Tag Archives: American Fuel and Petrochemical Manufacturers

THE BASICS: Why oil trains (don’t have to) explode: Everything you need to know

Repost from The Oregonian

Why oil trains (don’t have to) explode: Everything you need to know

By Rob Davis | April 02, 2015 at 1:22 PM
Oil Train Derailment Illinois
Smoke and flames erupt from the scene of an Illinois oil train derailment March 5, 2015. Safety experts say regulators have ignored steps that would make oil trains less likely to go off like a bomb when they derail. (AP/Jessica Reilly)

Crude oil was never supposed to explode.

Then a train pulling 72 cars of it derailed in a tiny town in Quebec in July 2013. The oil turned into a mushroom cloud of flame. It looked terrifying. Watch the first minute of this video:

Forty-seven people were killed that night.

Since then, eight more trains hauling oil have derailed and erupted in flames, drawing scrutiny to a new phenomenon: Crude oil, which once primarily moved in ships and pipelines, is being hauled around North America by rail in unprecedented volumes. More than a million barrels a day now move that way.

The federal government, which regulates train safety, has slowly moved to make oil trains more secure. Regulators are focusing on strengthening the tank cars carrying the oil.

But safety experts say regulators have ignored steps that would make oil trains less likely to go off like a bomb when they derail.

Depending on where it is produced, oil can be dark and thick or light and free flowing. Different amounts of highly flammable gases like propane and butane can be dissolved in it, affecting its volatility. (These are what your backyard gas grill uses.)

Much of the oil moving by rail comes from North Dakota. And what’s coming out of the ground there has been unusually volatile. North Dakota crude moving in Oregon contains far higher levels of propane than similar types of oil.

Some North Dakota crude has been more volatile than gasoline. So when the trains have derailed, the flammable gases within have fueled those sky-high fireballs.

That doesn’t have to happen.

Michael Eyer, a retired Oregon hazardous materials train inspector, said federal regulators could impose a cap on the amount of flammable gas allowed in the oil.

“You would have a fire,” Eyer said. “But you would not have the mushroom cloud in the sky.”

Producers can strip out those highly flammable gases before the oil is loaded for shipment. The process is called stabilization. North Dakota oil regulators estimate it would add $2 to the cost of every barrel.

Less volatile oil could still burn in a derailment, Eyer said. But nearby residents and firefighters responding to train accidents would be safer: Those fireballs don’t just shoot up. They spread, too.

State regulators in North Dakota have set the first ever limit to tame the most volatile crude. It went into effect April 1. It requires a less-intense treatment process that North Dakota regulators estimate will cost 10 cents per barrel.

But Eyer and a crude oil expert say the limit is too high to have widespread impact. The oil that exploded in Quebec in 2013, for example, wouldn’t have been affected.

Harry Giles is a retired federal official who used to oversee crude oil quality for the country’s Strategic Petroleum Reserve. He said North Dakota’s limit should be set lower.

“It would increase the safety and lessen the risk,” Giles said. “Fires would be less intense.”

Compare this fire during a May 2011 derailment northwest of Portland near Scappoose. That’s ethanol — pure grain alcohol — burning. It’s far less volatile than North Dakota crude.

The fire was still dangerous. But firefighters were able to get close enough to put water on the cars. That’s a fire hose spraying at the top of the photo.

Now see what happened after a December 2013 derailment with crude oil in North Dakota.

Look close. That’s a train down there at the bottom.

Stricter limits would reduce the dangers faced by millions of people who live next to rail lines nationwide, Eyer said.

That includes Oregonians like Jamie Maygra, a retired ironworker who lives in Deer Island, along the state’s primary oil train route. He said he worries about the oil’s volatility every time he drives near an oil train with his 2- and 3-year-old granddaughters.

He said he’s frustrated that neither industry nor safety regulators have moved faster to keep people like his granddaughters safe.

“I think about that all the time,” Maygra said. “The chances of that happening are slim, but it’s a lot more with this oil. They don’t care about nothing but money. That’s what’s aggravating. They put profit before people.”

Federal safety regulators say they’re studying what makes the oil so flammable and what could be done. Tim Butters is the administrator of the Pipeline and Hazardous Materials Safety Administration, the federal agency with authority to set limits. He recently told a Congressional committee his agency, known as PHMSA, is looking at ways to remove flammable gases from crude.

But the methods for doing that are already well known. They’re currently used in Texas oil fields, where flammable gases are separated and piped to nearby plants.

