Tag Archives: Oil trains

Game Over for the Oil Industry, What Will Benicia Do?

Emergency flaring at Valero Benicia Refinery, May 5, 2017. (Chris Riley/Times-Herald)
By Grant Cooke, Benicia resident and President, AgTech Blends, September 14, 2020
Grant Cooke

During the 2016 resistance to Valero’s horrendous attempt to bring crude oil by rail into Benicia, I urged the city council to rethink its dependence on Valero for the bulk of its tax support. I suggested then that we move away from being a “company town” to one that embraced a more knowledge-based economic model with a diversified tax base.

I pointed out that as the world’s industrial nations shift from carbon-driven economies that threatened severe climate disruption and environmental catastrophe to a clean energy driven model, those mega-trend shifts would have significant impact on our little town.

I noted that the era of the Bay Area’s refineries was drawing to a close and that most—including Valero—would be closed before mid-century.

It was not a popular observation, even though at the time there was a rumor that all five Bay Area refineries were for sale, but title couldn’t change hands because the environmental cleanup was prohibitive. Besides, the oil industry’s business model of ever-increasing demand was suspect.

Well, then the nation’s leadership banked a hard right, the Environmental Protection Agency was gutted, the heavy oil interests broke free, and the carbon boys rode tall as the U.S. became a net exporter and one of the world’s major oil producers.

2019 saw the highpoint. Production was up 11 percent to new historic U.S. highs of over 12 million barrels per day. In 2018 Brent Crude’s price was over $70 per barrel. It slipped to $65 per barrel in 2019, but production was at a fever pitch.

And then it all collapsed. The Saudis and the Russians did a circular firing squad, OPEC stumbled, supply burgeoned, the novel coronavirus hit, and the U.S. economy tanked. At this spring’s lows, Brent Crude dropped to about $34 per barrel.

Now that the Saudis and Russians have given up their battle, Brent has budged a bit to $44 per barrel.

With the economic collapse so too has the demand for gasoline. Storage is full, demand is way down, supply is way up.

Valero as a refiner makes money when oil prices slide. As long as supply increases and oil prices drop but demand for gas is constant, money is made, profits are up, bonuses and dividends are paid.

Back in June 2018, Valero was in its glory, and the stock price was a couple of cents under $127 per share. The fall was ugly. By April 2020, it broke down to around $31. It has since rebounded a bit—what the financial folks colorfully describe as a Dead Cat bounce—to the mid-$50s. Most likely, it will turn down again and the dividend will be reduced.

What’s equally as devastating to Valero and the oil industry, is that Covid-19 and the subsequent economic collapse has pushed clean energy forward into the nation’s recovery plans. A huge national infrastructure plan is on the horizon, much of it encompassing renewable energy.

This is the TESLA tsunami with its market cap of $144 billion, and the growing consumer recognition that e-vehicles are better, faster, and cleaner than gas-powered cars. E-vehicles and hybrids are the growing segment of the auto market.

About 13 percent of California’s vehicles are e-vehicles or hybrids, and the percentage is growing with the state’s goal of 5 million zero emission vehicles on the road by 2030.

Pickups and commercial vehicles like trucks and forklifts are turning to electric motors for their increased power and torque. Even in the mining industry, electric, autonomous vehicles are being phased in to reduce costs and improve efficiency.

Eventually, there won’t be any more diesel trucks idling in Oakland’s port, and the incidence of asthma will drop significantly in nearby neighborhoods.

The oil industry needs to look no further for discouraging news than the recent announcement by General Motors, the largest U.S. automaker, that it is converting most of its fleet to electric power. Led by Cadillac, GM intends to have 20 electric nameplates by 2023, including an electric Hummer and a rumored Corvette that will hit 200 mph to compete with the 2021 Ford Mustang Mach-E.

Further, Southern California’s Hyperion just introduced the XP-1, a mind-blowing mega car powered by hydrogen with a top speed over 220 mph and a range of 1,000 miles on a tank of hydrogen. Europe already has hydrogen-powered buses, and hydrogen fuel cell technology will only hasten the development of carbon-free vehicles.

Finally, and what really should worry Valero and Benicia, is that Phillips 66 just announced that they are converting the Rodeo facility from refining crude oil to a renewable fuels plant using cooking oil and food wastes to produce motor fuels. The conversion should be finished in 2024.

