Tag Archives: Alberta Canada

Dangerous energy gamble: Pipelines vs. rail

Repost from the Washington Examiner
[Editor: One significant quote among many: "In the last five years, 423 oil trains have crashed in the U.S. Since 2010, those crashes have cost about $45 million in damages. In just the first six months of 2015, 31 oil train crashes cost almost $30 million in damages.... It's 5.5 times more likely that oil will be spilled during rail transport than from a pipeline, according to a study by the Fraser Institute, an independent Canadian think tank. The risk of deaths, injuries and spills are higher with rail and trucks since vehicles can hit other vehicles, they travel through population centers and the drivers can err. None of those factors exist for pipelines." - RS]

Dangerous energy gamble: Pipelines vs. rail

By Kyle Feldscher, 11/2/15 12:01 AM

Fire burns at the scene of a train derailment, near Mount Carbon, W.Va., on Feb. 16. Fires burned for nearly nine hours after the train carrying more than 100 tankers of crude oil derailed in a snowstorm. (AP Photo/WCHS-TV)

Energy companies increasingly have turned to rail to ship crude oil during the fracking boom, but with train crashes becoming more frequent, they are pushing for construction of more pipelines beyond the Keystone XL.

However, that effort is being stymied by the collapse of oil prices and concerns about pipeline safety.

On Wednesday, Shell announced it would stop construction on a site in Alberta, Canada, that potentially holds 418 million barrels of bitumen oil. The company blamed the project’s expense in a time of cheap oil as well as a lack of pipeline infrastructure.

It’s one example of low prices and lack of pipelines prompting companies to reconsider drilling for oil, especially in the Canadian tar sands, where it’s more expensive to drill. Pipeline transportation is typically cheaper than rail, which costs about $30 a barrel more.

Fifty pipelines have been proposed to the Federal Energy Regulatory Commission this year. They would carry the light, sweet crude from shale regions as well as the natural gas that has helped make the U.S. the world’s energy leader. ”

Because of the costs associated with [rail], it’s going to drive up the cost of oil and it’s going to be significantly higher than pipelines on a per barrel basis,” said Dan Kish, senior vice president for policy at the conservative Institute for Energy Research.

Another calculation oil companies must make is the safety of their highly flammable product.

In the last five years, 423 oil trains have crashed in the U.S. Since 2010, those crashes have cost about $45 million in damages. In just the first six months of 2015, 31 oil train crashes cost almost $30 million in damages, mostly due to a major crash in West Virginia.

It’s 5.5 times more likely that oil will be spilled during rail transport than from a pipeline, according to a study by the Fraser Institute, an independent Canadian think tank. The risk of deaths, injuries and spills are higher with rail and trucks since vehicles can hit other vehicles, they travel through population centers and the drivers can err. None of those factors exist for pipelines.

The August study also found oil and natural gas production is rising faster than existing American and Canadian pipelines can handle. Those pipelines would be even busier if production increased in the Canadian tar sands.

Keystone XL, proposed by TransCanada in 2007, would be able to transport 830,000 barrels per day from the tar sands to the Gulf Coast to be refined. Due to the viscous nature of bitumen oil, it’s much easier to transport it by pipeline than by rail, experts say.

When a train carrying oil derails, it’s often catastrophic.

In West Virginia, oil burned for days after 26 oil tanker cars derailed in February. Nineteen of those cars caught on fire and oil spilled into a nearby river. The damages from that crash totaled more than $23 million.

A train derailment in a Quebec community that killed 46 people in July 2013 prompted calls for better rail safety and led some to question whether to transport highly flammable oil at all.

The State Department estimates rail transportation of oil is responsible for 712 injuries and 94 deaths per year, while oil pipelines are responsible for three injuries and two deaths per year.

“For our society, we have to evaluate the value we place on human life and we should make that a priority,” said Diana Furtchgott-Roth, a conservative economist who is the director of the Manhattan Institute’s e21 program.

“The families of those 46 people killed in Lac-Megantic would have been happy to have less oil and having the lives of their family members back.”

