Tag Archives: Office of Information and Regulatory Affairs (OIRA)

Crude By Rail, Homeland Security, McClatchy News, Public Safety, Terrorist attack

FBI: Oil Trains At Risk of “Extremist” Attacks

Repost from DeSmogBlog
[Editor: DeSmog refers here to an October 2014 article by Curtis Tate of McClatchy News that first broke this story.  I regret that the Benicia Independent failed to take note of this important article back then.  I will add that I have mixed feelings about this report.  Folks my age are aware of a long history of rogue investigations by the FBI, and we’ve become understandably wary of government agencies that serve the needs of corporate interests.  Nonetheless, I fear that there are in fact real and horrendous risks of security attacks by unbalanced individuals on the left and the right – and abroad.  For me, this is only one more reason to ban oil trains.  – RS]

FBI Advisory: Oil Trains At Risk of “Extremist” Attack, But Lacks “Specific Information” To Verify

By Steve Horn, July 18, 2015 – 05:58
First responders in Lac Megantic. Photo: Transportation Board of Canada.

A document* marked “Confidential” and published a year ago today, on July 18, 2014, by the Federal Bureau of Investigation (FBI) concluded that “environmental extremists” could target oil-by-rail routes, as first reported on by McClatchy. But the Bureau also concedes upfront that it lacks “specific information” verifying this hunch.

Rail industry lobbying groups published the one-page FBI Private Sector Advisory as an exhibit to a jointly-submitted August 2014 comment sent to the U.S. Department of Transportation’s (DOT), which has proposed “bomb trains” regulations currently under review by the White House Office of Information and Regulatory Affairs (OIRA). 

FBI Oil by Rail Advisory

Image Credit: Federal Bureau of Investigation

We’ve heard overtures like this one before from the FBI, other agencies and from industry players themselves.

As reported here on DeSmog, the FBI worked alongside TransCanada to take photos and monitor Tar Sands Blockade-affiliated activists and other anti-Keystone XL pipeline activists back in 2012 and 2013. The Guardian, Bloomberg and Earth Island Journal have also recently published stories, based on documents obtained under the Freedom of Information Act, further confirming that the FBI worked closely alongside TransCanada to monitor and disrupt activists opposed to the pipeline.

In August 2014, DeSmog also reported that in Maryland, rail company Norfolk Southern submitted a July 23, 2014 legal filing to the Maryland Department of the Environment citing Osama Bin Laden and Al Qaeda in its attempt to justify keeping oil-by-rail routes a trade secret. Norfolk submitted that filing merely five days after the FBI published its Private Sector Advisory.

And at a 2011 industry public relations conference in Houston, a communication manager at a major company involved in hydraulic fracturing (“fracking”) for shale oil and gas told the audience his community affairs employees use psychological warfare (PSYOPs) techniques in local communities, while another compared fracking opponents to “insurgents” who should be fended off by PR campaigns modeled after counterinsurgency warfare.

ISIS, AQAP, Bin Laden

While Norfolk Southern cited Biden Laden and Al Qaeda in its affidavit, the FBI honed in on the Islamic State (IS), also sometimes referred to as the Islamic State in Syria (ISIS) or the Islamic State in the Levant (ISIL). It also mentioned Al Qaeda in the Arabian Peninsula (AQAP) — and Osama Bin Laden.

Like Maryland, the rail industry lobbying groups cited the FBI Advisory as a way to argue against disclosing oil-by-rail routes to the public.

“It is not just environmental extremists who pose a threat to the transportation of crude by rail.  Foreign terrorists are also a risk,” wrote the industry lobbying groups. “Two publications reportedly by Al Qaeda in the Arabian Peninsula contain threats against crude oil trains…Furthermore, information from Osama Bin Laden’s compound indicates that Al-Qaeda has contemplated attacks on trains.”

Louis Warchot, an attorney for the Association of American Railroads, co-authored the comment submitted to DOT.

Before working for the association, Warchot “served in the United States Armed Forces and retired in the rank of Colonel in the United States Army Reserve Judge Advocate General’s Corps.” On top of his law, business masters and undergraduate degrees from University of California-Berkeley, Warchot also has a masters from the U.S. Army War College in Strategic Studies.

“Extremism” or Peaceful Activism?

In the FBI‘s advisory, it never uses the term “activist” or “advocate,” opting instead for the term “extremist.” So what does an “extremist” do and what exactly constitutes an extremist?

“Environmental extremists,” explains the Bureau, “believe the use of fossil fuels contributes to the destruction of our environment and may believe that transport of crude oil creates the potential for environmental hazardous train derailments and oil spills.”

It’s a definition that almost anyone who understands the science of climate change or is concerned about oil train explosions could fall under. The FBI then lays out what these “extremists” do.