The oil industry is not known for its vision and if Phillips sees that the carbon era is over, most likely it is.

As the world transitions away from carbon energy, the remaining crude-based Bay Area refineries will suffer, and some will lock their gates. The money isn’t there for the environmental cleanup, so the cities—Benicia, Martinez, Pinole, Richmond—will be left without tax revenue and worse, holding the bag for the hazardous waste.

The November election is critical for our nation, and equally important for our town. Some city council candidates are being funded by the oil industry, in a last-ditch effort to cement political power and influence, preserve profits, and probably re-introduce a Crude-by-Rail agenda.

The oil industry and union Political Action Committee, or PAC, has in fact set aside $250,000 this year to steer the 2020 election to their chosen candidates. It would be tragic for Benicia’s if they succeed.

The future for Benicia is not in clinging to the century-long carbon industry that is in decline. Benicia’s future is, or at least should be, in the knowledge-based economy. Science, technology and innovation are the drivers that create wealth and municipal security in the Bay Area. That is where the future is, not in the gas pumps.

Benicia is facing a severe challenge. The carbon-based tax structure that supported its amiable lifestyle with a full range of municipal services is ending.

Allowing a last gasp effort by the oil industry to control the city’s future is a terrible idea. That game is, and should be, over.

I’m voting for and supporting Steve Young for mayor. (And no, Steve has not approved this message.)


Grant Cooke is a Benicia resident and co-author of two books:
By Woodrow Clark II and Grant Cooke, published by Elsevier and available at Amazon:
Grant Cooke
President, AgTech Blends
https://agtechblends.com

Kamala Harris sent 2 important letters to the City of Benicia

By Roger Straw, August 11, 2020

Future Vice President Kamala Harris remembered in Benicia for her strong support

Kamala Harris, former California Attorney General and current Vice Presidential running mate for Joe Biden

Joe Biden’s nominee for Vice President, California Senator Kamala Harris, has a remarkable connection for many of us here in Benicia.  Her support for a safe and healthy world was incredibly important in the 2016 defeat of Valero Benicia’s dirty and dangerous oil train proposal.  The story should be told now, to honor Harris’ candidacy and to encourage support for a Biden/Harris ticket among all who care about clean air, land and water.

During our 3½ year battle to defeat Valero Benicia’s Crude By Rail proposal, then California Attorney General Kamala Harris wrote two letters challenging Valero’s project and the City of Benicia’s environmental review.  Her support was critical in support of local organizing efforts by Benicians for a Safe and Healthy Community and others far and wide.

Harris’ first letter came on October 2, 2014.  The letter is summarized and linked here:

CALIFORNIA ATTORNEY GENERAL LETTER CRITICAL OF VALERO DEIR

OCTOBER 8, 2014, Summary, from p. 2: Unfortunately, the DEIR for this Project fails to properly account for many of the Project’s potentially significant impacts pursuant to the California Environmental Quality Act(CEQA). Specifically, the DEIR: 1. … Continue reading California Attorney General letter critical of Valero DEIR→

Harris’ support added incalculable weight to the credibility of local and regional organizers, and caught the attention of news agencies across the country:

BLOOMBERG: CALIFORNIA AG REJECTS TRADE-SECRET CLAIMS FOR CRUDE-BY-RAIL

OCTOBER 22, 2014, Repost from Bloomberg News By Victoria Slind-Flor – California Attorney General Kamala Harris expressed reservations about the trade-secret provisions in a proposal for a crude-by-rail project in Benicia, California. In a letter to the city’s Community Development Department, she said the draft environmental impact report for … Continue reading Bloomberg: California AG Rejects Trade-Secret Claims for Crude-by-Rail→

RAILROADS FILE SUIT AGAINST STATE OF CALIFORNIA

OCTOBER 9, 2014, Repost from The Sacramento Bee – By Tony Bizjak and Curtis Tate – The battle over crude oil trains in California intensified this week, reaching into the legal sphere with potential national repercussions. The state’s … Continue reading Railroads file suit against state of California→

A year and a half later, on April 14, 2016, Harris sent a second letter asserting that Benicia’s Planning Commission and City Council have every right to deny a land use permit for Valero’s proposed Crude by Rail offloading rack.  I highlighted her convincing prosecutorial language in my headline:

