Tag Archives: Canadian National Railway

Canadian oil trains carrying more undiluted raw bitumen

Repost from Reuters
[Editor:  How, you ask?  Quote: ” …raw bitumen can be shipped on heated and coiled rail cars without diluent.”  Less volatile, and therefore supposedly safer, unless you consider the overall safety of the planet.  Cheaper for Canadian oil companies, though, so surely a hot ticket.  They’re actually planning to DILUTE the stuff to send it down pipelines to a rail facility, then REMOVING some or all the diluent before loading it as “raw” bitumen – onto oil train tank cars.  All for you and me – gee, no thanks.  – RS]

Canadian oil trains shift to carry less-volatile crude

CALGARY, Alberta | By Nia Williams, May 5, 2015 1:00am EDT

May 5 (Reuters) – A growing share of Canadian oil-by-rail traffic is made up of tough-to-ignite undiluted heavy crude and raw bitumen, say industry executives, as companies scramble to cut expenditures with the price of crude down more than 40 percent since June.

By eliminating the cost of diluting with ultra-light condensate, heavy oil offers rail shippers an opportunity to claw back a few dollars per barrel in transportation costs.

Official data does not break down the different Canadian crudes shipped by rail but interviews with industry executives suggest undiluted heavy and raw bitumen shipments now make up roughly a quarter of the estimated 200,000 barrel per day (bpd) oil-by-rail market.

An added bonus is that heavy crude and bitumen are far less combustible than the Bakken and Canadian synthetic crudes involved in fiery crashes that spurred the Canadian and U.S. governments on Friday to tighten safety rules for trains carrying oil.

With very high boiling and flashpoints they fall outside Packing Groups 1 and 2, used to classify the more volatile types of crude oil for transport, and are already shipped in double-hulled cars, meaning they should be unaffected by last week’s tank car phase-out rules.

Oil-by-rail shipments have come under increased scrutiny and public outrage following 10 oil-train derailments involving fires in less than two years.

“The business is moving back to where it started, which is as a vehicle to move undiluted heavy oil,” said John Zahary, chief executive of Altex Energy, which operates crude-by-rail terminals.

Normally, rail is more expensive than shipping by pipeline, but undiluted rail shipments offer better returns because shippers do not need to add between 15 and 30 percent condensate per barrel, which often trades at a premium to U.S. benchmark crude.

Overall rail volumes have dipped in recent months, as the shrinking gap between U.S. and cheaper Canadian crude prices has eroded arbitrage opportunities. Total crude-by-rail export volumes, not including shipments within Canada, dipped 5 percent quarter-on-quarter in the final three months of 2014 to 173,000 bpd, according to the National Energy Board.

Still, Jarrett Zielinksi, chief executive officer of TORQ Transloading, said the proportion of heavy undiluted crude shipped is growing.

TORQ’s overall volumes fell to approximately 25,000 bpd this year, but it is now moving essentially 100 percent undiluted conventional heavy, up from around 85 percent last year.

Meanwhile, Altex moved around 35,000 bpd of conventional heavy last month and has just finalized plans for a 100,000 bpd unit train facility in Lashburn, Saskatchewan.

RAWBIT-BY-RAIL

Like heavy crude, raw bitumen can be shipped on heated and coiled rail cars without diluent. But it is a much smaller segment of the market due to the infrastructure needed at both loading and unloading facilities.

Canadian National Railway is pushing hard towards shipping more of this so-called neat bitumen to improve both economics and safety.

“It’s the wave of the future,” James Cairns, CN vice-president of petroleum and chemicals, told a recent conference. “When we move bitumen it doesn’t even move as a dangerous commodity. The safest crude you can move by rail is a heavy, neat bitumen crude.”

MEG Energy Corp and Keyera Corp have looked at building diluent recovery units. This would enable them to receive diluted bitumen by pipeline at rail terminals, remove all or some of the diluent and then load the raw bitumen onto railcars.

Both companies have put those plans on hold due to low oil prices but said they could be developed in future.

(Additional reporting by Allison Martell in Toronto; Editing by Jeffrey Hodgson and Alan Crosby)
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    McClatchy Exclusive: Report details causes of West Virginia oil train fire

    Repost from McClatchyDC News

    Rail defect, tank car valves implicated in West Virginia oil train fire

    By Curtis Tate,  April 16, 2015

    — Outlet valves underneath four tank cars in a February oil train derailment in West Virginia were sheared off and the 50,000 gallons of crude oil they released ignited in a fire that subsequently caused several nearby rail cars to explode, according to a federal report.