According to the FBI, they use social media to spread awareness of oil-by-rail routes (like sharing a link to the ForestEthics website “Oil Train Blast Zone”) and make or send “threatening” phone calls or emails to industry, contractors or others associated with moving crude by rail.

“[T]actics to disrupt, obstruct or interrupt rail traffic to delay crude oil transportation” also makes the FBI cut, which is an activity that anti-coal activists sometimes take part in as a means of delaying coal trains.

FBI Oil by Rail Advisory
Image Credit: Federal Bureau of Investigation

“The FBI should be looking carefully at the imminent threat oil trains pose to millions of Americans living in the blast zone, but they should then turn their attention to the lax rules from the Department of Transportation and the oil and rail industry who fight common sense safety steps and hide train routes from emergency responders,” Ross Hammond, US Campaigns Director for ForestEthics, told DeSmog.

Speaking of threats, perhaps the FBI should concern itself with the explosive oil-by-rail trains that pass underneath West Point and right next to nuclear missile launch sites, rather than things that fall under the purview of First Amendment-protected speech threatening to industry profits.

*An earlier version of this article cited Chemical Security News as the first website to report on the FBI document. McClatchy DC was actually the first news outlet to report on the document’s existence as part of the U.S. Department of Transportation oil-by-rail rulemaking docket back in October 2014. We regret the error.

Photo Credit: First responders in Lac Megantic via Transportation Board of Canada.

Bakken Crude, CPC-1232, Crude By Rail, DOT-111, Oil Industry, Oil industry lobby, Rail industry, Rail industry lobby

Oil industry lawsuit against BNSF: a look behind the scenes

Repost from DeSmogBlog

Purposeful Distraction? Unpacking the Oil Refiners’ “Bomb Trains” Lawsuit vs. Warren Buffett’s BNSF

By Steve Horn, Tue, 2015-03-24 15:58

On March 13, American Fuel & Petrochemical Manufacturers (AFPM) — the oil refiners’ trade association — sued oil-by-rail carrying giant Burlington Northern Santa Fe (BNSF) for allegedly violating its common carrier obligation under federal law. A DeSmogBlog investigation has revealed there may be more to the lawsuit than initially meets the eye.

Filed in the U.S. District Court for the Southern District of Texas, Houston Division, AFPM sued BNSF “for violating its common carrier obligation by imposing a financial penalty” for those carrying oil obtained via hydraulic fracturing (“fracking”) in North Dakota’s Bakken Shale basin and other hazardous petroleum products in explosion-prone DOT-111 rail cars.

AFPM‘s beef centers around the fact that BNSF began imposing a $1,000 surcharge for companies carrying explosive Bakken fracked oil in DOT-111 cars, as opposed to “safer” CPC-1232 cars, at the beginning of 2015.

The Warren Buffett-owned BNSF did so, argues AFPM, illegally and without the authority of the federal government.

“This $1,000 surcharge on certain PHMSA-authorized rail cars breaches BNSF’s common carrier duty to ship hazardous materials under the auspices of PHMSA’s comprehensive regime governing hazardous materials transportation,” wrote AFPM‘s legal team, featuring a crew of Hogan Lovells attorneys. “Allowing railroads to penalize companies that ship crude oil in federally-authorized rail cars would circumvent PHMSA’s statutory and regulatory process for setting rail car standards for hazardous materials shipments.”

Upon a quick glance, it seems like a fairly straight-forward case of federal law and an intriguing example of an intra-industry dispute. But as recent history has proven, the devil is in the details.

BNSF Surcharge Not Unique

Though unmentioned in AFPM‘s lawsuit, BNSF is not the only oil-by-rail “bomb trains” company promulgating a surcharge.

In February 2014, eight months before BNSF announced its surcharge, Canadian Pacific Railway Ltd. (CP Rail) and Canadian National Railway Company both announced their own DOT-111 surcharge intentions.

“CP Rail will add a $325 ‘general service tank car safety surcharge’ on each car of crude that is shipped in any container other than the CPC 1232 model, effective March 14, it said in a notice issued to customers,” Reuters reported. “The new tiered pricing scheme comes the same week that Canadian National Railway Co also confirmed it was increasing rates for the older variety of DOT-111 tank cars.”

In its lawsuit, AFPM disapprovingly cited minutes from a March 19 meeting held between BNSF higher-ups and U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) higher-ups in which a BNSF told PHMSA that “there needs to be [a] disincentive to use DOT 111.”

Those minutes were included as an exhibit to the complaint.

Yet in the Reuters article, CP Rail spokesman Ed Greenberg stated that his company had the same goal as BNSF: to “encourage shippers to work towards an upgraded tank car standard for crude by rail shipments.”

AFPM Lobbies vs. Regs, Funds Denial

As first reported here on DeSmogBlog, AFPM has attended meetings with the Obama White House’s Office of Information and Regulatory Affairs (OIRA), which serves as an industry-friendly mediator between industry and executive-level regulatory agencies like PHMSA. BNSF top-level lobbyists, executives and attorneys have also had a seat at the table at those myriad meetings.

