Tag Archives: Canadian regulation

ForestEthics: Oil Trains Too Fast, New Safety Rules Too Slow

Repost from ForestEthics (Also appearing in the Huffington Post)

Oil Trains Too Fast, New Safety Rules Too Slow

By Todd Paglia, Executive Director, May 1, 2015
New Oil Train Rules (Photo/NOAA)
New Oil Train Rules (Photo/NOAA)

In the first three months of 2015 four oil train accidents sent emergency responders scrambling, crude oil spilling into drinking water supplies, and fireballs blasting into the sky. The string of accidents in February and March demonstrate the severe threat from Bakken crude and Alberta tar sands moving on mile-long oil trains. These derailments and explosions set a bar we can use to measure the new oil train standards announced today by the US and Canadian governments.

Would the new rules have prevented any of the 2015 accidents and, ultimately, will they reduce the threat of oil train catastrophes like the 2013 Lac Megantic, Quebec, explosion that killed 47 people? The answer is no, and the reason is speed: the regulations move too slow and the trains continue to move too fast.

The rules announced at a joint press conference today by US and Canadian officials arrive decades late and with the sticky fingerprints of the oil and rail industry all over them. The administration has slowed down and narrowed the scope of the rules so the most dangerous tank cars stay on the rails for at least two and a half years. Other unsafe tank cars have five or seven years before they must meet new higher standards.

Not that the new standards will help much: All four 2015 accidents involved CPC-1232 cars, the newer tank cars that are supposedly safer than the dangerous DOT-111s. But to be clear, neither the upgraded cars or new cars built to the new standard will prevent an explosion if the train is moving at normal speeds.

So we can begin to look for new and upgraded cars (like the ones that exploded in recent months) in the years to come, but those living along the tracks can still expect to see the worst cars continue to roll by their homes for a very long time. The administration effectively allows rail companies to keep antiquated tank cars on the rails in trains with fewer than 35 crude oil tank cars (or 20 in a row.) That means oil trains hauling up to a million gallons of explosive crude oil in the most dangerous tank cars will keep rolling through a downtown near you FOREVER.

The administration trumpets new electronically controlled pneumatic brakes for oil trains. While it’s good news that oil and rail companies will use state-of-the-art technology, the administration is giving them until 2021 to install the new better brakes. That’s six years too long to require what should be a basic minimum safety requirement.

And while these upgrades to the tank car fleet creep slowly into place, the trains will continue flying down the tracks at reckless speeds. The new rule allows oil trains to travel at more than twice the rated “puncture velocity” of even the new tank cars that they will (in some cases) eventually require. That means that oil trains carrying three million gallons of explosive crude will continue to travel at 50 mph across North America, except in a small number of “high threat” urban areas where they must go 40. The new speed limits offer little comfort because three of the four of the explosive accidents in 2015 occurred at speeds below 35 mph. (The accident in Gogama, ON, occurred at 43 mph, just three mph over the “high-priority” speed limit.) The Galena, Illinois, derailment occurred at only 23 mph, proving that the speed limits in the rule are inadequate to protect anyone.

In the final insult to injury, the administration walked too quickly away from notification standards in an earlier draft of the rule, leaving citizens and emergency responders in the dark about where these trains are running and when.

The Obama Administration took its time developing new rules for hazardous materials on trains that run through the heart of America: they looked at the threat of exploding oil trains, but heavy industry lobbying made them flinch. The administration failed to learn the lessons of Lac Megantic or the four explosive oil train accidents we’ve seen so far in 2015 alone. They have given public safety the cold shoulder, instead embracing the oil and rail industry lobbyists peddling this dangerous cargo.

We were fortunate that none of the 2015 accidents caused fatalities. ForestEthics and our many partners will continue pushing the administration to do a lot better and hope that our luck holds while we stop these dangerous trains from crisscrossing North America.  But it shouldn’t be a matter of luck. Secretary Foxx and President Obama have chosen to roll the dice instead of writing strong rules that protect the 25 million of us living in the blast zone.


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    Alberta’s possible pivot to the left alarms Canadian oil sector

    Repost from Reuters

    Alberta’s possible pivot to the left alarms Canadian oil sector

    By Scott Haggett and Nia Williams, May 4, 2015 7:07am EDT
    Alberta NDP Leader Rachel Notley meets with Mayor Naheed Nenshi in his office in Calgary, Alberta, April 30, 2015. REUTERS/Todd Korol

    (Reuters: CALGARY, Alberta) – Canada’s oil-rich province of Alberta is on the cusp of electing a left-wing government that can make life harder for the energy industry with its plans to raise taxes, end support for key pipeline projects and seek a bigger cut of oil revenues.

    Polls suggest Tuesday’s election is set to end the Conservative’s 44-year reign in the province that boasts the world’s third-largest proven oil reserves and now faces recession because of the slide in crude prices.