Dangerous derailments led the Obama administration to introduce new regulations to make tanker cars safer. The rule, announced in May, requires improvements to braking systems, making tanker cars thicker and more fire resistant and new protocols for transporting flammable liquids.

The number of crashes steadily increased during the last five years, as more trains shipped crude and natural gas, rising from nine crashes in 2010 to 144 crashes in 2014. But as the price of oil plummeted, the amount of crude oil being drilled and shipped leveled off in 2015, according to the Energy Information Administration.

If drilling in the Canadian tar sands in Alberta were to pick up in earnest, State Department officials believe rail transport would lead to 49 more injuries and six more deaths per year. If that oil were to be moved by the Keystone XL pipeline, there would be one additional injury and no fatalities.

Environmentalists, who have been fighting the Keystone XL, point to the State Department’s finding that pipeline spills are often bigger than those from trains and trucks.

They also point to declining oil use and the collapse of prices as great excuses to leave it in the ground.

Zach Drennen, legislative associate at the League of Conservation Voters, said with oil prices as low as they are, it’s economic folly for oil companies to drill in the Canadian tar sands. Without high oil prices, companies can’t afford to build pipelines. They also can’t afford to ship by rail.

That is why green groups think oil companies could be willing to leave the oil in the earth.

“If you look right now, a lot of oil companies are just deciding that’s not where they want to put their money at,” Drennen said.

To Kish, environmentalists’ goal is to make it too expensive to drill.

“They’re going to try and fight against every damn pipeline they can,” he said, “because if they can choke off production and delay construction of pipelines, it causes disruptions.”

But Ken Green, senior director of natural resource studies at the Fraser Institute, said environmentalists’ dream of keeping oil in the ground isn’t feasible.

“The oil in the ground has a market value and everyone knows what the market value is,” he said. “It’s not hard to calculate that market value … My assumption is sooner or later, that value will be sought.”

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Roger Straw: Crude by rail is dangerous — and dirty!

Repost from the Benicia Herald

Crude by rail is dangerous — and dirty!

By Roger Straw, August 2, 2015

Roger Straw

BACK IN JUNE OF 2013, I was alarmed to discover that Valero had plans to make me and all of Benicia complicit in the massive destruction taking place in the pristine forests of Alberta, Canada. With city Planning Commission approval, Valero planned to purchase crude oil taken from strip mines in Canada that are the dirtiest producers of oil on earth, then ship it on dangerous trains all across the West to our back yard.

Since then, Benicians have learned much more about Valero’s proposal. We’ve learned that Valero would also like to ship volatile Bakken crude oil, taken from fracking facilities in North Dakota and the Upper Midwest, on these trains. Bakken oil has proven different from most other crude, based on the eight accidents since July 2013 involving derailed trains that carried Bakken oil and resulted in massive fires and explosions. Several explosive train derailments have also been loaded with diluted tar sands crude.

Benicians have also learned much more about the trains themselves. Now we know how weak the train cars are, and how the federal government has established new rules that give industry years to strengthen them. Old DOT-111 tank cars still roll down our tracks. Updated — but still highly inadequate — DOT-1232 cars continue to roll, and retrofits of the older cars are to be spread out over the next decade. The railroads circumvent reporting requirements on their shipments to our state and county emergency responders by assembling trains that carry less than a million gallons of crude oil. And even when everything else goes right, aging railroad ties and rails will break, bridges will fail, and there aren’t enough inspectors. The accidents will continue.

Americans are sick of seeing the huge balls of fire on TV. We pray that the next BIG ONE will not be in a highly populated area — but we can’t reasonably pray there will be no next BIG ONE. It’s a matter of when, not if.

Finally, even if all the public safety issues could be solved, Valero’s proposal does far more harm to the environment than the company would have us think. Beginning at the source, production of these North American “extreme crudes” is beyond ugly: oil companies strip and gouge and pollute the soil, destroy wildlife habitat and contribute to soaring cancer rates in human communities. They foul the social fabric of small towns and farming communities with a disruptive boom-and-bust economy. Then come the trains, polluting the air from the upper Midwest all the way to Benicia, clattering over mountains and through gorgeous river passes and right through the hearts of our cities and towns, rattling and clattering near our schools, retirement villages, commercial and industrial centers and homes. In all this (if we give our permission), at every step along the way, the oil and rail industries contribute mightily to the warming of planet Earth.