CALIFORNIA ATTORNEY GENERAL: “FOR BENICIA TO TURN A BLIND EYE…”

APRIL 15, 2016, By Roger Straw – California Attorney General Kamala Harris: letter disagrees with City of Benicia staff, consultants and Valero Today the City of Benicia received a letter from California Attorney General Kamala Harris disagreeing with City staff, consultants and Valero Refinery. The letter asserts that Benicia’s Planning Commission and City Council have every right to deny a … Continue reading CALIFORNIA ATTORNEY GENERAL: “For Benicia to turn a blind eye…”→

And again, her challenge was picked up by media outlets far and wide.  A sampling:

EAST BAY EXPRESS: ATTORNEY GENERAL HARRIS: BENICIA HAS POWER TO REJECT OIL FACILITY

APRIL 15, 2016, By Jean Tepperman – In a strongly-worded letter sent Thursday to City of Benicia officials, California Deputy Attorney General Scott J. Lichtig wrote that Valero, the City of Benicia’s planning staff, and an outside attorney advising the … Continue reading EAST BAY EXPRESS: Attorney General Harris: Benicia Has Power to Reject Oil Facility→

SACRAMENTO BEE: CALIFORNIA ATTORNEY GENERAL KAMALA HARRIS CHALLENGES BENICIA OIL PLAN

APRIL 14, 2016, By Tony Bizjak – HIGHLIGHTS: • Harris said Benicia has the right to say no, is not pre-empted by federal law • Two 50-car oil trains would travel daily through downtown Sacramento • Valero spokesman: ‘We remain confident … Continue reading SACRAMENTO BEE: California Attorney General Kamala Harris challenges Benicia oil plan→

Finally… Benicia wasn’t the only recipient of Harris’ environmental support during those days.  See also…

DIANE BAILEY: CALIFORNIA ATTORNEY GENERAL LETTER, PROTESTS IN PITTSBURG 1/21/14

JANUARY 18, 2014, Repost from Diane Bailey’s blog, Switchboard, Natural Resources Defense Council California Attorney General Tells Major Oil Terminal Developer, WesPac, to Hold Up in Pittsburg Posted January 17, 2014 by Diane Bailey in Environmental Justice, Health and the Environment, Moving Beyond Oil The California Attorney General, Kamala D. Harris, sent a stark letter to the City of Pittsburg this week warning of … Continue reading Diane Bailey: California Attorney General Letter, Protests in Pittsburg 1/21/14→


For a trip down memory lane, see my permanent archive: The successful effort to STOP oil trains in Benicia, California

(beniciaindependent.com/crude-by-rail-archive/)

Roger Straw

Train carrying crude oil and propane derails in western NY

East Aurora train contained flammable, explosive materials – Rail company refuses to divulge cargo

WKBW, 7 Eyewitness News, by Charlie Specht, May 22, 2020

BUFFALO, N.Y. (WKBW) — Since Monday’s train derailment in East Aurora sparked fears of “bomb trains” carrying toxic substances, the Genesee & Wyoming Railroad has sought to downplay the danger of the crash, stressing that no one was hurt and damage was limited.

But 7 Eyewitness News has learned that despite the company’s refusal to provide a complete accounting of the train’s contents, dozens of railcars that were pulled by the derailed engine were filled with flammable and explosive materials.

And since the railroad opened back up Thursday, even more cars carrying crude oil and propane have quietly rolled through.

“This was really a best-case scenario,” said East Aurora Fire Chief Roger LeBlanc said of Monday’s derailment. “It should have flopped onto Main Street. There should be a crater in the village.”

LeBlanc said the train conductor soon after the derailment approached him with a manifest of the cargo.

“He showed it to me,” LeBlanc said. “He didn’t give it to me. He had a death grip on that thing.”

7 Eyewitness News has learned that despite a railroad company’s refusal to provide a complete accounting of the train’s contents, dozens of railcars that were pulled by the derailed engine were filled with flammable and explosive materials.

The fire chief said the conductor told him the cargo included 19 propane tankers, between 8 to 10 tankers of crude oil — which has caused devastating explosions like the 2013 derailment in Quebec, Canada that killed 47 people — and at least one tanker of butane.

