Tag Archives: American Petroleum Institute

Bakken Crude, Crude By Rail, DOT-111, Ethanol, Federal Regulation (U.S.), Train speed

DOT proposes stricter oil train safety rules

Repost from Politico

DOT proposes stricter oil train safety rules

By Kathryn A. Wolfe  | 7/23/14
Anthony Foxx is pictured. | M.Scott Mahaskey/POLITICO
Anthony Foxx’s announcement follows a year-long spree of oil train crashes. | M.Scott Mahaskey/POLITICO

The Obama administration on Wednesday announced its long-awaited proposal to improve the safety of oil trains, a step meant to address a series of fiery derailments that have raised fears about the dark side of the North American energy boom.

The proposed rules include mandates for phasing out older, less-sturdy rail tank cars during the next two to five years, tightened speed limits, improved brakes and steps to address concerns that crude oil produced in North Dakota’s Bakken region is unusually volatile or flammable. The rules also include provisions that would affect the shipment of ethanol, another flammable liquid frequently transported by rail.

“We need a new world order on how this stuff moves,” Transportation Secretary Anthony Foxx told reporters in making the announcement.

“More crude oil is being shipped by rail than ever before,” Foxx said. “If America is going to be a world leader in producing energy, our job at this department is to ensure that we’re also a world leader in safely transporting it.”

The details of the White House-vetted proposal had been the subject of fierce lobbying by the oil industry, which maintains that Bakken crude doesn’t pose unusual dangers, and the railroads, which have long called for tougher tank-car standards but objected to calls for reduced speed limits. The rules would offer both industries incentives to go along — for instance, oil trains meeting the toughened standards for crashworthiness and brakes could travel as fast as 50 mph in all areas, while those that don’t could be limited to 30 mph or 40 mph.

“The fact that the proposed rule incorporates several of the voluntary operating practices we have already implemented demonstrates the railroad industry’s ongoing commitment to rail safety,” Ed Hamberger, CEO of the Association of American Railroads, said in a statement Wednesday. “We look forward to providing data-driven analyses of the impacts various provisions of the proposal will have on both freight customers and passenger railroads that ship millions of tons of goods and serve millions of commuters and travelers across the nationwide rail network every day.”

The American Petroleum Institute initially said it would review the proposal, but it later blasted out a statement rejecting “speculation by the Department of Transportation” about the safety of transporting Bakken crude.

“Multiple studies have shown that Bakken crude is similar to other crudes,” CEO Jack Gerard said. “DOT needs to get this right and make sure that its regulations are grounded in facts and sound science, not speculation.”

The DOT proposal drew initial praise from lawmakers, along with some calls to go further.

Wednesday’s rollout followed months of interim rules and voluntary agreements with the railroad and oil industries. It also came after a year-long spree of oil train crashes in communities from Quebec and North Dakota to western Pennsylvania, rural Alabama and Lynchburg, Virginia — including one that killed 47 people in the Canadian town of Lac-Mégantic last July.

Even without any fatalities so far in the U.S., oil train accidents in 2014 have already shattered records for property damage, based on POLITICO’s review of data from the federal Pipeline and Hazardous Materials Safety Administration. As of late May — a month after the Lynchburg derailment — the damage toll exceeded $10 million through mid-May, nearly triple the damage for all of 2013. The number of incidents at that point in the year — 70 — was also on pace to set a record.

Oil trains have also inspired local opposition in communities from Albany, New York, to Washington state and the San Francisco Bay area, where residents expressed alarm at finding that they had become key way stations in a network of virtual pipelines that carry oil from production hot spots like North Dakota and western Canada.

Sen. Chuck Schumer (D-N.Y.) urged DOT to see that the rules are “finalized, implemented and enforced as soon as possible.”

“These desperately needed safety regulations will phase out the aged and explosion-prone … tanker cars that are hauling endless streams of highly flammable crude oil through communities across the country and New York,” Schumer said in a statement Wednesday.

Sen. John Hoeven (R-N.D.) said the proposal “appears to be comprehensive,” adding that “we will continue to review these proposed standards to ensure they are workable and will keep our communities safe.”

But Sen. Patty Murray (D-Wash.) who chairs the Appropriations subcommittee overseeing DOT, said in a statement that “there is still more work to be done, by both regulators and industry.”

