Tag Archives: Burlington Northern Santa Fe Railroad (BNSF)

Oil Train Insurance: Washington State and the Billion Dollar Disaster

Repost from STAND

Oil Train Insurance: Washington State and the Billion Dollar Disaster

By Alex Ramel, extreme oil campaign field director, March 28, 2016

WA Dept of Ecology

Washington is now one of only two states that requires railroads to disclose whether they have sufficient insurance to cover a “reasonable worst case spill.” This is a step in the right direction. But the new rule falls far short of requiring enough insurance to cover a catastrophic oil train derailment, spill and explosion.

The new State rule requires that any major rail company operating in Washington — today, only BNSF — report whether they have sufficient financial resources or insurance to cover the costs of an oil train spill of around $700 million (smaller railroads have smaller requirements). That’s better than nothing, which is what most states have. But it’s not nearly enough.

The deadly Lac Megantic oil train disaster cost more than $1 billion (see page 98 in the federal regulations) and the cost of rebuilding is more like $2.7 billion. As terrible as the Lac Megantic disaster was, and it was a heartbreaking catastrophe, a worst case oil train disaster in Washington could be even much worse.

Washington State’s failure to require railroads to pay the full and true cost of doing business in Washington is an even greater concern if it becomes a precedent in other states. The confusing, undefined phrase “reasonable worst case” appears to have already been copied into a proposed bill in the New York State Assembly.

The federal Pipeline and Hazardous Materials Safety Administration suggested that a disaster inside a major city could cost $12.6 billion (see page 110). What could a $12 billion derailment look like? BNSF runs oil trains within 20 yards of Safeco Field in downtown Seattle during Mariners games when fans are in the stands.

Insurance monetizes risk, assigning a direct cost to risky behavior and assigning financial value to safety. What would your homeowners insurance company do if you wanted to unload oil tanker trucks in your driveway? They would raise your rates (astronomically) or cancel your policy. Railroads, which operate without requirements to carry adequate insurance, make decisions about assuming risk without an important financial feedback loop. If railroads had to be properly insured for the risk to life, property, and the environment from oil trains, there would be far fewer or zero oil trains.

Last year BNSF was fined for 14 spills and leaks and for failing to report problems along the track in Washington. The summer before that three oil tank cars tipped over in downtown Seattle. Over the last two years four BNSF oil trains have derailed and either spilled or exploded in Casselton, ND, Galena, IL, Heimdal, ND, and Culbertson, MT. Under usual circumstances a safety record like that should lead to a very awkward conversation with an insurance agent. And an already expensive, high-risk policy should get even more expensive. But BNSF doesn’t seem to carry enough insurance to cover the real cost of an oil train disaster, and they don’t seem to care.

BNSF has already intimated that they don’t think that the state should be able to require insurance, and it is likely that the company will challenge the rule. The railroad wants the cost of insurance and the calculation of possible damages kept off of their books. That means that in addition to living with the risk, the public is also asked to shoulder the cost. That’s the most unreasonable proposition yet.

Please share!

Washington State rail regulators to Fine BNSF for not reporting leaks immediately

Repost from The Bellingham Herald

State rail regulators: Fine BNSF for not reporting leaks immediately

By Samantha Wohlfeil, March 19, 2015 
Ferndale Siding  PAD

BNSF rail cars on the railroad siding in Custer, Friday Aug. 22, 2014. The railroad is building a new siding from Ferndale to Custer. PHILIP A. DWYER — The Bellingham Herald

Washington state regulators have recommended BNSF Railway be fined up to $700,000 for failing to properly report more than a dozen hazardous materials spills in recent months despite the fact state staff had reminded the company how to do so last fall.

On Thursday, March 19, the state Utilities and Transportation Commission staff announced it found BNSF had failed to report 14 releases of hazardous materials, including crude oil leaks, within a half hour of learning about the leaks, as required by state law.

In one case, crews at BP Cherry Point refinery found crude oil had leaked onto the sides and wheels of a tank car, which was found to be 1,611 gallons short. That was on Nov. 5, but the UTC didn’t find out about it until Dec. 3, when it got a copy of the report BNSF sent to the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration. Railroads have 30 days to file that type of report.

When contacted about the incident by a McClatchy reporter in January, BNSF said the train was “not in transit, not on our property and not in our custody” when the spill was detected, and the company had submitted the required reports to state and federal regulators.