Eyer said the agency should move faster.

“The industry needs to figure out what the hell this stuff is and regulators need to say ‘We’re going to act now,’ ” he said. “How many rivers on fire and deaths are needed? What is the price?”

If federal regulators forced North Dakota producers to emulate what happens in Texas, those producers would have to burn or ship the gases they stripped from the oil. Currently, though, North Dakota does not have enough pipelines to move those flammable gases nor a market for them.

Susan Lagana, a PHMSA spokeswoman, said her agency is concerned about the volatility of oil moving by rail. But research is needed to determine exactly what makes the explosions so severe, she said, and what could be done to minimize them.

Eyer and Giles agreed that North Dakota’s volatility limits were too high, but they didn’t agree about what the right level is.

“That’s what we need to know,” Lagana said. “We are willing to consider all options to address making the product safer in transportation.”

The relevant research, being done by the federal Energy Department, should be finished this summer, Butters told Congress. But he didn’t promise any next steps once it’s done.

In the meantime, allowing producers to leave those flammable gases in the oil gives them more profit, allowing them to slightly bulk up the volumes they ship. It’s one reason the oil industry is fighting suggestions to stabilize North Dakota oil.

Don’t blame the oil for explosions, the industry argues. Blame the derailing trains.

“Keeping the trains on the tracks is the only way to ensure that crude… will be transported in the safest possible manner,” Charles Drevna, president of American Fuel and Petrochemical Manufacturers recently wrote.

Solely focusing on tank cars and trains “is not enough,” Eyer said. “The starting point is always what are you putting into the car?”

A bill introduced recently in the U.S. Senate by Democratic Sens. Patty Murray, Maria Cantwell, Dianne Feinstein and Tammy Baldwin proposes limiting the volatility of oil moving by rail. They want the rules in place within two years.

It’s a sign that political leaders have realized the North Dakota oil poses unique risks that could be reduced. A spokeswoman for Sen. Ron Wyden, D-Oregon, said he is tracking the issue and continues talking to federal transportation officials to find ways to address it.

Share...

    Environmentalists play ‘Whac-A-Mole’ to stall crude-by-rail projects

    Repost from Environment & Energy Publishing (EEnews.net)

    Environmentalists play ‘Whac-A-Mole’ to stall crude-by-rail projects

    By Ellen M. Gilmer and Blake Sobczak, March 20, 2015
    (Second of two stories. Read the first one here.) [Subscription required]

    When an oil company’s expansion plans for Pacific Northwest crude by rail suffered a major setback last month, environmentalists spread the news just as quickly as they could Google “Skagit County Hearing Examiner.”

    The little-known local office about an hour north of Seattle holds the keys to land use in the area, and environmental attorneys saw it as the best shot to stall a rail extension considered critical for the delivery of crude oil to a nearby Shell Oil Co. refinery, but potentially disastrous for nearby estuaries and communities.

    The effort was successful: After environmental groups appealed a county-level permit for the rail project, Skagit County Hearing Examiner Wick Dufford sent the proposal back to the drawing board, ordering local officials to conduct an in-depth environmental impact statement to consider the broad effects of increased crude-by-rail throughout the county.

    “The environmental review done in this case assumes that the whole big ball of federal, state and local regulations will somehow make the trains safe. And that if an accident happens, the response efforts described on paper will result in effective clean up, so that no significant adverse effects are experienced,” Dufford wrote. “There is no proven basis for such conclusions.”

    The decision was an incremental but significant victory for environmental groups, sending a signal to industry that its increasing reliance on railed-in crude could face formidable hurdles.

    Skagit County is just one piece of a larger plan to expand crude-by-rail across the country to better connect refineries and ports with prolific oil plays like North Dakota’s Bakken Shale. The use of rail to deliver crude oil has skyrocketed in recent years, rising from 9,500 tank cars of crude in 2008 to nearly 500,000 carloads in 2014, according to industry data. Projects in Washington and other refinery hubs aim to expand facilities and extend rail spurs to handle even more crude deliveries.

    Shell spokesman Curtis Smith said the company is “confident that we can satisfy any remaining issues associated with the project” to add rail capacity to its Puget Sound Refinery in Skagit County.

    “This project is critical to the refinery, the hundreds of employees and contractors who depend on Shell, and the regional economy,” he said. “We do not feel it should be held to a different standard than the crude-by-rail projects of the neighboring refineries that have been approved.”

    Smith added that “we all share the top priority of safety.”