“I’m pleased that the proposed regulations address issues I outlined in the 2015 transportation spending bill, like enhanced rail tank car standards and improved classification of flammable liquids, that are much-needed steps to improve the safety of our rail system,” Murray said.

Bakken Crude, CPC-1232 standard, DOT-111, Federal Regulation (U.S.), Volatile gases

Fox Guarding Henhouse: Oil-By-Rail Standards Led by American Petroleum Institute

Repost from DeSmogBlog

Fox Guarding Henhouse: Oil-By-Rail Standards Led by American Petroleum Institute

By Justin Mikulka, July 9, 2014

“How did it get missed for the last ten years?”

That was the question Deborah Hersman, chair of the National Transportation Safety Board (NTSB), posed to a panel of industry representatives back in April about how the rail industry had missed the fact that Bakken oil is more explosive than traditional crude oil.

“How do we move to an environment where commodities are classified in the right containers from the get go and not just put in until we figure out that there’s a problem,” Hersman asked during the two-day forum on transportation of crude oil and ethanol. “Is there a process for that?”

The first panelist to respond was Robert Fronczak, assistant vice president of environmental and hazardous materials for the Association of American Railroads (AAR). His response was telling.

“We’ve know about this long before Lac-Megantic and that is why we initiated the tank car committee activity and passed CPC-1232 in 2011,” Fronczak replied, “To ask why the standards are the way they are, you’d have to ask DOT that.”

So, now as the new oil-by-rail safety regulations have been sent from the Department of Transportation (DOT) to the White House’s Office of Information and Regulatory Affairs, it seems like a good time to review Hersman’s questions.

How did we miss this? Is there a process to properly classify commodities for the right container before they are ever shipped?

Missed or Ignored?

Fronczak stated that industry knew about the explosive danger of Bakken crude long before the Lac-Megantic disaster, but it was up to the Department of Transportation to do something about it. That begs the question: what did the department know?

In a letter sent by Thomas J. Herrmann of the Federal Railroad Administration (a division of DOT) to the American Petroleum Institute’s CEO Jack Gerard on July 29, 2013, just 23 days after the Lac-Megantic disaster, it would appear the DOT was well aware of Bakken crude classification issues.

FRA audits of crude oil loading facilities indicate that the classification of crude oil being transported by rail is often based solely on Material Safety Data Sheet (MSDS) data that only provides a material classification and a range of material properties. This MSDS information is typically provided by the consignee to the shipper, and the shipper is unaware of validation of the values of the crude oil properties.

FRA‘s audits indicate that MSDS information is not gleaned from any recently conducted tests or from testing for the many different sources (wells) of the crude oil. For example, a shipper provided information to FRA showing that crude oil being transported by rail had a flash point of 68° F, or a Packing Group I hazardous material. However, the crude oil had been improperly classified as a Packing Group III material and was being transported in AAR class tank cars that were not equipped with the required design enhancements.

The letter goes into detail on several other issues with Bakken crude and recommends that “shippers evaluate their processes for testing, classifying, and packaging the crude oil that they offer into transportation via railroad tank cars.”

So it is clear that as of July 2013, the Federal Railroad Administration was well aware of issues regarding misclassification of Bakken crude oil based on its own audits.

Several of the panellists at the NTSB hearing in April made the point that Bakken crude was different.

“We are just not sure what we’re handling,” Fronczak said. “We’ve done some minor sampling, you know a few samples that indicate that the crude oil does have a high vapor pressure and a fairly high amount of dissolved gas and so we feel a pressure car is more appropriate.”

A pressure car is currently the safest possible tank car the new regulations could require.

William Finn of the Railway Supply Institute echoed this sentiment, “For years we’ve transported crude oil in one eleven cars [DOT-111], what’s changed here is the introduction of the unit train and the question of what’s happening with the Bakken crude oil and the high vapor pressures.”

Greg Saxton, chief engineer for tank car manufacturer Greenbrier Companies, said: “The crude we are moving today, we think its different than what we were moving five or ten years ago.”

If the exploding trains weren’t enough to convince people that the Bakken crude oil is different, those comments should remove any doubt.