The conductor had “great concern” on his face when mentioning the propane, LeBlanc said.

“I’m thinking, ‘Oh my God, this thing’s gonna go,’” LeBlanc said, adding that thankfully, there were no explosions because the conductor said multiple cars behind the derailed engine were empty.

A railroad spokesman on Thursday said 66 railcars were empty, including 15 of the 17 derailed cars. But 32 railcars were “loaded with a variety of commodities,” according to Michael E. Williams, vice president of corporate communications for Genesee & Wyoming Railroad Services, which runs the Buffalo & Pittsburgh rail line.

Williams repeatedly declined to answer questions about the contents of the 32 cars, other than to say that two of the cars were carrying lumber.

“Railroads do not share train manifests with the general public for security reasons,” Williams wrote in an email. “The train was carrying what was properly tendered to the railroad to transport under its common-carrier obligation. It is safe for your viewers to assume that the loaded cars in the train were carrying commodities that are integral to modern life.”

Williams stated that the train’s manifest was provided “to the incident commander on site, per standard protocol,” but both LeBlanc and Police Chief Shane Krieger said they did not receive copies of the manifest.

First responders like LeBlanc and Krieger said they came away from the experience thankful that East Aurora, with many wood-frame buildings and 19th century historic structures, did not have to deal with a major explosion.

“If it would have hit any of the buildings or the restaurant, it could have been an ignition point,” LeBlanc said. “There’s a lot of things that could have happened.”

Williams stressed that railroads are “by far the safest means of ground freight transportation – much safer than trucks, which are the alternative.”

Still, the transport of flammable cargo appears to be occurring on a regular basis in East Aurora and other small towns lining the tracks from Salamanca to Buffalo.

Just after 11 p.m. Thursday — hours after Genesee & Wyoming announced the re-opening of the track — 7 Eyewitness News witnessed a string of train cars roll above Main Street through the village.

The tanker cars carried the red hazardous material placards for propane and crude oil.

Trump admin’s stunning explanation for easing up on oil trains: Safety no excuse for “inhibiting market growth”

Safety Can’t Be a ‘Pretext’ for Regulating Unsafe Oil Trains, Says Trump Admin

Desmog, by Justin Mikulka, May 20, 2020
Lac-Megantic oil train explosion
Train burning in Lac-Mégantic, Quebec. Credit: Transportation Safety Board of Canada, CC BY-NC-ND 2.0

The federal agency overseeing the safe transport of hazardous materials released a stunning explanation of its May 11 decision striking down a Washington state effort to regulate trains carrying volatile oil within its borders. A state cannot use “safety as a pretext for inhibiting market growth,” wrote Paul J. Roberti, the chief counsel for the Pipeline and Hazardous Materials Safety Administration (PHMSA).

The statement appeared in the Trump administration’s justification for overruling Washington’s oil train regulation, which was challenged by crude-producing North Dakota and oil industry lobbying groups. The Washington rule seeks to limit oil vapor pressure unloaded from trains to less than 9 pounds per square inch (psi) in an attempt to reduce the likelihood that train derailments lead to the now-familiar fireballs and explosions accompanying trains transporting volatile oil.

Roberti wrote: “Proponents of the law insist Washington State has a legitimate public interest to protect its citizens from oil train fires and explosions, but in the context of the transportation of crude oil by rail, a State cannot use safety as a pretext for inhibiting market growth or instituting a de facto ban on crude oil by rail within its borders.”

With this statement, PHMSA is codifying what has been clear for some time at the regulatory agencies responsible for overseeing the transportation of hazardous materials by rail: that is, profits take priority over safety.

Rail Industry ‘Pre-emption’ and Safety Under Trump

A year ago, the U.S. Department of Transportation (DOT), PHMSA‘s parent agency, invoked the same legal argument, known as “pre-emption,” to overrule state efforts to require at minimum two-person crews for operating freight trains. As part of the explanation for that decision, the DOT‘s Federal Railroad Administration announced that it was adopting a policy of deregulation.

DOT’s approach to achieving safety improvements begins with a focus on removing unnecessary barriers and issuing voluntary guidance, rather than regulations that could stifle innovation,” wrote the agency.