PHMSA is expected to publish a final version of updated oil-by-rail regulations in May, after announcing a delay in January. AFPM also submitted comments in opposition to PHMSA‘s draft rules in September 2014, arguing it’s an issue of train tracks and people, not the rail cars themselves.   

“While AFPM supports appropriate and effective mitigation, several of PHMSA’s proposed measures fail to take meaningful steps toward preventing derailments, risk significantly reducing crude rail capacity, and cost billions of dollars,” wrote AFPM. “AFPM respectfully submits that any effort to enhance rail safety must begin with addressing the primary root causes of derailments and other accidents: (1) track integrity and (2) human factors.”

Beyond advocating against oil-by-rail regulations, AFPM also funded a May 2014 study concluding that Bakken crude oil is no more chemically volatile than any other oil.

“Bakken crude oil was found to be well within the limits for what is acceptable for transportation as a flammable liquid,” the report concludes. “This survey shows that Bakken crude oil does not pose risks that are significantly different than other crude oils and other flammable liquids authorized for transportation as flammable liquids.”

BNSF Responds — Sort Of

Five days after AFPM filed its lawsuit, BNSF responded in the form of a press release. Well, kind of.

“BNSF continues to review the complaint…challenging [its] recent implementation of rate discounts for crude shippers that load their product in rail cars with improved safety characteristics,” stated the company.

“This rate structure is also consistent with BNSF‘s ongoing efforts to ensure the safe transport of crude on our network, including voluntary adoption of enhanced operating practices around crude oil shipments and requesting the federal government to make newer, safer tank cars the new standard for crude-by-rail shipments, replacing the older DOT-111 and non-modified CPC-1232 cars.”

Purposeful Distraction?

So, what gives? Why a lawsuit against BNSF by AFPM and not against CN Rail nor CP Rail? No clear answers exist and AFPM did not respond to a request for comment sent by DeSmogBlog.  

Despite the murkiness at play, some answers do exist.

Firstly, CPC-1232 tanks cars — the centerpiece of the lawsuit — have proven no “safer” than DOT-111 tank cars to begin with. And secondly, the lobbying and advocacy track records of both BNSF and AFPM demonstrate they both prefer the status quo over robust regulations, which would hurt their corporate bottom lines.

Purposeful or not then, at the end of the day, the lawsuit still serves as a distraction for the central issues in the oil-by-rail debate as the May deadline nears for PHMSA to publish its final regulations.

Image Credit: Cartoonresource | Shutterstock

Bakken Crude, Crude By Rail, Emergency Readiness & Response, Federal Regulation (U.S.), Oil spill, Rail Safety, Rivers, Sensitive wildlife habitats, Tank car design

Heitkamp Presses OIRA To Finish Oil Train Rules; DeFazio presses for info

Repost from Roll Call

Heitkamp Presses OIRA To Finish Oil Train Rules

By Roll Call Staff, March 13, 2015 9:55 a.m. 
Sen. Heidi Heitkamp, D-N.D., center, is urging OIRA to "quickly finalize" regulations on rail shipment of crude oil. (Photo By Bill Clark/CQ Roll Call)
Sen. Heidi Heitkamp, D-N.D., center, is urging OIRA to “quickly finalize” regulations on rail shipment of crude oil. (Photo By Bill Clark/CQ Roll Call)

“Oh Ira, why can’t you work more quickly?” That might’ve been what tunesmith George Gershwin said to his lyric-writing brother Ira Gershwin. But for transportation purposes, it’s essentially what Sen. Heidi Heitkamp, D- N.D., said Thursday to OIRA – pronounced “oh-Ira” – the Office of Information and Regulatory Affairs, within the Office of Management and Budget.

OIRA is where proposed regulations go for a final vetting and it now has under review a series of proposed rules on more robust oil tank cars and safer transport of crude oil.

In a letter to OMB director Shaun Donovan, Heitkamp urged OIRA to “quickly finalize” the regulations so that shippers and first responders can know what they must do to more safely ship crude oil. Much of that oil comes from the Bakken formation in Heitkamp’s state and in Montana and is carried by rail to refineries on the East Coast and the West Coast.

She cited the December 2013 derailment, explosion and fire in Casselton, N.D., noting that while no one was killed in that incident “we were lucky… but we cannot depend on luck.”

Meanwhile House Transportation and Infrastructure Committee ranking member Peter A. DeFazio, D- Ore., has asked the Government Accountability Office to report to him on what railroads and the federal government are doing to prepare for an oil train derailment and fire “particularly in the most remote and environmentally sensitive areas”

DeFazio specifically asked the GAO to examine what the railroads are doing to preposition “critical resources necessary to respond to spills in both urban and rural areas, including forest lands, with limited road access, prone to catastrophic fire, or at-risk due to long-term drought” and to preposition “critical resources to contain and clean-up oil spills into rivers or other water bodies.”

