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.
Repost from the Spokane Spokesman-Review [Editor: Oh…this sounds SO familiar…. Benicia sends solidarity and support to our friends in Washington state. – RS]
Critics say oil trains report underestimates risk
By Becky Kramer, December 18, 2015
The chance of an oil train derailing and dumping its cargo between Spokane and a new terminal proposed for Vancouver, Washington, is extremely low, according to a risk assessment prepared for state officials.
Such a derailment would probably occur only once every 12 years, and in the most likely scenario, only half a tank car of oil would be spilled, according to the report.
But critics say the risk assessment – which includes work by three Texas consultants who are former BNSF Railway employees and count the railroad as a client – is based on generic accident data, and likely lowballs the risk of a fiery derailment in Spokane and other communities on the trains’ route.
The consultants didn’t use accident data from oil train wrecks when they calculated the low probability of a derailment and spill. The report says that shipping large amounts of oil by rail is such a recent phenomanon that there isn’t enough data to produce a statistically valid risk assessment. Instead, the consultants drew on decades of state and national data about train accidents.
That approach is problematic, said Fred Millar, an expert in hazardous materials shipments.
Probability research is “a shaky science” to begin with, said Millar, who is a consultant for Earthjustice, an environmental law firm opposed to the terminal. “The only way that you can get anything that’s even partly respectable in a quantitative risk assessment is if you have a full set of relevant data.”
To look at accident rates for freight trains, and assume you can draw credible comparisons for oil trains, is “very chancy,” he said. “Unit trains of crude oil are a much different animal…They’re very long and heavy, that makes them hard to handle. They come off the rails.”
And, they’re carrying highly flammable fuel, he said.
Terminal would bring four more oil trains through Spokane daily
The proposed Vancouver Energy terminal would be one of the largest in the nation, accepting about 360,000 barrels of crude oil daily from North Dakota’s Bakken oil fields and Alberta’s tar sands. For Spokane and Sandpoint, the terminal would mean four more 100-car oil trains rumbling through town each day – on top of the two or three per day that currently make the trip.
The proposed $210 million terminal is a joint venture between Tesoro Corp. and Savage Companies. Oil from rail cars would be unloaded at the terminal and barged down the Columbia River en route to West Coast refineries.
A spill risk assessment was part of the project’s draft environmental impact statement, which was released late last month. A public meeting on the draft EIS takes place Jan. 14 in Spokane Valley. State officials are accepting public comments on the document through Jan. 22.
The spill risk work was done by a New York company – Environmental Research Consulting – and MainLine Management of Texas, whose three employees are former BNSF employees, and whose website lists BNSF Railway as a client. The company has also done work for the Port of Vancouver, where the terminal would be located.
The risk analysis assumes the trains would make a 1,000-mile loop through the state. From Spokane, the mile-long oil trains would head south, following the Columbia River to Vancouver. After the trains unloaded the oil, they would head north, crossing the Cascade Range at Stampede Pass before returning through Spokane with empty cars.
Report used data on hazardous materials spills
Oil train derailments have been responsible for a string of fiery explosions across North America in the past three years – including a 2013 accident that killed 47 people in the small town of Lac-Megantic, Quebec. Other oil train derailments have led to evacuations, oil spills into waterways and fires that burned for days.
But since shipping crude oil by train is relatively new, there’s not enough statistical information about oil train accidents to do risk calculations, the consultants said several times in the risk assessment.
Instead, they looked at federal and state data on train derailments and spills of hazardous materials dating back to 1975, determining that the extra oil train traffic between Spokane and Vancouver posed little risk to communities.
Dagmar Schmidt Etkin, president of Environmental Research Consulting, declined to answer questions about the risk assessment. Calls to MainLine Management, which is working under Schmidt Etkin, were not returned.
Stephen Posner, manager for the state’s Energy Facilities Siting Council, which is overseeing the preparation of the environmental impact statement, dismissed questions about potential conflicts of interest.
“There aren’t a lot of people who have the expertise to do this type of analysis,” Posner said.
Schmidt Etkin also worked on a 2014 oil train report to the Washington Legislature, he said. “She’s highly regarded in the field.”
According to her company website, Schmidt Etkin has a doctorate from Harvard in evolutionary biology. The site says she provides spill and risk analysis to government regulators, nonprofits and industry groups. Her client list includes the U.S. Environmental Protection Agency, the Coast Guard and the American Petroleum Institute.
Posner reviewed the scope of work outlined for the spill risk analysis.
“We put together the best analysis we could with limited sources of information,” he said. “This is a draft document. We’re looking for input from the public on how we can make it better.”
Spokane ‘a more perilous situation’
The “worst case” scenario developed for the risk assessment has also drawn criticism. The consultants based it on an oil train losing 20,000 barrels of oil during a derailment. The risk assessment indicates that would be an improbable event, occurring only once every 12,000 to 22,000 years.
In fact, twice as much crude oil was released during the 2013 Lac-Megantic accident in Quebec, said Matt Krogh, who works for Forest Ethics in Bellingham, Washington, which also opposes construction of the Vancouver Energy Terminal.
“If I was looking at this as a state regulator, and I saw this was wrong – quite wrong – I would have them go back to the drawing board for all of it,” Krogh said.
Krogh said he’s disappointed that former BNSF employees didn’t use their expertise to provide a more meaningful risk analysis. Instead of looking at national data, they could have addressed specific risks in the Northwest, he said.
Oil trains roll through downtown Spokane on elevated bridges, in close proximity to schools, hospitals, apartments and work places. In recent years, the bridges have seen an increase in both coal and oil train traffic, Krogh said.
“The No. 1 cause of derailments is broken tracks, and the No. 1 cause of broken tracks is axle weight,” he said. “We can talk about national figures, but when you talk about Spokane as a rail funnel for the Northwest, you have a more perilous situation based on the large number of heavy trains.”
Elevated rail bridges pose an added risk for communities, said Millar, the Earthjustice consultant. The Lac-Megantic accident was so deadly because the unmanned train sped downhill and tank cars crashed into each other, he said. Not all of the cars were punctured in the crash, but once the oil started burning, the fire spread, he said.
“If you have elevated tracks and the cars start falling off the tracks, they’re piling on top of each other,” Millar said. “That’s what Spokane has to worry about – the cars setting each other off.”
Governor has the final say
Railroad industry officials say that 99.9 percent of trains carrying hazardous materials reach their destination without releases. According to the risk assessment, BNSF had only three reported train derailments per year in 2011, 2012 and 2013. The railroad has spent millions of dollars upgrading tracks in Washington in recent years, and the tracks get inspected regularly, according to company officials.
Whether the Vancouver Energy Terminal is built is ultimately Gov. Jay Inslee’s decision. After the final environment impact statement is released, the 10-member Energy and Facilities Siting Council will make a recommendation to the governor, who has the final say.
Environmental impact statements lay out the risks of projects, allowing regulators to seek mitigation. So, it’s important that the EIS is accurate, said Krogh, of Forest Ethics.
In Kern County, California, Earthjustice is suing over the environmental impact statement prepared for an oil refinery expansion. According to the lawsuit, the EIS failed to adequately address the risk to communities from increased oil train traffic.
“If you have a risk that’s grossly underestimated, you’ll be making public policy decisions based on flawed data,” Krogh said.