Tag Archives: Surface Transportation Board (STB)

SAN FRANCISCO CHRONICLE: Benicia’s rejection of oil trains could reverberate across country

Repost from the San Francisco Chronicle

Benicia’s rejection of oil trains could reverberate across country

By Kurtis Alexander, 9/21/16 5:11pm
The Valero refinery is seen in the background behind signage for a railroad crossing on Wednesday, October 22, 2014 in Benicia, Calif. Photo: Lea Suzuki, The Chronicle

The Valero refinery is seen in the background behind signage for a railroad crossing on Wednesday, October 22, 2014 in Benicia, Calif. Photo: Lea Suzuki, The Chronicle

Benicia’s rejection of plans to bring trains filled with crude oil to Valero Corp.’s big refinery in the city was hailed Wednesday by critics of the country’s expanding oil-by-rail operations, who hope the flexing of local power will reverberate across the Bay Area and the nation.

Of particular interest to environmentalists and local opponents, who for years have argued that Valero’s proposal brought the danger of a catastrophic spill or fire, was a last-minute decision by U.S. officials that Benicia’s elected leaders — not the federal government — had the final say in the matter.

Word of that decision arrived just before the City Council, in a unanimous vote late Tuesday, dismissed Valero’s proposal for a new $70 million rail depot along the Carquinez Strait off Interstate 680. Valero had said the project would not only be safe but bring local jobs, tax revenue and lower gas prices.

“We’re pleased with the decision and the implications it will have across the country,” said Jackie Prange, a staff attorney for the Natural Resources Defense Council, one of several groups opposed to the project. “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.”

As oil production has boomed across North America, so has the need to send crude via railroad. The uptick in tanker trains, though, has been accompanied by a spate of accidents in recent years, including a 2013 derailment in the Quebec town of Lac-Megantic in which a 72-car train exploded and killed more than 40 people.

The authority of communities to limit oil trains has been clouded by the assertion of some in the petroleum industry that local officials don’t have jurisdiction to get in the way. Companies like Valero have contended that railroad issues are matter of interstate commerce — and hence are the purview of the federal government.

Shortly before Tuesday’s meeting, however, Benicia officials received a letter from the U.S. Surface Transportation Board, which wrote that Valero, based in Texas, was not a railroad company and that the proposed rail terminal fell under city jurisdiction.

“It’s what I was waiting for to help me make my vote more defensible,” said Councilman Alan Schwartzman at the meeting.

Earlier this year, Valero had asked the Surface Transportation Board for “preemption” protection for the project after Benicia’s Planning Commission rejected the proposal. The plan proceeded to the City Council upon appeal.

The plan called for oil deliveries from up to two 50-car trains a day, many passing through several Northern California communities en route from the Bakken shale formation in North Dakota. Those trains would carry as many as 70,000 barrels of oil.

The company billed the project as a way to keep gasoline prices low in the absence of a major oil pipeline serving the West Coast. Crude is currently brought to the Bay Area mostly by boat or through smaller pipelines.

On Wednesday, Valero officials expressed frustration at the city’s decision.

“After nearly four years of review and analysis by independent experts and the city, we are disappointed that the City Council members have chosen to reject the crude by rail project,” spokeswoman Lillian Riojas wrote in an email. “At this time we are considering our options moving forward.”

The vote directly hit the city’s pocketbook. Nearly 25 percent of Benicia’s budget comes from taxes on the oil giant, and the city coffers stood to grow with more crude. The refinery employs about 500 people, according to city records.

But the city’s environmental study showed that oil trains presented a hazard. The document concluded that an accident was possible on the nearly 70 miles of track between Roseville (Placer County) and the refinery, though the likelihood was only one event every 111 years.

The document also suggested that much of the crude coming to the Bay Area from North Dakota, as well as from tar sands in Canada, was more flammable than most.

Several cities in the Bay Area and Sacramento area joined environmental groups in calling for rejection of the project.

“The council’s vote is a tremendous victory for the community and communities all throughout California,” said Ethan Buckner of the opposition group Stand, who was among more than 100 people who turned out for the council’s verdict. “At a time when oil consumption in California is going down, projects like this are unnecessary.”