    The report also identified the initial cause of the Feb. 16 derailment in Mount Carbon, W.Va., as a broken rail on track owned and maintained by CSX and said more than 362,000 gallons of crude oil were released. The fires and explosions from the derailment kept 300 residents away from their homes.

    The report, which appeared Thursday in the Pipeline and Hazardous Materials Safety Administration’s hazardous materials incident database, highlights another issue with the design of the tank cars used to carry crude oil and their ability to resist damage from derailments and fire exposure.

    The Mount Carbon derailment was one of four oil train derailments since the beginning of the year that resulted in large fires. On March 5, an oil train operated by BNSF derailed near Galena, Ill. Two other oil trains derailed in Ontario on Canadian National, one in February and one in March.

    Last week, the National Transportation Safety Board issued recommendations that tank cars used to transport flammable liquids must have thermal insulation to protect them from the kind of fire exposure that can result in explosions.

    Federal regulations require tank cars to survive 100 minutes of fire exposure. However, eight tank cars failed within 90 minutes after the derailment, their contents exploding in giant fireballs, according to the NTSB.

    The NTSB recommendations did not address the apparent cause of the initial fire: the failure of the bottom valves on the cars used in unloading.

    A set of new regulations on tank car construction the government may release in the next few weeks include requirements to remove bottom valve handles or to protect them from opening in a derailment. But they would not require the valves’ removal altogether.

    Removing the valves would mean expensive modifications at unloading facilities that have popped up across the country as a surge in energy production has moved by rail in recent years.

    Members of Congress impatient with the pace at which new regulations have moved have begun introducing legislation to require more robust tank car construction. Regulators and lawmakers also are pushing for increased track inspections.

    The particular type of internal defect that led to the broken rail in West Virginia, called a vertical split head, can be difficult to detect with a visual inspection, according to Sperry, a company that makes vehicles that perform ultrasonic rail inspections.

    Federal law requires that railroads inspect most mainline track twice a week, with at least one calendar day between inspections. A CSX regional vice president told reporters a day after the derailment that the track in Mount Carbon had been inspected three days earlier.

    Rob Doolittle, a CSX spokesman, said in an email Thursday that the company looked forward to learning more about the Federal Railroad Administration’s accident investigation.

    “Safety is CSX’s highest priority and we carefully evaluate the ascribed cause of each incident to apply whatever lessons are available to make our operations safer,” he said.

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      Benicia Herald: Rep. pens crude-by-rail safety bill

      Repost from The Benicia Herald

      Rep. pens crude-by-rail safety bill

      ■ Mike Thompson: Recent accidents show need for ‘robust’ action

      By Donna Beth Weilenman, April 15, 2015 
      MIKE THOMPSON. File photo
      MIKE THOMPSON. File photo

      U.S. Rep. Mike Thompson, the Napa Democrat who represents Benicia in the House, has introduced the Crude-by-Rail Safety Act he co-authored to establish comprehensive safety security standards for transporting crude oil by train.

      The act, presented to the House on Wednesday, is a response to concerns that current safety standards don’t address hazards such transports pose, Thompson said.

      Joining him in co-authoring the proposed legislation were Reps. Jim McDermott, D-Wash., Doris Matsui, D-Sacramento, Ron Kind, D-Wis. and Nita Lowey, D-N.Y.

      The Crude-By-Rail Safety Act would put in place safety measures Thompson said would assure that communities through which oil is transported by train are secure, that rail cars are as strong as possible and that first responders are prepared to handle emergencies.

      While many opponents of crude by rail cite the July 6, 2013, Lac-Megantic rail disaster that killed 47 in the town in Quebec, Canada, Thompson said several more accidents involving trains hauling crude already have taken place this year in Canada and the United States.

      A CSX train in West Virginia on its way to Yorktown, Va., was pulling CPC 1232 tanker cars, designed to be less vulnerable and stronger than the earlier-model D-111s [sic] that exploded in the Lac-Megantic crash. But the oil train derailed Feb. 16 near Mount Carbon, W.Va., and fire and leaking North Dakota oil could be seen a day later. Two towns had to be evacuated, one house was destroyed, at least one derailed car entered the Kanawha River and a nearby water treatment plant was closed.