    But the new reality of crude-by-rail traffic has environmentalists on edge. Oil train derailments in Illinois, West Virginia, North Dakota and other places have led to fires, spills and, in one case, lost lives. A 2013 crude-by-rail explosion in Lac-Mégantic, Quebec, killed 47 people, prompting regulators in the United States and Canada to review the inherently piecemeal rules governing crude-by-rail transportation.

    The federal government has authority over certain details, such as standards for tank cars used to haul crude. But most expansion plans and related environmental concerns are left to local agencies situated along oil routes. The result is a hodgepodge of permitting decisions by local authorities following varying state laws, while a team of environmental lawyers challenges expansion projects one by one.

    “It’s a little bit like Whac-A-Mole because there isn’t a big permitting scheme,” said Earthjustice attorney Kristen Boyles, who represented six environmental groups in the Skagit County appeal. “It makes it difficult and makes it frustrating for the public.”

    State laws in play

    So far, the Whac-A-Mole approach is working well for environmentalists.

    After three oil refineries in Washington went unopposed in building facilities to receive rail shipments of crude oil, Boyles said environmentalists and community advocates began tracking local land-use agencies more closely.

    Earthjustice and the Quinault Indian Nation successfully challenged two proposed crude projects in Grays Harbor County, southwest of Seattle, leading a review board to vacate permits and require additional environmental and public health studies. A third Grays Harbor project is also preparing a comprehensive environmental review.

    The next project on environmentalists’ radar is in Vancouver, Wash., just across the Columbia River from Portland, Ore., where Savage Cos. and Tesoro Refining and Marketing Co. have proposed building a new terminal to transfer railed-in crude oil to marine tankers bound for West Coast refineries. The Sierra Club, ForestEthics and several other groups earlier this month moved to intervene in the state agency review process for the project, citing major threats to the Columbia River and public health.

    The key to all of these challenges is Washington’s State Environmental Policy Act (SEPA). Similar to the National Environmental Policy Act, SEPA requires government agencies to conduct a broad environmental impact statement for any major actions that may significantly affect the environment.

    For projects in Skagit County, Grays Harbor and now Vancouver, state and local officials considering challenges look to SEPA to determine how rigorous environmental review must be, based on whether projects are expected to have major impacts. To Dufford, the Skagit examiner, the answer is plain.

    “Unquestionably, the potential magnitude and duration of environmental and human harm from oil train operations in Northwest Washington could be very great,” he wrote.

    Down the coast in California, environmentalists have an even stronger tool: the California Environmental Quality Act. Considered the gold standard in state-level environmental protection laws, CEQA has already proved useful in halting a crude-by-rail expansion project in Sacramento.

    In Kern County, a team of environmental attorneys is also relying on CEQA to appeal construction permits for the Bakersfield Crude Terminal, a project that would ultimately receive 200 tank cars of crude oil per day. The local air quality board labeled the construction permits as “ministerial,” bypassing CEQA review, which is required only for projects considered discretionary. A hearing is set for next month in Kern County Superior Court.

    Earthjustice attorney Elizabeth Forsyth, who is representing environmental groups in the Bakersfield case, said the state environmental law has been powerful in slowing down the rapid rise of crude-by-rail operations.

    “In California, we have CEQA, which is a strong tool,” she said. “You can’t hide from the law. You can’t site your project out in some town that you think won’t oppose you.”

    Unified strategy?

    Still, the one-at-a-time approach to opposing crude-by-rail growth is undoubtedly slow-going, and progress comes bit by bit.

    Boyles noted that Earthjustice attorneys from Washington to New York frequently strategize to “unify” the issues and make broader advances. On tank cars, for example, environmental groups have come together to press the Department of Transportation to bolster safety rules.

    “That at least is some place where you could get improvements that could affect every one of these proposals,” she said.

    But for expansion projects, the effort must still be localized.

    “You have this giant sudden growth of these sort of projects, and that’s the best we can do at this point to review each of them and comment,” said Forsyth, the California lawyer, who said the end goal is to empower local agencies to control whether proposals move forward and to mitigate the impacts when they do.

    Though labor-intense, advocates say the approach has paid dividends. Projects that would have otherwise flown under the radar are now under rigorous review, and industry players no longer have the option of expanding facilities quietly and without public comment.

    “If you hadn’t had these citizens challenging these projects,” Boyles said, “they’d be built already; they’d be operating already.”

    The delays have set back refiners seeking to use rail to tap price-advantaged domestic crude — particularly in California.

