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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