A regulatory agency announcing a broad deregulatory agenda was shocking. However, this latest move openly declares that, while Washington state may have an interest in protecting its citizens from “oil train fires and explosions,” that concern should not get in the way of the oil industry’s ability to ship more of its product by rail through the state, apparently even if that increases the risk of oil train fires and explosions to Washington residents. This logic reaches a new level of prioritizing profits over people as regulatory practice.


Historically, or at least, theoretically, government has based regulations on cost-benefit analyses, weighing the costs of complying for the regulated entities against the benefits, such as lives saved or accidents prevented, as a result of the new rules. Here, the DOT‘s new regulatory approach appears to weigh primarily the benefits for the rail and oil industries while downplaying the potential cost in human lives.

However, these industries did argue about costs to get to this point. As DeSmog has repeatedly documented, lowering the vapor pressure of oil below 9 psi is possible through a process called stabilization, which makes oil less volatile and less likely to ignite. Conditioning the oil in this way before loading on trains would require the oil industry to invest in stabilization equipment, which the industry has argued is not economically feasible.

In 2014, Myron Goforth, the president of Dew Point Control LLC, a manufacturer of stabilization equipment, put the situation in simple terms. “It’s very easy to stabilize the crude — it just takes money,” Goforth told Reuters. “The producer doesn’t want to pay for it if he can ship it without doing it.”

DOT‘s May 11 decision notes that “compliance with the [Washington] law can only be accomplished by (1) pretreating the crude oil prior to loading the tank car.” Exactly: Making the oil safe to ship on long, heavy trains through small towns and large cities requires stabilizing, or conditioning, before loading it into tank cars (just as the industry does before loading oil in pipelines or on ocean-going tankers, at least in Texas). DOT makes no argument about how companies could comply with the Washington law, outside of trying to avoid passing through the state entirely or using a different transportation mode other than trains.

A particularly telling clue behind the DOT‘s conclusion that the Washington law should be pre-empted is found in the commenters whose opinions the agency is highlighting: “In light of the infrastructure, equipment, and other logistical issues, the commenters have concluded that pretreating is economically infeasible or unrealistic.”

In this case, the “commenters” the DOT is referencing are members of the oil industry and its lobbyists, including the refinery company Hess Corporation, Marathon Petroleum, the American Petroleum Institute (API), American Fuel and Petrochemical Manufacturers, and the North Dakota Petroleum Council.

At an oil-by-rail conference in 2016, an API official described the industry’s attitude about the prospect of requiring oil stabilization for rail transport: “We in the oil and gas industry see this as a very dangerous conversation.”


In December 2017, Trump’s Federal Railroad Administration repealed an Obama-era rule requiring modern braking systems on oil trains despite overwhelming evidence that these systems improve rail safety. Sarah Feinberg, former head of the Federal Railroad Administration, offered important context about rail industry opposition to that rule.

The science is there, the data is there,” Feinberg said of the efforts to require updated rail braking systems on oil trains. “Their argument is, despite that data, [they] don’t want to spend the money on it.”

That seems to be the rule for overseeing rail safety under the Trump administration. If a rule costs industry money to improve safety and protect the public from oil train fires and explosions, the industry will push back against its regulators, who appear to be pushovers, especially but not exclusively under Trump.

The alternative of prohibiting oil transportation by rail, because it is apparently too dangerous and too costly to do safely, is never even considered.

Ignoring the Science

The latest decision on the Washington state case continues a trend under Trump to overlook robust science when regulating oil by rail. However, you might not know it from the comments of this decision’s supporters.

PHMSA used a single, flawed study from Sandia National Laboratories to support its conclusion that limiting the vapor pressure of oil moved by rail is unnecessary — while the agency ignored all the other established research on vapor pressure, volatility, and ignitability of crude oil.

The North Dakota Congressional delegation opened its statement praising the May 11 decision with lip service to science: “We thank the administration for doing the right thing by putting sound, scientific evidence above partisan politics.”

In the same vein, Ron Ness, president of the North Dakota Petroleum Council, told the Associated Press, “There is nothing unusual about the volatility of Bakken crude oil,” a claim the North Dakota attorney general has also made to argue against the Washington vapor pressure law.