    “The West Coast is a very challenging environment,” noted Lane Riggs, executive vice president of refining operations at Valero Energy Corp., which has faced staunch environmentalist opposition at a proposed oil-by-rail terminal in Benicia.

    Riggs said in a January conference call that “we’re still pretty optimistic we’ll get the permit” for the 70,000-barrels-per-day unloading terminal at its refinery there, although he added that “timing at this point is a little bit difficult.”

    Facing pressure from concerned locals and the Natural Resources Defense Council, Benicia officials last month opted to require updates to the rail project’s draft environmental impact review, further delaying a project that was originally scheduled to come online in 2013.

    A Phillips 66 crude-by-rail proposal in San Luis Obispo County, Calif., has encountered similar pushback. If approved, the project would add five 80-car oil trains per week to the region’s track network. The potential for more crude-by-rail shipments has drawn opposition from several local city councils and regional politicians, despite Phillips 66’s pledge to use only newer-model tank cars (EnergyWire, Jan. 27).

    Some town leaders have also separately taken action against railroads bringing oil traffic through their neighborhoods, although federally pre-emptive laws leave cities vulnerable to legal challenges (EnergyWire, March 19).

    ‘Business as usual’

    Local, often environmentalist-driven opposition is seen as “business as usual” within the refining industry, according to Charles Drevna, president of the American Fuel and Petrochemical Manufacturers.

    “This is just another extension of the environmental playbook to try to obfuscate and delay,” said Drevna, whose trade group represents the largest U.S. refiners. “We’ve been dealing with that for years, and we’re going to continue to be dealing with it.”

    While Drevna said he doesn’t see lawsuits “holding up any of the plans” for refiners to improve access to North American oil production, environmentalists chalk up each slowdown to a victory.

    In New York, a plan to expand a key crude-by-rail conduit to East Coast refiners has been held in limbo for over a year at the Port of Albany, owing to an environmentalist lawsuit and closer public scrutiny.

    The proposal by fuel logistics firm Global Partners LP would have added a boiler room to an existing facility to process heavier crude from Canada. But advocacy groups including Riverkeeper have challenged the company’s operating air permit, calling for more review by New York’s Department of Environmental Conservation (EnergyWire, Jan. 13, 2014).

    “All of the actions we’ve taken with Earthjustice and others have really ground to a halt DEC’s repeated approvals of these minor modifications,” said Kate Hudson, watershed program director for Riverkeeper. “We have not seen tar sands. … The river has been spared that threat for a year-plus, at this point.

    “We certainly have no regrets,” she said.

    Share...

      Oil industry study: Don’t worry, be happy…

      Repost from Prairie Business Magazine
      [Editor: First the oil industry wants us to believe that Bakken crude oil is no more volatile than other light sweet crudes.  Then at the end of the report, they recommend “highest-risk” labeling on train cars carrying the stuff.  Go figure….  – RS]

      Oil industry group study says Bakken, other light crude oils similar

      By: Kathleen J. Bryan, August 5, 2014

      BISMARCK – A final report on Bakken crude released Monday by the North Dakota Petroleum Council will be presented to the North Dakota Industrial Commission on Wednesday.

      The study was done in response to two train derailments last year in which railcars carrying Bakken crude ended in violent explosions. One derailment and explosion in Quebec killed 47 people. Another explosion occurred just outside Casselton, N.D.

      The final report confirms preliminary results of the Bakken Crude Characteristics Study, which found that Bakken crude is similar to other North American light, sweet crudes and does not pose a greater risk to transport by rail than other crudes and transportation fuels, the NDPC said in a statement.

      “This study provides the most thorough and comprehensive analysis of crude oil quality from a tight oil production basin to date,” John Auers, executive vice president of Turner, Mason & Co., the engineering firm commissioned to conduct the study, said in a news release.

      In addition to confirming the initial findings presented in May, the final report also detailed best practices for field operations to ensure consistent operation of treating equipment, Bakken crude oil quality and testing procedures and shipping classification.

      In addition to recommended best practices and analysis of the final results from sampling and testing, the final report also compares analysis from other studies on Bakken crude, including a study commissioned by the American Fuel & Petrochemical Manufacturers and the federal Transportation Pipeline and Hazardous Materials Safety Administration.

      “The test results from this study are consistent with scientific data reported by the AFPM and PHMSA,” Petroleum Council Vice President Kari Cutting said. “All of this data does not support the speculation that Bakken crude is more volatile or flammable than other light, sweet crudes.”