Valero would like us to think that crude oil trains will save on air pollution by cutting back on the number of marine oil tankers. This may hold for a small region like the San Francisco Bay Area, but the city of Benicia’s own study showed that there would be “significant and unavoidable” impacts to air quality outside the Bay Area. Experts add that there would be “toxic plumes” all along the rail lines: “This thing called ‘crude shrinkage’ happens during transport, where entrained gases escape, leading to a 0.5- to 3-percent loss of crude oil. It’s a big problem for volatile crude oils like Bakken, and coupled with the high benzene levels found in some North American crudes (up to 7 percent) …we estimate over 100 pounds per day of excess benzene emissions from the Valero proposal in the Bay Area (or 1800 times more than the draft EIR reports),” said NRDC Senior Scientist Diane Bailey. Read her blog here: http://switchboard.nrdc.org/blogs/dbailey/valeros_promise_to_benicia_wel.html.

In short, oil trains are dangerous AND dirty.

The city of Benicia will release a revised draft environmental impact report on Valero’s proposal at the end of August. Everyone should stay tuned. Be prepared to study the document, read critical reviews, and share a comment with our Planning Commission. Together, we can make a difference.

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Cause of biggest oil-related spill on land ever in North America – Nexen Energy, Fort McMurray, Alberta

Repost from Reuters
[Editor:  See also:  Nexen pipeline may have been leaking for over two weeks.  Also: Alberta pipelines: 6 major oil spills in recent history.  – RS]

Nexen says may take months to pinpoint cause of Alberta pipeline spill

By Mike De Souza, Jul 22, 2015 6:40pm EDT

FORT MCMURRAY, Alberta  -  Finding the root cause of the oil-sands pipeline leak discovered earlier this month in northern Alberta, one of the biggest oil-related spills on land ever in North America, will likely take months, a senior Nexen Energy executive said on Wednesday. Nexen, a subsidiary of China’s CNOOC Ltd, is putting a higher priority on cleaning up the spill from its pipeline and investigating its cause than on restarting the Kinosis oil sands project where the spill took place, Ron Bailey, Nexen’s senior vice president of Canadian operations, said during a tour of the site.

Bailey said there were about 130 workers doing clean-up and investigation work at the site.

The leak in the double-layer pipeline spilled more than 31,500 barrels of emulsion, a mixture of bitumen, water and sand, onto an area of about 16,000 square meters (172,000 square feet).

“We’ve actually shut in everything at Kinosis and our priority is not to bring Kinosis back on production,” Bailey said. “We will be focusing on understanding the root cause of any failure here and the reliability of our systems before we ever start up this system again.”

The spill site, south of the oil sands hub of Fort McMurray, was detected on July 15 by a contractor walking along the pipeline route. Nexen has not determined when the leak started or why a new state-of-the-art leak detection system failed.

Bailey said leak likely occurred after June 29, when the pipeline was cleaned with water.

Nexen executives on Wednesday brought journalists to tour the site, which smells like tar, and where the company was using sound cannons to deter birds and other wildlife from becoming entangled in the gooey emulsion.

Nexen Chief Executive Fang Zhi personally apologized for the spill on Wednesday, echoing an apology by the company on Friday.

The Nexen leak was larger than the July 2010 rupture of an Enbridge Inc pipeline that spilled an estimated 20,000 barrels of crude, with some reaching Michigan’s Kalamazoo River.

The Nexen spill dealt another blow to the oil sands industry in Alberta, which is under fire from environmental groups and aboriginal communities for its carbon-intensive production process.

Extracting and processing heavy grade oil from the massive oil sands deposits in the Western Canadian province requires large amounts of energy and water.

(With additional writing by Jeffrey Hodgson; Editing by Peter Galloway)
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