As the Oregonian reported last year, “Eighteen oil trains a week move along the Washington side of the Columbia River Gorge.” Part of the gorge is a national scenic area and it borders national forests.

Bakken Crude, Crude By Rail, DOT-111, Export of North American crude, Oil stabilization, Reid vapor pressure levels, Tar sands crude, Train speed, Volatile gases

Regulators Ignore One Proven Way to Eliminate Bakken Bomb Trains: Oil Stabilization

Repost from DeSmogBlog

Regulators Ignore One Proven Way to Eliminate Bakken Bomb Trains: Oil Stabilization

Justin Mikulka, 2014-08-08

On the same day that the Obama administration released long-awaited new safety regulations for the oil-by-rail industry, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released another report with their testing results for Bakken crude oil. The conclusion reached by PHMSA is that Bakken crude oil “is more volatile than most other types of crude.”

These results don’t come as a surprise since the five oil trains that have crashed and exploded in the last year all were carrying Bakken crude.

Of course, the new regulations released simultaneously do not require the oil industry to do the one thing that would eliminate this problem: oil stabilization.  A well known and proven method for removing the natural gas liquids from crude oil that makes the oil “stable” and non-explosive.

While the new regulations do not offer any proposals to require the oil industry to remove the volatile components of Bakken crude, on page 144 of the proposal they do acknowledge that this is possible. They request comments on the following question:

Is the current exception for combustible liquids sufficient to incentivize producers to reduce the volatility of crude oil for continued use of existing tank cars?

Essentially they are acknowledging that if the industry stabilized the oil it wouldn’t be explosive and thus they would be able to continue to use the existing DOT-111 rail cars to transport it. Just like those tank cars will be able to transport Alberta tar sands oil because it is not explosive.

The week before the release of the new regulations, the American Petroleum Institute and the American Association of Railroads released a joint statement stating that they were in agreement on two things that shouldn’t be part of the finalized new regulations — lower train speeds and mandatory stabilization. And while the proposed regulations do offer some requirements for lower trains speeds, they include nothing about mandatory stabilization.

In May, Myron Goforth, the president of Dew Point Control LLC, a manufacturer of stabilization equipment put the situation in simple terms for Reuters.

“It’s very easy to stabilize the crude – it just takes money,” Goforth said. “The producer doesn’t want to pay for it if he can ship it without doing it.”

So without regulations to require the stabilization of Bakken crude, the public will be put at risk so that the oil companies can make higher profits. And with the new proposed regulations, the regulators have made it clear they will not stand in the way of Big Oil to keep the people safe.

The good news for the public is that Big Oil’s greed might actually lead to them having to stabilize Bakken crude.

There is currently a major lobbying effort by the oil industry to lift the ban on exporting American crude oil. And in order to ship the oil to other countries, the oil companies may be required to stabilize the Bakken crude. One industry analyst recently commented to Platts on what would happen if stabilization was required for export.

“You could stabilize and go. You’d still have to put it into rail cars and ship it to the coast, but at least you’d be selling it at a global market price instead of at the WTI discount. Who wouldn’t do that? Everybody would do it.”

It isn’t like the regulators weren’t aware of this possibility before they put out the new proposed regulations for oil by rail. In the many private meetings held at the Office of Information and Regulatory Affairs (OIRA) prior to the release of the regulations, one company stood out from the oil and rail companies making up the majority of the meetings: Quantum Energy Ltd.

On June 2nd Quantum Energy met with OIRA and presented a simple three-page presentation. The presentation explains how regular crude oil has a Reid Vapor Pressure (RVP) of 5-7 psi and Bakken crude has an RVP between 8-16 psi. To put that in perspective, gasoline typically has a RVP of 9 psi.

Higher RVP correlates to higher volatility and explosiveness.

The last slide in the Quantum presentation shows that “post stabilization” Bakken crude would have a RVP of 1.5 – 6 psi.

So why was an energy company arguing the case for stabilization to OIRA prior to the new regulations? Because they are in the stabilization business and they are getting ready for the export ban to be lifted.

Russell Smith, executive vice president for Quantum, explained their position to Platt’s prior to the release of the new regulations.

“We’re not advocating if they do or if they don’t [require stabilization]. Quite frankly, we don’t care. Our business plan is centered around exportability.”

It appears that the safety of the people located within the blast zones of the bomb trains will not ultimately be addressed by regulators until the oil can be shipped to other countries, at which point they will require the oil to be stabilized to reduce the risk of explosions.

As the analyst said, “Who wouldn’t do that? Everybody would do it.”

Image credit: Lac-Megantic deadly oil-by-rail disaster, via Shutterstock.