And yet these statements don’t stand up to scrutiny. In my book Bomb Trains: How Industry Greed and Regulatory Failure Put the Public at Risk, I present the evidence that Bakken crude oil’s volatility is higher than other regions and that this factor makes a difference. This crude oil is much more volatile than traditional crude oil from Louisiana or Texas, and that volatility, along with other factors, makes it more likely to ignite in oil train derailments.

WATCH: Justin Mikulka, Sept 2015: The Science of Bomb Trains

As I noted at the time of its publishing, the Sandia Labs study is deeply flawed and does not study the actual issue of oil igniting during train derailments.

As for whether Bakken oil’s volatility is “unusual,” a Wall Street Journal analysis found in 2014 that “Crude oil from North Dakota’s Bakken Shale formation contains several times the combustible gases as oil from elsewhere.” These combustible gases are what give the Bakken oil much higher vapor pressure levels than most other crude oils from the U.S.

The combustible gases in the oil are natural gas liquids like butane and propane, which is why the oil is so volatile.

At the same time that the oil industry tries to say Bakken oil isn’t more volatile than other oils, it argues that Bakken oil’s value lies in these extra natural gas liquids. Stabilizing the oil by removing these gases from the oil not only would cost the industry money but the resulting oil would be worth less to the industry.

The DOT notes as much in its recent decision: “These higher vapor pressure hazardous materials, such as butane, ethane, and other natural gases, are deemed essential and valuable components of Bakken crude.”

The oil industry has no argument to make on a scientific basis here, only an economic one. Reducing the vapor pressure of oil by removing gases like butane and ethane makes it less volatile and less likely to ignite. That is established by research. But the industry has repeatedly argued that removing these flammable gases from the oil would make it less valuable, which is one of its justifications for not stabilizing the oil.

A Second Bakken Bomb Train Boom Could Be on the Way

The only things that have kept the estimated 25 million North Americans living along railroad blast zones safer from dangerous oil trains is the success of activists who have blocked new oil-by-rail projects and oil industry economics. Because transporting oil by rail is more expensive than by pipeline or ocean-going tankers, the industry moves much less oil on trains when oil prices are low.


Oil train protesters in Albany, New York, in May 2016. Credit: Justin Mikulka

With current oil prices at record lows in the U.S. and Canada, it doesn’t make economic sense to move oil by rail, which is good news for the millions of people living along the rails.

However, a current legal battle over the Dakota Access pipeline could make moving Bakken oil by rail a major mode of transportation, perhaps regardless of oil price.

A judge recently set a hearing to review the permitting process for the controversial pipeline, currently moving 500,000 barrels of crude per day. Depending on the outcome, that hearing could result in the judge vacating the pipeline’s permits, shutting it down and diverting all of that Bakken oil back onto the rails in a big way, at levels that would surpass the records of 2014. The Obama administration passed oil train safety regulations in 2015 in response to the fiery accidents and oil spills that coincided with the boom in oil train traffic.

The Trump administration has steadily worked to roll back the modest progress of those safety rules, with the last one, on vapor pressure for oil by rail, withdrawn from the rulemaking process the very same day the DOT pre-empted Washington’s vapor pressure rule.

Now, an essentially unregulated oil-by-rail industry poses a real risk to public safety and the environment. With the Trump administration shooting down Washinton’s rule and repealing previous safety regulations, the risks of moving volatile oil by rail are essentially the same as in 2013. That was the same year a train hauling Bakken oil exploded in downtown Lac-Mégantic, Quebec, and killed 47 people.

Today, Bakken oil is just as volatile — and dangerous. The trains pulling upwards of a hundred cars of oil have the same outdated braking systems. Regulators have no requirements overseeing train track integrity or wear (the two latest oil train derailments and fires in Canada were likely because of track failures). There are no regulations on train length. And while rail companies have phased in a newer class of tank cars, those cars have ruptured in every major derailment involving oil and ethanol trains.

The accident in Lac-Mégantic happened almost seven years ago. An early Wall Street Journal article after the accident quoted an oil industry executive who said, “Crude oil doesn’t explode like that.”

Which is true in most cases. But Bakken crude does explode like that because it is full of gases like butane, is highly volatile, and has much higher vapor pressure than most other crude oils.

While that doesn’t have to be true, the Trump administration is taking steps to make sure it is.

Main image: Train burning in Lac-Mégantic, Quebec. Credit: Transportation Safety Board of CanadaCC BYNCND 2.0