Federal action seen as boost to local, state control over projects
By Brian Nearing, Thursday, September 29, 2016 10:03 pm
ALBANY > A federal ruling on a oil-by-rail facility in California could hand state and local officials in New York and across the country a powerful legal tool to oversee the projects, which have been controlled primarily by federal rules.
The federal Surface Transportation Board this month sided with officials in Benicia, a small city near San Francisco, in a dispute with an oil refining company over a proposed storage terminal for crude oil brought in by tanker trains. The Valero Refining Company had argued it was exempt from a city denial because it was functioning as a rail carrier, and governed by federal transportation rules — a legal concept called “preemption” — but the federal board rejected the claim.
“Valero is not a rail carrier, nor is it acting under the auspices of a rail carrier,” according to the federal decision. Critics of oil train traffic directed in recent years to two oil terminals at the Port of Albany hailed the ruling as a victory for more state and local control.
“This puts the state Department of Environmental Conservation in a very strong position to require the oil terminals to explain the full impacts of their operations,” said Chris Amato, an attorney for the not-for-profit environmental group Earthjustice.
This month, the DEC announced it was requiring one terminal operator, Global Partners, to answer additional environmental questions on its request to construct a crude oil heating terminal that could be used to process Canadian tar sands oil.
“Nothing in the opinion suggests that DEC’s current course of action with respect the Port of Albany should be altered,” a DEC statement said.
Critics of earlier DEC environmental approvals for the Global and Buckeye oil terminals have been urging the state to rescind its approvals, but the state had responded that such authority rested with the federal government, not the state.
Ruling by Little-Known Federal Agency Paves Way for Communities to Say No to Oil-by-Rail
By Justin Mikulka, September 28, 2016 – 03:58
The community of Benicia, [California,] in the crosshairs of history, made one of those decisions that will make a difference for the country. They stood up and said the safety of our communities matters.”
That was Yolo County Supervisor Don Saylor talking to The Sacramento Bee about the vote by the Benicia City Council to deny a new oil-by-rail facility that oil company Valero was seeking.
But that vote would have been meaningless if not for a recent decision on September 20 by the Surface Transportation Board (STB) that gave Benicia the legal authority to have some say over what happens within its borders.
Created in 1996, the STB is a federal agency which serves as “an independent adjudicatory and economic-regulatory agency charged by Congress with resolving railroad rate and service disputes and reviewing proposed railroad mergers.”
The STB decision helped clear up some of the gray areas around the issue of “pre-emption,” in which railroads are not subject to any local or state authorities or laws because local and state laws are “pre-empted” by federal law.
In 2013 the STB ruled in favor of Norfolk Southern Railway Company, saying once again that federal pre-emption of state laws protected the rail company from lawsuits filed in the state of Virginia.
The basic idea of pre-emption is that for interstate commerce to work, the federal government needs to be the sole regulator of railroads.
As we have reported previously on DeSmog, pre-emption can effectively place rail companies above local law. This has led to developments such as the case of Grafton, Massachusetts, where the construction of the largest propane transloading facility in the state occurred without the need for local approval, construction permits, or even environmental review.
Regarding the Grafton facility, the New England Center for Investigative Reporting wrote that, “Residents were dumbfounded: The location was in the middle of a residential neighborhood, less than 2,000 feet from an elementary school and atop the town’s water supply.”
This above-the-law approach has served rail companies well. And until the recent STB decision, it also appeared to protect oil companies who were moving oil by rail.
But this latest decision about Benicia appears to deliver a real blow to oil companies when it comes to oil-by-rail transfer facilities. Since the companies who receive the oil from the rail cars aren’t railroads, the STB ruled that they are not protected by federal pre-emption. In the decision the STB refers to Valero as a “a noncarrier” which is why the STB ruled they are not able to claim pre-emption.
This allowed Benicia to say no to an oil-by-rail facility in their community. And it has also changed the discussion about this industry as a whole.
San Luis Obispo County, California, has now delayed further the decision about a new oil-by-rail facility in order to consider the latest STB ruling.
Ethan Buckner was one of the organizers for environmental advocacy group Stand, which was working to stop the Benicia facility.
“This is a victory for the right of communities to say no to refineries’ dangerous oil train projects. The federal government has said once and for all that there is nothing in federal law that prevents cities from denying these oil companies’ dangerous rail projects,” Buckner said. “The oil industry keeps telling communities they have no right to say no to oil trains, but this ruling once and for all refutes this.”
“We’re pleased with the decision and the implications it will have across the country,” said Prange. “This issue is live in a number of sites across the country. This is definitely a decision that I think cities in other states will be looking to.”
They are definitely paying attention in San Luis Obispo County, as well as in Albany, New York.
Albany is the largest oil-by-rail hub on the East Coast.
Opponents of its oil trains recently had cause for celebration. On September 16, the state’s Department of Environmental Conservation announced that the two companies operating oil-by-rail facilities at the Port of Albany would now be required to undergo full environmental reviews before the agency would renew the companies’ permits.
Chris Amato is a lawyer for Earthjustice who has been working on this issue for years. He believes the STB decision supports what Earthjustice has been saying all along about Global Companies, which owns one of Albany’s oil-by-rail facilities.