    Surveys have proven wrong in Canadian provincial elections before and voters may end up merely downgrading the Conservatives’ grip on power to a minority government.

    Yet the meteoric rise of the New Democratic Party and the way it already challenges the status-quo of close ties between the industry and the ruling establishment has alarmed oil executives. The proposed review of royalties oil and gas companies pay the government for using natural resources and which could lead to higher levies, is a matter of particular concern.

    “Now is not the time for a review of oil and natural gas royalties,” Tim McMillan, president of the Canadian Association of Petroleum Producers, the country’s top oil lobby, said in a statement.

    A 2007 increase in the levy was rolled back when the global financial crisis struck and oil executives say today the time is equally bad to try it again.

    Yet the left’s leader Rachel Notley, a former union activist and law school graduate, has shot up in popularity ratings in the past months advocating policies that have been anathema for many conservative administrations.

    She says she would not lobby on behalf of TransCanada Corp’s controversial Keystone XL pipeline or support building of Enbridge Inc’s Northern Gateway pipeline to link the province’s oil sands with a Pacific port in British Columbia. Citing heavy resistance from aboriginal groups to the Enbridge line, Notley says Alberta should back those that are more realistic such as TransCanada’s Energy East pipeline to the Atlantic ocean.

    PACKING UP?

    Notley also advocates a 2 percentage point rise in Alberta’s corporate tax rate to 12 percent to shore up its budget that is expected to swing from a surplus to a C$5 billion deficit in 2015/2016 as energy-related royalty payments and tax revenues shrink.

    Even with the proposed corporate tax hike Alberta’s overall taxes would remain the lowest nationally. Oil executives warn, however, that any new burdens at a time when the industry is in a downturn, shedding jobs and cutting spending, could prompt firms to move corporate head offices out of the province.

    “Business is mobile,” said Adam Legge, president of the Chamber of Commerce in Calgary where most of Canada’s oil industry is based. “Capital, people and companies move.”

    Ironically, the challenge the oil industry and the Conservatives face is in part a by-product of Alberta’s rapid growth fueled by the oil-sands boom.

    The influx of immigrants from other parts of Canada and overseas has changed the once overwhelmingly white and rural province. Today Alberta is one of the youngest provinces and polls show younger and more diverse population is more likely to support left-wing causes such as environment and education and more critical of big business. The New Democratic Party still only got 10 percent of the votes in the 2012 vote, but an election of a Muslim politician as a mayor of Calgary in 2010 served as an early sign of the changing political landscape.

    The Conservatives themselves and their gaffe-prone leader Premier Jim Prentice also share the blame for the reversal of fortunes with one poll showing them trailing the left by 21 percent to 44 percent.

    Prentice angered voters when he told Albertans to “look in the mirror” to find reasons for the province’s fiscal woes and then passed a budget in March that raised individual taxes and fees for government services but spared corporations.

    Scandals – Prentice’ s predecessor left last year because of a controversy over lavish spending – and blunders added to the party’s woes.

    The NDP vaulted to the top of the polls after Notley’s strong performance in an April 23 televised debate, when Prentice, former investment banker, drew fire for suggesting his rival struggled with math.

    Then there is voter fatigue with a party seen as too comfortable and scandal-prone after decades in power.

    “It’s still the same gang, the same policy, same procedures, the same concept of entitlement,” said one executive at a large oil and gas producer who declined to be named because he is not authorized to talk to the media. “I know some extremely neo-conservative guys who have said enough is enough.”

    (Additional reporting by Julie Gordon in Vancouver and Mike De Souza in Ottawa; Editing by Amran Abocar and Tomasz Janowski)
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      NY Times: New Oil Train Rules Are Hit From All Sides

      Repost from The New York Times

      New Oil Train Rules Are Hit From All Sides

      By Jad Mouawad, May 1, 2015
      An oil train rolls through Surrey, N.D., in the Bakken region, where oil production has grown at a spectacular rate in recent years. Credit Jim Wilson/The New York Times

      Ending months of uncertainty and delays, federal regulators on Friday unveiled new rules for transporting crude oil by trains, saying the measures would improve rail safety and reduce the risks of a catastrophic event.

      But the rules quickly came under criticism from many sides. Lawmakers and safety advocates said the regulations did not go far enough in protecting the public, while industry representatives said some provisions would be costly and yield few safety benefits.

      More than two years in the making, the rules followed a spate of derailments, explosions and oil spills around the country that highlighted the hazards of shipping large quantities of potentially explosive material on rails. The regulations introduce a new tank car standard for oil and ethanol with better protections, and mandate the use of electronically controlled brakes.

      Facing growing pressure from members of Congress as well as local and state officials, the Department of Transportation has taken repeated steps in the last two years to tackle the safety of oil trains and reassure the public. Last month, for example, it set lower speed limits for oil trains going through urban areas.