API Concludes Bakken Oil Poses No “Special Risks”

In April, DOT Secretary Anthony Foxx commented to the Associated Press on how important proper crude oil classification was regarding oil-by-rail safety, saying,  “One of the most fundamental questions that cuts across everything in crude oil-by-rail is how it is classified.”

So who gave the presentation at the NTSB conference on classification of crude oil? The American Petroleum Institute.

Lee Johnson gave a presentation on the API’s current crude oil classification working group, which he stated, “is going to come up with the standard which is going to have guidance on how often you should do that [testing], what tests you should take, sampling techniques, lab techniques.  It’s going to be a very comprehensive standard.  At this point there is no industry standard.”

During his presentation, Johnson highlighted one of the main efforts of the API’s work on classification. The North Dakota Petroleum Council was hiring a firm to conduct testing on Bakken crude for classification purposes.

The results of that Bakken classification testing have since been released and were reported in the Wall Street Journal as follows:

Crude oil from the Bakken Shale formation doesn’t pose special risks to rail transport and shouldn’t require a separate classification regime than other hazardous liquids, North Dakota oil producers said.

This is what happens when you let an industry self-regulate. They make up their own rules and reality. In May, APICEO Jack Gerard made his position clear:

“It is essential to separate fact from fiction as we work to enhance the safe transportation of crude oil. Multiple studies have now debunked the idea that Bakken crude is meaningfully different than other crudes.”

However, not everyone was buying these results. New York’s Senator Chuck Schumer told Reuters that these test results should be “taken with a grain of salt.”

And the Canadian Crude Quality Technical Association said, “We would consider the data suspect.”

The main reason for the association’s suspicion is the sampling technique that was used. The samples were taken using open containers, which allow the volatile gases to escape before testing.

That’s the kind of thing that happens when there are no standards for sampling and testing.

The New Regulations

So as the new oil-by-rail safety regulations are about to be released by the White House, there still are no enforceable standards on how to properly sample, test and classify Bakken crude oil. The only testing data that’s been released up to this point is from the oil industry’s lobbying groups.

The Department of Transportation has taken samples of Bakken crude and conducted testing — however, the report on their results is still pending and there is no scheduled release date. It is nearly a year after the department’s initial letter to Jack Gerard of the American Petroleum Institute.

Further, the Department of Transportation is not ultimately responsible for developing new standards for testing and classifying crude oil.

To understand how the regulatory agency in charge of an industry is not responsible for developing these standards, you must look at the wording of legislation signed into law by President Bill Clinton in 1996 called “The National Technology Transfer and Advancement Act of 1995.”

This legislation essentially privatized the development of standards. The act states:

“All Federal agencies and departments shall use technical standards that are developed and adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities determined by the agencies and departments.”

So, for there to be new enforceable regulations regarding the classification of Bakken crude, several things would have to happen. An external standard developer like ASTM International would have to develop standards. Then members of industry or their lobbyists would have to volunteer to petition the DOT to adopt those standards as part of the regulations. This would require a new DOT rulemaking process separate from the one currently in progress, which could take several years.

A Fundamental Question Goes Unanswered

So, on the eve of new regulations, the fundamental question of how to properly sample and test Bakken crude oil for appropriate classification has not been answered. And the only group currently working on an “industry standard” for this is the American Petroleum Institute, which has already concluded that Bakken crude is no different from other crude oils  — at the same time API is having private meetings at the White House regarding the new regulations.

Chair Hersman resigned shortly after the forum in April, ending her 10-year career with the NTSB. At the time she told the AP she had, “seen a lot of difficulty when it comes to safety rules being implemented if we don’t have a high enough body count. That is a tombstone mentality. We know the steps that will prevent or mitigate these accidents. What is missing is the will to require people to do so.”

If the current process regarding new oil-by-rail regulations in the U.S. is any indication, apparently we haven’t achieved a high enough body count yet.

Bakken Crude, Crude By Rail, Massive increase in crude-by-rail, Oil train contents, Rail Safety, Tar sands crude

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.