In another case from Jan. 12 and 13, a train hauling 100 cars of Bakken crude oil from North Dakota to the Tesoro refinery in Anacortes had more than a dozen leaking cars discovered in multiple stops as it crossed the state.

Although the UTC sent an investigator to look at the leaking cars as part of a Federal Railroad Administration investigation, BNSF didn’t report the incident to the state’s 24-hour hotline at the Emergency Management Division until two weeks later. The hotline duty officer is in charge of alerting the various state agencies that might need to respond to a spill.

When asked by The Bellingham Herald in February why the January incident was reported more than a week later, BNSF spokeswoman Courtney Wallace replied that BNSF staff members thought they were following proper protocols, and had amended their Washington reporting policy following discussions with the UTC in January.

But the investigation released by the UTC on Thursday shows that on Oct. 22, 2014, the UTC had emailed a copy of the state’s reporting requirements to Patrick Brady, BNSF’s director of hazardous materials and special operations, in an effort to make sure BNSF knew how to report accidents.

As copied into the body of the Oct. 22 email to Brady, the state law regulating accident reports ( WAC 480-62-310) lists the hotline number, which types of incidents must be reported, and states that railroad companies must call within 30 minutes of learning of the event.

On Dec. 3, Brady emailed the UTC again asking, “Can you send me the regulatory reference to spill notification to the UTC?” Staff members again emailed Brady the state law on reporting requirements, according to emails included in the investigation.

From Nov. 1, 2014, to Feb. 24, UTC staff found BNSF committed 700 violations of the reporting requirement. Every day an incident goes unreported counts as a separate violation, per state law.

In addition to the leaking crude oil incidents, the UTC announcement lists a variety of leaks that occurred throughout the state: a tank car dripping gas/oil from a bottom valve in Spokane Valley on Dec. 8, 2014; cars leaking “primary sludge” found in incidents in Seattle, Vancouver and Everett in December; two 100-gallon spills of lube oil from locomotives in December and January, among others.

The commission could opt to fine the company $1,000 per violation of the reporting law, but no fine has been issued yet. The commission will set a final penalty after BNSF gets the chance to have a hearing.

“When a company fails to notify the (state Emergency Operations Center) that a hazardous material incident has occurred, critical response resources may not be deployed, causing potential harm to the public and the environment,” the UTC announcement states.

BNSF was still reviewing the report when contacted for comment on Thursday.

“In regards to reporting releases in Washington state, we believed we were complying in good faith with the requirements from our agency partners,” BNSF’s Wallace wrote in a statement. “Following guidance from the UTC in January 2015, BNSF reviewed its reporting notification process and amended its practices to address concerns identified by the UTC. We will continue to work closely with the UTC moving forward on this issue.”

BNSF is the largest railroad company operating in Washington.

Please share!

Live TV news coverage: Galena derailment – video of fire and explosions

Repost from KWQC TV6, Davenport IA
[Editor: Good interview at Incident Command location with Galena City Administrator Mark Moran showing smoke plumes in the background.  Also separate video of explosions and a segment with ariel video showing crude oil and trees on fire.  - RS]

Train derails south of Galena, Ill.

By Jeff Whitten, March 5, 2015, 2:37 pm Updated: March 5, 2015, 6:16 pm

 GALENA, Ill. – (KWQC) – The Jo Daviess County Sheriff says a train has derailed south of Galena where the Galena River meets the Mississippi River.

We have confirmed that the train was carrying oil. Our news team is near the scene and can see smoke coming from the fire. The U.S. Fish and Wildlife Service tells TV-6 that fire crews were pulled away from the fire because of the danger.

You can also see a large plume of smoke from the live slope cameras located at Chestnut Mountain Ski Resort. Two members of the Coast Guard are also on their way to the scene. Iowa American Water company, which uses the Mississippi River as a source for drinking water, has not been notified of the incident.

BNSF released this statement on the derailment:

A BNSF Railway train derailed at approximately 1:20 pm CST in a rural area south of Galena, IL. There are no injuries reported. The train consists of 105 loaded cars, which includes 103 cars loaded with crude oil and 2 buffer cars loaded with sand. BNSF responders are en route. No further information is available at this time.

Please share!