      Under the new rules, the oldest, least safe tank cars would be replaced within three years with new cars that have thicker shells, higher safety shields and better fire protection. A later generation of tank cars, built since 2011 with more safety features, will have to be retrofitted or replaced by 2020.

      Oil trains — with as many as 120 cars — have become common sights in cities like Philadelphia, Albany and Chicago as they make the slow journey from the Bakken region of North Dakota, where oil production has surged in recent years.

      Local and state officials have complained that rail-friendly rules make it difficult to predict when trains will pass through.

      But regulators retreated from a provision that would have forced railroads to notify communities of any oil train traffic. Instead, railroads will need to have only a “point of contact” for information related to the routing of hazardous materials.

      Several members of Congress, particularly those representing states like Washington, Oregon, North Dakota and New York that have seen a surge in train traffic, said the rules did not go far enough and signaled that legislation might be needed.

      Senators Ron Wyden and Jeff Merkley of Oregon said they were disappointed that transportation officials had not expanded public information about oil train routes.

      “Instead of providing first responders more details about oil shipments, railroads will simply be required to give our firefighters a phone number,” they said.

      Railroads said they welcomed the new regulations but objected to a provision that would require tank cars to have electronically controlled pneumatic brakes by 2021. The Department of Transportation said the new brakes, known as E.C.P., are more effective than air brakes or dynamic brakes that are currently being used.

      “The D.O.T. couldn’t make a safety case for E.C.P. but forged ahead anyway,” Edward R. Hamberger, the president and chief executive of the Association of American Railroads, said in a statement. “I have a hard time believing the determination to impose E.C.P. brakes is anything but a rash rush to judgment.”

      The railroad association has estimated in comments filed to the Transportation Department last year that installing the new brakes would cost $9,665 per tank car. The Railway Supply Institute, which represents tank car makers, also pushed against the use of those brakes, saying their effectiveness was not proved and would not provide a significant safety advantage.

      Transportation officials said the new type of brakes was already in use by some railroads for other types of commodities. Their use would decrease the chances of a catastrophic pileup, reduce the number of punctured cars in an accident, or allow train operators to stop faster if there was an obstacle on the tracks.

      Sarah Feinberg, the acting administrator of the Federal Railroad Administration, said: “The mission of the F.R.A. is safety and not focusing on what is convenient or inexpensive or provides the most cost savings for the rail industry. When I focus on safety, I land on E.C.P. It’s a very black-and-white issue for me.”

      There have been five explosions and spills this year alone, four in the United States and one in Canada. In July 2013, 47 people died in Canada after a runaway train derailed and exploded in the city of Lac-Mégantic, Quebec.

      “I am hopeful the rail industry will accept this rule, and will follow this rule,” Anthony Foxx, the transportation secretary, said at a news conference in Washington. He appeared with Canada’s transport minister, Lisa Raitt, who said Canadian and American regulations would be aligned.

      A central question before the administration was to determine what level of protection the new generation of cars should have and how quickly to roll them out.

      The new rules create a new standard, “high-hazard flammable trains,” defined as “a continuous block of 20 or more tank cars loaded with flammable liquid or 35 or more tank cars loaded with a flammable liquid dispersed through a train.”

      By 2018, the rule would phase out older tank cars, DOT-111s, long known to be ill suited for transporting flammable material. A newer generation of cars, known as CPC-1232, would have to be retired or refitted to meet the new standard, DOT-117, by 2020.

      All cars built under the DOT-117 standard after Oct. 1, 2015, will have a thicker nine-sixteenths-inch tank shell, a one-half-inch shield running the full height of the front and back of a tank car, thermal protection and improved pressure-relief valves and bottom outlet valves.

      Senator Charles E. Schumer, Democrat of New York, said Friday’s announcement gave railroads too much time to remove older cars from service. Mr. Schumer was one of seven senators who unveiled a bill that would seek to impose a fee of $175 per shipment on older cars to speed up their removal from service.

      “The good news is that the standards are predictable, but the bad news is that the phaseout time is too lenient,” Mr. Schumer said.

      Senator Marie Cantwell, Democrat of Washington, was more forceful, saying that the new regulations also failed to reduce the volatility of Bakken crude, which is more likely to catch fire and explode than other forms of crude.

      “It does nothing to address explosive volatility, very little to reduce the threat of rail car punctures, and is too slow on the removal of the most dangerous cars,” she said. “It’s more of a status quo rule.”

      Oil companies, though, said the mandate to build new tank cars to replace older models starting in 2018 would stretch the industry’s manufacturing ability and lead to shortages.

      Placing blame on the railroads, Jack Gerard, the chief executive of the American Petroleum Institute, said regulators should focus instead on preventing derailments and enhancing track inspection and maintenance.

      The spectacular growth of oil production from the Bakken region, negligible only a few years ago and now exceeding a million barrels a day, has transformed the domestic energy industry. It has placed the United States back on a path to oil self-sufficiency, and profoundly disrupted international energy markets.

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