      A March 10 derailment three miles outside of Galena, Ill., involved 21 cars of a 105-car Burlington Northern-Santa Fe train hauling Bakken crude. Three days later, a 94-car Canadian National Railway crude oil train derailed three miles away from Gogama, Northern Ontario, and destroyed a bridge. That derailment was just 23 miles from the site of a Feb. 14 derailment involving a 100-car Canadian National Railways train traveling from Alberta.

      Those accidents, Thompson said, “underscored the urgency of action to curb the risks of transporting volatile crude oil. The legislation introduced today will increase safety standards and accountability.”

      He said the act would establish a maximum volatility standard for crude oil, propane, butane, methane and ethane that is transported by rail. It would forbid using DOT-111 tank cars and would remove 37,700 of those cars from the rail network.

      He said the legislation would establish the strongest tank car standards to date.

      Railroads would be required to disclose train movements through communities and to establish confidential close-call reporting systems. Another requirement would be the creation of emergency response plans, he said.

      The legislation calls for comprehensive oil spill response planning and studies and would increase fines for violating volatility standards and hazardous materials transport standards.

      This is not the first time Thompson has addressed rail safety.

      In December 2014, he wrote legislation improving rail and refinery security and requiring an intelligence assessment of the security of domestic oil refineries and the railroads that serve them.

      A quarter-century earlier, when he was a state senator, Thompson was alarmed by the July 14, 1991 Southern Pacific derailment and resulting toxic spill at Dunsmuir, a small resort town on the Upper Sacramento River.

      The derailment sent 19,000 gallons of soil fumigant into the river, killing more than a million fish, millions of other types of animals and hundreds of thousands of trees.

      The fumigant sent a 41-mile plume along the river to Shasta Lake, an incident that still ranks as one of California’s largest hazardous chemical spills, from which some species have never recovered.

      The incident occurred in what was Thompson’s state senatorial district. In response he drafted a bill that became Chapter 766 of the California State Statutes of 1991.

      His bill founded the Railroad Accident Prevention and Immediate Deployment (RAPID) Force, which cooperates with other agencies to respond to large-scale releases of toxic materials spilled during surface transportation accidents; ordered the California Environmental Protection Agency to develop a statewide program to address such emergencies; and for a time raised money to supply emergency responders with equipment they would need for spill cleanups.

      “Public safety is priority number one when it comes to transporting highly volatile crude oil,” Thompson said Wednesday.

      “Rail cars transporting crude run through the heart of our communities, and as recent accidents have demonstrated, robust, comprehensive action is needed.”

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        Alabama controversy over tank farm expansion – lessons for us all

        Repost from New American Journal
        [Editor:  This is a telling tale of local governance confronting – or not confronting – difficult issues, and serves as instructional material for others who take up local advocacy.  Good graphics.  – RS]

        Tank Farm Harvest Plans in Mobile — Crude Oil Is the Crop — But What Gets Plowed Under?

        By David Underhill, March 31, 2015 
        new-tankfarm_mobile1b
        Tank farm city, with more scheduled: Glynn Wilson

        MOBILE, Ala. – The tank farms became a hot potato, singeing any official who touched them.

        Residents near sites for new or expanding tank farms fired complaints at the city’s planning commission, which readily tossed the heated hassle to the city council. A majority poised to pass a moratorium on construction of tank farms, until promoters of these projects maneuvered to whittle away that majority.

        That spawned a citizens’ committee to study the issue and make recommendations to the planning commission, which appointed a subcommittee to receive these recommendations. That subcommittee is now juggling the spud before lobbing it back to the full planning commission, which will fling it again to the city council, which will … who knows.

        Last week the subcommittee’s three members met to ponder. Joining them were the planning commission’s lawyer and head staffer. Although this happened in public it wasn’t a public meeting. Citizens could sit and listen but not participate.

        The audience sorted themselves, as usual, into factions: the tank farm evangelists in one clump and the unbelievers in another. There were few, if any, neutral observers.

        Discussion began with the easy issues: Does the city have satisfactory procedures for deciding whether and where to locate tanks holding hazardous materials? How should the public be informed about impending decisions on these matters? Should the concerns of nearby residents have a prominent role in the proceedings? Can noxious fumes be captured rather than released from tank farms? Must the operators of such facilities provide timely, accurate information to fire departments and other emergency services about dangerous substances on hand?

        All agreed that any deficiencies in such issues could be fixed by adjustments to current practices.

        Consensus By Garble

        Then came the hard part. It was the same item that had flustered the citizens’ committee, which tried to achieve consensus about its recommendations — and largely succeeded — with one contentious exception.

