Tag Archives: President Barack Obama

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.

 

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NY Governor Cuomo sends letter to President Obama an hour before Lynchburg explosion

Repost from The Auburn Citizen, Auburn, NY
[Editor: See below for copy of Governor Cuomo’s letter and the New York State Transporting Crude Oil Report.  – RS]

Cuomo to President Obama: Better federal safety standards needed for rail transport of crude oil

April 30, 2014 • Robert Harding
Train Derailment
Firefighters and rescue workers work along the tracks where several CSX tanker cars carrying crude oil derailed and caught fire along the James River near downtown in Lynchburg, Va.., Wednesday, April 30, 2014. Police said that 13 or 14 tanker cars were involved in the derailment. (AP Photo/Steve Helber)

Shortly before a train carrying tankers filled with crude oil derailed and exploded in Lynchburg, Va., Gov. Andrew Cuomo urged the federal government to establish better safety regulations for the rail transport of crude oil to help prevent major accidents from occurring that could pose a threat to New York communities located along rail lines.

Cuomo sent a letter Wednesday to President Barack Obama calling for tougher federal regulations. In the letter, Cuomo included recommendations for the federal government, including new tank car regulations and updated environmental and contingency response plans. He also called for the removal of DOT-111 tank cars, a type of car that has been labeled “dangerous” because of the high risk of explosion if it derails carrying crude oil.

“As a result of the recent boom in domestic petroleum production, New York state is experiencing a dramatic increase in the number of crude oil trains passing through the state from production areas in the upper Midwest to refineries in the mid-Atlantic and Canada,” Cuomo wrote to President Obama. “This type of crude oil, known as Bakken crude, is highly volatile and is being transported in significant volume across the country by inadequate rail tank cars.

“New York and all the states subject to this crude oil boom are extremely vulnerable to the impacts of a derailment, spill, fire or explosion, as demonstrated by three catastrophic incidents in the last nine months involving such trains. I urge your immediate attention to this issue.”

The recommendations for the federal government were included in a report released Wednesday. The report, Transporting Crude Oil in New York State: A Review of Incident Prevention and Response Capacity, was prepared by a handful of state agencies after Cuomo issued an executive order in January.

While the report makes recommendations to the federal government for improving rail transportation safety, emergency preparedness and strengthening environmental protections, the agencies also recommended the state take action in these three areas.

The report also recommends industry changes, including implementation of a web-based information access system by rail companies to provide real-time information on hazardous materials. The agencies also called for an expedited risk analysis for crude oil to determine the safest and most secure rail routes for trains with at least 20 cars of crude oil.

While Cuomo said the state can take steps to be better prepared, he said it’s the federal government’s responsibility to regulate the industry.

“New York will continue to aggressively pursue measures that ensure its safety,” Cuomo wrote. “However, the fundamental responsibility for the safe transportation of crude oil across the country resides with federal agencies.”

Cuomo’s office distributed the governor’s letter to President Obama and the state report about an hour before reports of the train accident in Lynchburg, Va. The News & Advance in Lynchburg reports that an estimated 50,000 gallons of crude oil was spilled in the incident.

After learning of the train derailment, Cuomo issued a statement repeating his call for the federal government to take action.

“Earlier today, I wrote a letter to President Obama urging the federal government take immediate steps to bring much needed and overdue safety regulations to the crude oil transportation system. Just hours later, news comes of yet another serious oil train derailment, this time in Lynchburg, Virginia. Our thoughts and prayers are with any possible victims of this accident,” Cuomo said.

“This is the latest in a series of accidents involving trains transporting crude oil, a startling pattern that underscores the need for action. In addition to steps that states like New York are taking, the federal government must overhaul the safety regulations, starting with taking DOT-111 trains off the rails now. These trains travel through populated communities in upstate New York and we cannot wait for a tragic disaster in our state to act.”

Here is the letter from Cuomo to President Obama:

Gov. Cuomo’s letter to President Obama

Here is the state report on transporting crude oil:

New York State Transporting Crude Oil Report

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