or it may not be headed to a refinery at all.

Schremp, who wasn’t told where the outcast barrels are headed, said they could be used as fuel for large ships or burned in a power plant.

If refiners know about the contamination ahead of time, they can blend in additives as a cure, but it’s an expensive solution that erodes the value of the crude, said David Hackett, president of energy consultant Stillwell Associates LLC in Irvine, California.

Wherever it lands, chances are it’ll be the first and last California oil that Asia sees for a while. California crude prices have been getting stronger and refiners across the Pacific have been flooded with supplies from much closer by.

Asked whether the rare cargoes are a bellwether for future exports of California oil, Schremp said, “It’s not like it makes perfect economic sense to move barrels that way into the world market — this was an export of circumstance.”

Fracking, Oil prices, Oil producers

Industry downturn: Half of US Fracking Companies “Dead or Sold” By Year-End

Repost from Oil Change International

Half US Frackers “Dead or Sold” By Year-End

By Andy Rowell, April 24, 2015

fracking photoThere has been increasing speculation over the last twenty-four hours that the oil price might start to rally upwards.“

What we are seeing now is improvement, suggesting a recovery within the longer term downtrend … I’m short-term bullish on Brent,” Roelof van den Akker, a chartist at ING Wholesale Banking, told CNBC earlier today. Van den Akker is predicting that the oil price could jump $20 / barrel in the near future.

He is not the only one who is thinking that the oil price is set to rebound. The Financial Times is reporting that hedge funds are also placing some of their “largest ever bets on a rally in oil prices”.

But the FT adds that this comes “just as evidence mounts that energy companies are hunkering down for a delayed recovery.”

Part of what this “hunkering down” might look like was outlined by one industry executive on Wednesday.

The executive, Rob Fulks, a marketing director at fracking company Weatherford, predicted that half of the 41 fracking companies operating in the U.S “will be dead or sold” by the end of this year due to slashed spending by oil companies caused by the oil price plunge.

Fulks, whose company is the fifth largest fracker in the US, was speaking at an industry conference in Houston on Wednesday. He predicted there could be as little as 20 fracking companies left by the year end, compared to the 41 there are currently and 61 there were at the beginning of last year.

The cuts are part of the $100 billion the industry has cut in spending globally after prices have plummeted.

He told the audience that “we see yards are locked up and the doors are closed”, adding “it’s not good for equipment to park anything, whether it’s an airplane, a frack pump or a car.”

As far as his own company is concerned, Fulks said that Weatherford was making “dramatic” cuts to expenditure.

Many in the industry, like Fulks, will be hoping that the hedge funds are right and that the oil price rebounds sooner rather than later.

But whether it happens before more fracking companies go bust or are taken over, remains to be seen.

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