In Benicia, some are wondering about implications for and against Valero’s crude-by-rail proposal
By Roger Straw, November 29, 2014
The business news pages of mainline media are repeatedly trumpeting the dramatic decline in the price of oil. Regular folks here are happy to see gas prices at the pump at or below $3/gallon. Business Insider reports that “The decline in the price of oil has been fast and furious, with oil prices falling more than 30% since June.” This has been near disastrous for some petroleum producers. (See links below for details.)
New Eastern Outlook author William Engdahl offered a broad global political perspective on November 3. According to Engdahl, “The collapse in US oil prices since September may very soon collapse the US shale oil bubble and tear away the illusion that the United States will surpass Saudi Arabia and Russia as the world’s largest oil producer. That illusion, fostered by faked resource estimates issued by the US Department of Energy, has been a lynchpin of Obama geopolitical strategy.”
Engdahl continues, “The end of the shale oil bubble would deal a devastating blow to the US oil geopolitics. Today an estimated 55% of US oil production and all the production increase of the past several years comes from fracking for shale oil. With financing cut off because of economic risk amid falling oil prices, shale oil drillers will be forced to halt new drilling that is needed merely to maintain a steady oil output.”
Will North American crude oil supply dry up sooner than predicted? Will volatile global and American oil pricing make offloading oil trains a riskier business proposition than previously thought?
What are planners at Valero saying about this? More importantly, what are they thinking, and talking about behind closed doors? Will anyone be hitting a pause button on crude-by-rail, or will they be hitting the accelerator?
Action must be taken to reduce the hazards from railroad shipments of Bakken oil
By Carolyn Heising, November 15, 2014
Now is the time to ask: Is the growing practice of using trains to carry highly-flammable crude oil from North Dakota’s Bakken shale field through communities in Iowa safe and even necessary?
Is it free of the hazards that led to the railroad accident in Quebec last year that killed 47 people and destroyed half of the town of Lac-Megantic? Or is it adding to the stress on the rail system?
Iowa is one of a number of states that have become a corridor for the shipment of Bakken crude over the past three years. Canadian Pacific Railway ships heavy loads of oil south through five eastern Iowa counties. BNSF Railway ships crude through four western Iowa counties. The oil is transported to refineries on the Gulf Coast or to pipeline connections.
No question about it, U.S. oil production is booming. The shale revolution is the dominant economic and geopolitical event of the past decade. Its effects have been transformative.
The United States is on the verge of becoming the world’s leading oil producer. OPEC is no longer the threat it once was. The growth in the U.S. energy industry has more than doubled in the past 10 years and is now worth about $1.2 trillion in gross product each year, contributing about 30 percent of the job growth for the nation, according to a study by the Perryman Group.
And the oil boom is likely to continue unless a catastrophic event brings it to a halt.
One reason environmental groups seem relatively calm about railroad shipment of crude oil is that they know what a minor event it is amid the chaos of fossil-fuel production and the dangerous and destabilizing chaos of climate change. A big part of the problem is the paradoxically positive economic effect of shale-oil production, which is loading the atmosphere with an enormous amount of global-warming carbon dioxide and methane.
What’s the answer?
Long-term we need to reduce the amount of oil we use in transportation by shifting to electric cars with batteries powered by renewable energy sources and nuclear power. Right now, action must be taken to reduce the hazards from railroad shipments of Bakken oil, which is much more flammable than conventional crude oil.
Freight railroads have gone from being a relic of the past to being a key mode of transport for oil supplies. Currently about two-thirds of North Dakota’s Bakken oil production is transported by rail. And more than 10 percent of the nation’s total oil production travels by rail.
In the last quarter of 2013, more than 71 million barrels of crude oil were shipped by rail, more than 10 times the volume of oil shipped in 2008. Over the past six months, there have been at least 10 large crude oil spills in the United States and Canada because of railroad accidents.
The U.S. Department of Transportation has responded by proposing speed limits along with a system for classifying the oil and new safety design standards for rail tanker cars.
The railroads say there have been relatively few rail accidents and not much loss of oil, considering the huge quantities of oil being shipped around the country. However, oil companies — which own the oil rail cars — are shipping much of the crude in outdated tank cars called DOT-111s that are vulnerable to puncture in a derailment.
The trains have captured the attention of local emergency responders by the amount of oil they carry — 100-plus tanker cars carrying up to 30,000 gallons of highly flammable fuel are not uncommon. In New Jersey, a key rail route, the trains pass within a few feet of homes and schools in highly populated areas.
Those who believe that slower train speeds alone are the answer should think again. A train hauling Bakken crude derailed in downtown Lynchburg, Va., a bustling city of 75,000 people. Three tanker cars tumbled into the James River. One of the tanker cars ruptured, spilling 30,000 gallons of crude.
Fortunately, no one was killed or injured. But local fire officials, who are accustomed to dealing with oil accidents on a much smaller scale, said the train was traveling within the speed limit. After the Quebec disaster, major rail companies agreed to reduce the maximum speed of oil trains to 40 miles per hour when they are within 10 miles of a major city. Lynchburg set its own speed limit of 25 mph. The train was going slower than 25 mph when it derailed.
Because a lot is riding on rail safety, oil companies should consider what other industries that use trains to haul hazardous cargoes have done to prevent accidents. For example, the nuclear industry uses specially-built freight cars to transport used nuclear-fuel assemblies from one nuclear plant to another. Since the 1960s, there have been thousands of trips involving the rail transport of nuclear waste in the United States, without a single serious accident.
That’s a stellar safety record which bodes well for the rail shipment of nuclear waste to a deep-geologic repository — and nuclear power’s increased use for electricity production.
Admittedly, the number of oil trains and the amount of hazardous cargo they carry is far greater than it is for nuclear companies and most other industries. But if oil companies continue to use puncture-prone tanker cars to haul highly-flammable Bakken crude in 100-car trains traveling at dangerous speeds, the ultimate consequences could be dire, and we will wind up asking ourselves why something more wasn’t done to prevent it.
CAROLYN D. HEISING, Ph.D., is a professor of industrial, mechanical and nuclear engineering at Iowa State University. Contact: firstname.lastname@example.org.