At least two other plans are in the works for oil delivery by rail elsewhere in the region — in Richmond and Pittsburg. A handful of other proposals have been put forth in other parts of California, including the expansion of a rail spur at a Phillips 66 refinery in San Luis Obispo County, which is scheduled to be heard by the county planning board Thursday.

Prange, with the Natural Resources Defense Council, said this week’s finding by the Surface Transportation Board gives cities the confidence to reject the proposed oil trains, if they wish to do so.

“It reaffirms the power of local government to protect their citizens from these dangerous projects,” she said.

U.S. oil deliveries by rail have grown quickly, from 20 million barrels in 2010 to 323 million in 2015, according to government estimates. In response, federal transportation officials have worked to improve the safety of oil-carrying cars with new regulations.

But over the past year, rail deliveries nationwide have slowed, in part because of the stricter rules as well as local opposition, falling crude prices and new pipelines.

Critics have complained that the tightened rules have fallen short, pointing to incidents like a June train derailment in Mosier, Ore., which spilled hundreds of thousands of gallons of crude into the Columbia River. Leaders in Oregon are discussing a statewide ban on crude trains.

Kurtis Alexander is a San Francisco Chronicle staff writer.
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Recent updates on the Benicia Independent

By Roger Straw, July 22, 2016

benindylogo08a(150px)In addition to RECENT POSTS (see at left), here are some recent updates and additions to the main pages here on the Benicia Independent …

    • BACKGROUND PAGE - Updates at bottom of page on Valero’s appeal of the Planning Commission’s unanimous denial, City Council hearings, a vote to delay until September 20, 2016, and documents related to the Surface Transportation Board
    • PROJECT DOCUMENTS: Valero appeal to the City Council and Petition To Surface Transportation Board, including A flood of STB filings at deadline on 7/8/16
    • PROJECT REVIEW: Public Comments 2016, including hearing transcripts and written comments
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Oil train safety concerns cast shadow over cross-border rail deal

Repost from McClatchyNews
[Editor:  Note the significant section on bridge safety - "In downtown Milwaukee, Canadian Pacific’s oil trains cross a 99-year-old steel bridge over South 1st Street that shows visible signs of deterioration. Some of beams supporting the structure are so badly corroded at the base that you can see right through them.  In Watertown, just west of the derailment site, the railroad crosses Main Street on a bridge with crumbling concrete supports embedded with its date of construction: 1906."  - RS]

Oil train safety concerns cast shadow over cross-border rail deal

HIGHLIGHTS
• Merger would create largest railroad on continent
• Canadian Pacific, Norfolk Southern transport oil
• Derailments, bridges under scrutiny in Wisconsin

By Curtis Tate, November 25, 2015
Norfolk Southern and Canadian Pacific locomotives lead an empty oil train west at Richmond, Va., on Oct. 14, 2014. The Canadian railroad last week made public its offer to take over Norfolk Southern. The $28 billion deal, if approved by shareholders and regulators, would create the largest railroad in North America.

Norfolk Southern and Canadian Pacific locomotives lead an empty oil train west at Richmond, Va., on Oct. 14, 2014. The Canadian railroad last week made public its offer to take over Norfolk Southern. The $28 billion deal, if approved by shareholders and regulators, would create the largest railroad in North America. Curtis Tate McClatchy

WATERTOWN, WIS. - Concerns about the safety of crude oil trains loom over a proposed rail takeover that would create the largest rail system in North America.

Last week, Alberta-based Canadian Pacific made public its plan to acquire Virginia-based Norfolk Southern. The $28.4 billion deal would need to be approved by company shareholders and federal regulators, a process that could take at least 18 months.

The railroads are key players in the transportation of crude oil from North Dakota’s Bakken shale region to East Coast refineries. Currently, Canadian Pacific transfers the shipments to Norfolk Southern at Chicago. The combined company could offer a seamless path the entire distance to the East Coast.

Though both companies have so far escaped the most serious crude by rail incidents involving spills, fires and mass evacuations, they are likely to face fresh scrutiny of their safety practices and relationships with communities if they agree to a deal.