Bakken Crude, Crude By Rail, Disclosure of tank car contents, Emergency Readiness & Response, Federal Regulation (U.S.), Rail routing, Tank car design, Tank car retrofit, U.S. Department of Transportation

Wall Street Journal: on the DOT’s nonbinding safety advisory

Repost from The Wall Street Journal
[Editor: Stakeholders, senators, and even the tank car builders say the feds haven’t gone far enough.  Significant quotes: “‘Making it voluntary is not going far enough,’ Sen. Maria Cantwell (D., Wash.) told Transportation Secretary” … “The trade association representing railcar builders and car-leasing companies said the advisory doesn’t go far enough toward new standards for tank-car construction and retrofitting the existing car fleet.”  – RS]

U.S. Urges Companies to Use Sturdier Tank Cars For Oil-Trains

The Advisory Effectively Applies to About 66,500 Shipping Containers
By Russell Gold  |  May 7, 2014

U.S. safety regulators urged companies shipping crude oil from North Dakota to stop using tank cars that have been implicated in fiery accidents.

The Transportation Department’s nonbinding safety advisory, which carries less weight than an emergency order, said shippers should use the sturdiest cars in their fleets to transport crude from the Bakken shale.

The advisory effectively applies to about 66,500 tank cars—68% of the total commonly used to transport oil and other flammable liquids. Shippers instead should use the roughly 31,000 cars that have been retrofitted to improve safety or were built to higher standards.

The call to get the older tanker cars off the rails drew immediate criticism as too weak.

“Making it voluntary is not going far enough,” Sen. Maria Cantwell (D., Wash.) told Transportation Secretary Anthony Foxx at a Senate Commerce Committee hearing. Mr. Foxx assured her that the federal government was moving as quickly as possible to issue new rules.

The American Petroleum Institute said the industry had been working to upgrade tank cars for three years, and that during the next year “about 60% of railcars will be state-of-the- art, which is part of a long-term comprehensive effort to improve accident prevention, mitigation and emergency response.”

The trade association representing railcar builders and car-leasing companies said the advisory doesn’t go far enough toward new standards for tank-car construction and retrofitting the existing car fleet.

“With regulatory certainly, the car industry can get working” on retrofits right away, said Thomas Simpson, president of the Railway Supply Institute in Washington, D.C.

Calling Bakken crude shipments “an imminent hazard,” the agency also issued an emergency order Wednesday requiring railroads operating trains carrying more than one million gallons of Bakken crude the oil—about 35 carloads—to notify state officials about the movement of these trains. Trains transporting oil typically include at least 100 cars.

Railroads haven’t historically liked to disclose the routes or contents of their hazardous-material shipments even to the communities they travel through. But the Association of American Railroads, which represents the country’s big freight railroads, said its members will “do all they can to comply with the Transportation Department’s Emergency Order.”

State and local officials have complained that they haven’t been told about crude shipments, which have been rising rapidly. About 715,000 barrels of Bakken crude are being shipped by rail each day, according to the North Dakota Pipeline Authority, or almost 10% of all the oil pumped in the U.S.

A spokesman for  Berkshire Hathaway Inc. ‘s BNSF Railway said it routinely provides information to interested state agencies and emergency responders about the hazardous materials on its routes. He said BNSF also “believes that promulgation of a federal tank-car standard will provide much needed certainty for shippers and improved safety and response time for all first responders.”

The Canadian Transport Ministry last month gave railcar owners 30 days to stop using the roughly 5,000 least crash-resistant tank cars.

Regulators have been grappling with the rising amounts of crude oil being shipped across the country. A fiery derailment in Quebec last summer killed 47 people; more recently, crashes and derailments in Alabama, North Dakota and Virginia have involved fire and explosions.

Federal investigators suspect that crude from the Bakken shale is more combustible than oil from other regions.

A Wall Street Journal analysis in February found that Bakken oil was very flammable and contained several times the level of combustible gases as oil from elsewhere.

The Bakken oil field has grown quickly, producing more than a million barrels a day and outpacing the capacity of pipelines. Companies have increasingly relied on railroads to transport the oil to refineries on the coasts.

In February, railroads said they would slow down oil trains to no more than 40 miles an hour in urban areas and try to route these trains around high-risk areas. But a crude train that derailed in Lynchburg, Va., last week was traveling at only 24 miles an hour. Its cargo didn’t explode, but leaking oil burned in the James River.

—Betsy Morris and Bob Tita contributed to this article