        Buffer zones: How broad a safety strip should separate tank farms from homes, schools, churches, hospitals, businesses? The wider the strip the less danger if something goes explosively wrong. But the wider the strip the less land remains for the tanks.

        Most of the proposed new and expanding tank farms are squeezed between the waterfront and commercial or residential districts. Broad buffer zones would leave so little land for tanks along the shore that the planned facilities must shrink drastically, perhaps to the vanishing point.

        This applies in the north Mobile neighborhood of Africatown, settled by the human cargo from the last slave ship to arrive in the U.S. The huge tank farm intended there would squat between the waterfront and a dense residential area.

        Some on the citizens’ committee wanted a setback half a mile wide to protect Africatown. Others, more attuned to industry’s wishes, wanted a lot less.

        This conflict strained the quest for consensus and garbled the passages about buffer zones in the committee’s final report. Now the same wrangle vexes the planning commission’s subcommittee and it too has found no easy solution, as the discussion at last week’s meeting revealed.

        Consensus By Punting

        Nobody on the subcommittee wanted to specify a number for the width of buffer zones. They said projects would differ by location and each should be considered on its own merits. Maybe, they suggested, a minimum width could be required with an option for wider setbacks where warranted by circumstances.

        But they shied from saying what that minimum should be. Instead they instructed the staff to produce maps showing the sectors of the city zoned for heavy industry — where tank farms might locate — with surrounding buffers in 500 foot increments. These maps will illustrate where the desires of tank farm developers collide with people living and working within 500, 1,000 or 1,500 feet (and maybe more increments).

        And the subcommittee speculated about stretching the buffers with words. Must the setback be measured from the boundary of a tank farm site to the boundary of a nearby residential zone? Or might it be measured from the porch of the nearest inhabited home to the position of the tanks within the site. Then the necessary buffer could be created by moving the tanks to the farthest part of the site and putting offices and other support facilities in the part closest to residences.

        The maps will not say what the width of a buffer ought to be or where it should be measured from. The subcommittee will have to decide this and they are not ready to do so. They will meet again next month to study the maps. And they instructed their attorney to draft a prospective report to the full planning commission about any changes their deliberations may require in the city’s zoning or other regulations.

        Consensus By Omission

        This was a deft juggling of the hot potato. But the subcommittee didn’t dare to even touch the truly searing produce.

        They recognized that approving tank farms implies approving the transport of substances to fill those tanks. In Mobile that means trains pulling long, hazardous chains of tanker cars brimming with crude oil. Subcommittee members remarked upon fiery accidents elsewhere by such trains (opponents call them bomb trains and the neighborhoods along their routes blast zones) and fretted about repeats here. But the subcommittee pleaded impotence. They said railroads are regulated by others, who have the responsibility to oversee safety.

        Blast zone around proposed oil train unloading facility, downtown Mobile

        But the trains wouldn’t be coming to town without tank farms to receive their cargoes. And the subcommittee, as a branch of the planning commission, does have a say in whether these tank farms exist. Yet the members were hesitant about linking tank farm decisions to dangers from trains.

        They have the legal authority to attend to the health and safety of the people. But they acted like their main responsibility is fostering economic development. And they said repeatedly, in various phrasings, that expanding waterfront tank farms equals economic development.

        To them, anybody prepared to invest any big wad of money in anything is welcome. They didn’t consider (not out loud, at least) the elementary idea that devoting the waterfront to tank farms prevents other uses of the shoreline that might be more desirable development.

        While subcommittee members did note risks from tank farms, they said repeatedly that a balance must be found between economic development and public safety. This might be a valid approach if the benefits and hazards of tank farms were spread evenly across the city. But they are not. The hazards are highly concentrated in certain neighborhoods, and the benefits go mainly to investors elsewhere collecting profits. This is an inherent imbalance.

        And if the benefits and hazards were distributed evenly across the community that still doesn’t assure a balance between development and safety. Weighing such a balance assumes that pluses and minuses can be calculated like a mathematical formula and a solution found. But what if circumstances make this impossible? Then the choice isn’t to have both development and safety — it’s one or the other.

        Massively deadly chemical (Bhopal, India) and nuclear (Chernobyl, Ukraine; Fukushima, Japan) accidents left ruins surrounded by evacuated wastelands. Nothing comparable has happened yet with petroleum but a couple years ago in Canada an oil tanker train derailed and burned the center of a town (Lac-Megantic, Quebec) to cinders. Scores of residents died. The plans being made for oil storage and transport in Mobile contain the potential for similar or worse disasters. How could that balance development and safety?