“The decision by the Surface Transportation Board confirms what we have been saying since 2014: that Global’s claim that state regulation of their operations is pre-empted by federal railroad law is simply wrong,” Amato explained to DeSmog. “Global can no longer attempt to shield their operations from scrutiny under their flawed legal theory.”
Opponents of the Albany oil-by-rail operations have been asking the state to step in for years, but the state has also hidden behind the issue of federal pre-emption. In 2014 the Albany Times Unionreported that “Gov. Andrew Cuomo has been deflecting calls for the state to block the trains, saying rail transportation is controlled by the federal government, not the state.”
It would appear that the STB ruling negates New York’s current position and offers an option for the state to have authority over oil-by-rail facilities in Albany.
While the amount of oil moving by rail is roughly half of what it was two years ago, that is mostly due to the current low price of oil. And it hasn’t stopped oil companies’ continued efforts to build out more oil-by-rail infrastructure.
Meanwhile, oil trains continue to derail and explode, as happened in Mosier, Oregon, in June, and opposition to the oil-by-rail industry continues to grow.
This STB decision appears to be a game-changer in the oil-by-rail story. With it, perhaps now more politicians will agree that “the safety of our communities matter” — much more so than oil company profits.
Repost from Earthjustice.org [Editor: I’m reposting this map today – it was recently updated and still highly relevant. Earthjustice’s map shows Major Crude-by-Rail Accidents since 2012 (Red Symbols) and communities opposing Crude-by-Rail (Green Symbols). – RS]
More crude oil was spilled in U.S. rail incidents in 2013, than was spilled in the nearly four decades since the federal government began collecting data on such spills.
Since late 2012, as hydraulic fracturing and tar sands drilling created a glut of oil, the industry has scrambled to transport the fossil fuel from drill sites to the east and west coasts, where it can potentially be shipped overseas to more lucrative markets.
The increase in oil rail traffic, however, has not been matched with increased regulatory scrutiny. Oil trains are not subject to the same strict routing requirements placed on other hazardous materials; trains carrying explosive crude are permitted to pass directly through cities—with tragic results. A train carrying Bakken crude oil derailed in the Quebec town of Lac-Mégantic on July 6, 2013, killing 47 people in the small community.
In the absence of more protective regulations, communities across the country are beginning to take matters in their own hands.
Earthjustice represents groups across the country, fighting for protections from crude-by-rail:
DOT-111s are rail cars designed to carry liquids, including crude oil, and have been in service in North America for several decades. They are prone to punctures, oil spills, fires and explosions and lack safety features required for shipping other poisonous and toxic liquids. As crude production in the United States has surged exponentially in recent years, these outdated rail cars have been used to transport the crude oil throughout the country.
The U.S. and Canadian government recognized decades ago that the DOT-111s were unsafe for carrying hazardous materials, finding that the chance of a “breach” (i.e., loss of contents, potentially leading to an explosion) is over 50% in some derailment scenarios.
U.S. and Canadian safety investigators have repeatedly found that DOT-111s are unsafe and recommended that they not be used for explosive or hazardous materials, including crude oil; however, the U.S. government’s proposal to phase out these rail cars fails to take sufficient or immediate action to protect the public.
Q. What is Bakken crude oil?
Bakken crude refers to oil from the Bakken shale formation which is primarily in North Dakota, where production has skyrocketed in recent years due to the availability of newer hydraulic fracturing (“fracking”) techniques. The increase in the nation’s output of crude oil in 2013, mostly attributable to Bakken production, was the largest in the nation’s history.
Bakken crude is highly flammable, much more so than some crude oils. Today, Bakken crude moves in “unit trains” of up to 120 rail cars, as long as a mile and a half, often made up of unsafe DOT-111s.
Q. Are there alternative tank cars available?
Transporting Bakken crude by rail is risky under the best of scenarios because of its flammability. But legacy DOT-111s represent the worst possible option. All new tank cars built since October 2011 have additional some safety features that reduce the risk of spilled oil by 75%. Even so, safety investigators, the Department of Transportation, and the railroad industry believe tank cars need to be made even safer. Some companies are already producing the next-generation rail cars that are 85% more crashworthy than the DOT 111s. Petitioners support the safest alternatives available, and expect that the ongoing rulemaking process will phase out all unsafe cars.
Q. What steps have U.S. and Canadian governments taken?
The U.S. government recognizes that Bakken crude oil should not be shipped in DOT 111 tank cars due to the risks, but has done shockingly little to limit their use.
In May 2014, the DOT issued a safety alert recommending—but not requiring—shippers to use the safest tank cars in their fleets for shipments of Bakken crude and to avoid using DOT 111 cars. Canada, in contrast, responded to the Lac Mégantic disaster with more robust action. It required the immediate phase-out of some DOT-111s, a longer phase-out of the remainder, and the railroads imposed a surcharge on their use to ship crude oil in the meantime.
In the absence of similar standards in the U.S., the inevitable result will be that newer, safer cars will be used to ship crude in Canada—while the U.S. fleet will end up with the most dangerous tank cars.