      The full report is available at http://www.ndoil.org/image/cache/NDPC_Bakken_Crude_Study_-_Final_Report.pdf.

      Share...

        Safety board chairman says oil train dangers extend beyond crude from the Bakken

        Repost from The Associated Press

        APNewsBreak: Oil train dangers extend past Bakken

        By Matthew Brown, Associated Press, Jun 26, 2014
        AP Photo
        AP Photo/Matt Brown

        BILLINGS, Mont. (AP) — The dangers posed by a spike in oil shipments by rail extend beyond crude from the booming Bakken region of the Northern Plains and include oil produced elsewhere in the U.S. and Canada, U.S. safety officials and lawmakers said.

        Acting National Transportation Safety Board Chairman Christopher Hart said all crude shipments are flammable and can damage the environment – not just the Bakken shipments involved in a series of fiery accidents.

        Hart cited recent derailments in Mississippi, Minnesota, New Brunswick and Pennsylvania of oil shipments from Canada. He said those cases exemplify “the risks to communities and for the environment for accidents involving non-Bakken crude oil.”

        Hart’s comments were contained in a letter to U.S. Sens. Ron Wyden and Jeff Merkley obtained by The Associated Press. They add to growing pressure on federal regulators to improve oil train safety in the wake of repeated derailments, including in Lac-Magentic, Quebec, where 47 people were killed in a massive conflagration last July.

        Citing the highly volatile nature of Bakken oil, Transportation Secretary Anthony Foxx last month ordered railroads to notify states of shipments from the region so firefighters and first responders can better prepare for accidents.

        But Wyden and Merkley told Foxx on Thursday that the order leaves emergency personnel in the dark on oil shipped from outside the Bakken region.

        The Oregon Democrats urged Foxx to expand his order to cover crude from all parts of the U.S. and Canada. They also pressed for the 1 million-gallon minimum threshold in Foxx’s order to be lowered to include smaller shipments.

        “With the exception of the Lac-Megantic accident, every accident involving crude oil, ethanol and other flammable materials since 2006 has resulted in a hazardous materials release of less than 1,000,000 gallons,” Wyden and Merkley wrote to Foxx in a letter.

        They said the derailments cited by the transportation safety board show that trains carrying non-Bakken crude or less than 1 million gallons pose the same “imminent hazard” that Foxx has asserted for Bakken oil.

        Bakken oil on average travels more than 1,600 miles to reach its destination, transportation officials said. That’s much further than oil from some other parts of the country.

        U.S. transportation officials said the lengthier journey increases the overall risk exposure for Bakken oil – and is one reason it’s being treated differently than other hazardous cargos.

        Representatives of the oil industry and officials in North Dakota also have complained about Bakken oil being singled out by regulators – although for opposite reasons. The American Petroleum Institute and American Fuel and Petrochemical Manufacturers have argued Bakken oil is no more volatile than other light, sweet crudes.

        The concerns aired Thursday by the NTSB and Oregon senators essentially flip that argument on its head, to say different types of crude and other hazardous liquids such as ethanol also pose a significant safety risk.

        “Accidents involving crude oil or flammable liquids of any kind, especially when these liquids are transported in large volumes, such as in unit trains or blocks of tank cars, can have disastrous consequences,” Hart said.

        Association of American Railroads spokeswoman Holly Arthur said the rail industry is complying with Foxx’s original order. She said the group would have to see the specifics of any proposed changes before commenting further.

        About 700,000 barrels of oil a day – enough to fill 10 “unit trains” of 100 tank cars each – is coming out of the Bakken by rail, according to the North Dakota Pipeline Authority. That’s about 70 percent of crude-by-rail shipments nationwide, according to federal officials.

        Yet the same hydraulic fracturing – or “fracking” – technology that has helped drive the boom in the Bakken region during the past decade is being employed on shale oil fields elsewhere. Crude from the tar sands of western Canada is also fueling the surge in North American production.

        Charles Drevna, president of American Fuel and Petrochemical Manufacturers, said he supports getting more information on oil trains to first responders so they’re ready for potential accidents.

        According to an analysis done for the U.S. State Department, more than half the loading capacity of oil train facilities built in recent years is in parts of the U.S. and Canada outside the Bakken region. That includes loading terminals in Colorado, Ohio, Oklahoma, Texas, Wyoming, New Mexico, Utah and parts of western Canada.

        Share...