        The subcommittee made no attempt to balance economic development against the greatest environmental hazard. It was simply ignored. The city already has a throng of large petrochemical storage tanks and the planned expansions would add dozens. Most of these are near the waterfront just a few feet above sea level. The battering waves of a major hurricane could come ashore on a storm surge 20-30 feet deep. And they would bring chunks of debris serving as piercing projectiles.

        Loose the contents from just a few of these tanks and the Exxon Valdez and BP’s offshore oil well become footnotes. The story history books will tell is the fate of Mobile’s river and bay.

        Is such a catastrophe unlikely? Yes. Is it possible? Yes. Planners need to take this into account. The subcommittee didn’t address it in the slightest.

        An Offer They Can’t Refuse?

        Another awkward topic ignored was the temptation to evict. Although the subcommittee spoke openly about fashioning buffers by backing dangerous tanks away from the boundaries of industrial zones abutting residential ones, they did not mention the obvious prospect of doing the opposite.

        This discussion pertained specifically to Africatown, where a giant tank farm wants to arise across the street from homes. Creating a broad buffer there by pushing the tanks back from the street and toward the water might leave so little land available for tanks that the project dies.

        Mega tank farm plans across street from Africatown homes

        But if the houses are removed then the buffer would be created on the other side of the street, and the tanks could fill the whole industrial tract as originally designed. While the residents might be defiant about clinging to their ancestral homes, what happens when they begin receiving pressure to leave plus attractive prices for selling out?

        This would amount to eviction, achieved by financial means. Or legal means might be used. A state’s power of eminent domain has been expanding. Previously the government could compel the sale of private property only for plainly public uses, like highways and parks. Lately private developments like shopping centers and pipelines have been declared public enough for the land they need to be seized under eminent domain. Why couldn’t that reasoning apply to homes located where a tank farm needs a buffer zone?

        My Brother’s Keeper?

        The tanker trains arriving in Mobile come on the Canadian National railroad from the tar sands mining moonscape of Alberta province. But extensive tar sands strata underlie north Alabama. Prospectors are taking technical and regulatory steps toward extracting these deposits.

        Activists in Mobile assume the motive behind much of the urge for expanding tank farms is to hold tar sands coming by train from upstate for transfer into ships. In that case, local officials who allow tank farm expansion are also allowing large swaths of the mining region to be gouged and polluted — because those tar sands won’t be mined unless the output can get to market by boat.

        If the planning commission’s subcommittee cared about this they should have said so. They didn’t. Their decisions will influence whether north Alabama becomes a replica of wrecked Alberta. But they behaved like they care about nothing except the benefits or detriments inside the Mobile city limits.

        In this loudly Christian area their attitude was: Hell, no! I’m not my brother’s keeper. Eff them. I’m looking out for me.

        This myopia is especially astonishing in a port that will drown when the oceans rise. Continuing to dump annual megatons of greenhouse gasses into the air by burning fossil fuels will melt the polar ice and flood every seafront.

        Even if all the tank farms anticipated here are built, Mobile’s contribution to this tonnage will be trivial. Every separate place’s will be trivial.

        Just as during World War II in the U.S. everybody with a yard was expected to have a Victory Garden, and nobody’s individual Victory Garden won the war. Perhaps not even all the Victory Gardens together freed enough cropland to feed the soldiers. But these gardens displayed purpose and resolve. That’s what Mobile’s refusal to host more fossil fuel tanks would do.

        Yet the subcommittee acted like they don’t care to be even their own port city’s keeper. In Florida, at least, officials have an excuse for such behavior. The governor has ordered them to delete from their vocabularies all such terms as global warming, climate change, melting icecaps, rising seas.

        In Mobile officials do this voluntarily. Perhaps their silence springs from fear of political retribution if they acknowledge that those global trends result from fossil foolishness. But even if these officials stand among the dwindling corps who sincerely deny the obvious, they still ought to address it.

        This has become a subject that no longer submits to silence. Too many people have become too anxious about it for deniers in authority to merely ignore it. They need to address it, if only to swat it aside. But the subcommittee said nothing.

        When this issue reaches the full planning commission, they also will be tempted to maintain a politically safe silence. Then the city council.

        To avoid singeing their fingers on the hot potato, they will let the planet continue to cook.

        Imagine the reaction if they said instead that they will not permit the expansion of tank farms on the Mobile waterfront. And challenged all other port cities to do the same.

        It would be a revolutionary act. Also sane and healthy.

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