In Wisconsin, the railroad has clashed with environmental groups and elected officials over the condition of its aging bridges. And in spite of calls from members of Congress and the Federal Railroad Administration, the railroad refuses to share its bridge inspection documents with local officials, citing “security concerns.”

“I’ve reached out to (Canadian Pacific) personally to try to get them to be better neighbors,” said Rep. Ron Kind, D-Wis. “The response hasn’t been that good.”

Two Canadian Pacific trains derailed earlier this month in Watertown, a city of 24,000 about an hour west of Milwaukee.

The first occurred on Nov. 8 when 13 cars of an eastbound oil train bound from North Dakota to Philadelphia derailed and spilled about 500 gallons. About 35 homes were evacuated for more than a day. Then on Nov. 11, a second train derailed at the same spot as the first. Though no one was injured, the back-to-back incidents shook residents.

“If safety was really important, you wouldn’t have two trains derail in one town in one week,” said Sarah Zarling, a mother of five who lives a few blocks from the track and has become an activist on the issue.

THE FEDERAL SURFACE TRANSPORTATION BOARD, WHICH REVIEWS RAILROAD MERGERS, HAS BEEN SYMPATHETIC TO CONCERNS FROM THE PUBLIC ABOUT THE IMPACTS OF INDUSTRY CONSOLIDATION.

In a statement, Canadian Pacific spokesman Andy Cummings said the railroad was the safest in North America for 12 of the past 14 years.

“It is good business for us as a railroad to operate safely,” he said, “and the statistics clearly show we are doing that.”

In downtown Milwaukee, Canadian Pacific’s oil trains cross a 99-year-old steel bridge over South 1st Street that shows visible signs of deterioration. Some of beams supporting the structure are so badly corroded at the base that you can see right through them.

In Watertown, just west of the derailment site, the railroad crosses Main Street on a bridge with crumbling concrete supports embedded with its date of construction: 1906.

Cummings said both bridges are safe and that their appearance doesn’t indicate their ability to safely carry rail traffic. Still, he said the company is working on a website that would explain its bridge management plan and offer a way for the public to raise concerns.

“We do understand that we have an obligation to reassure the public when questions arise about our bridges,” he said.

Railroads carry out their own bridge inspections under the supervision of the Federal Railroad Administration. In September, Administrator Sarah Feinberg sent a letter to railroads urging them to be more open about their bridge inspections and conditions.

Addressing a rail safety advisory panel in early November, Feinberg said her phone was “ringing off the hook” with concerned calls from the public and lawmakers.

“They are frustrated, and frequently they are scared,” she said, “because the absence of information in this case leaves them imagining the worst.”

$340 Million – Amount of settlement for survivors of 2013 Quebec oil train disaster. Canadian Pacific was the only company that declined to contribute.

Much of the concern about the condition of rail infrastructure stems from series of derailments involving crude oil and ethanol. Including the Watertown derailment this month, there have been 10 derailments with spills or fires this year in North America.

In the worst example, an unattended train carrying Bakken crude oil rolled away and derailed in the center of Lac-Megantic, Quebec, in July 2013. The subsequent fires and explosions leveled dozens of buildings and killed 47 people.

Canadian Pacific was the only company among roughly two dozen that declined to contribute to a $340 million settlement fund for the survivors. The railroad denies any responsibility in the disaster, though it transported the derailed train from North Dakota to Montreal, where a smaller carrier took control.

While the railroad last month dropped its opposition to the settlement, it could still be in court. A Chicago law firm has threatened to bring wrongful death lawsuits against the railroad in the next 18 months.

Cummings said the company “will continue to defend itself in any future lawsuits.”

While it’s not clear what issues will ultimately decide the fate of proposed merger, the federal Surface Transportation Board, which reviews such transactions, has been sympathetic to concerns from the public about the impacts of industry consolidation.

In 2000, the three-member panel rejected a similar cross-border bid by Canadian National and BNSF Railway to create what would have been the largest North American railroad at the time. The deal failed partly because a series of mergers in the 1990s had created a colossal rail service meltdown.

Because of those problems, and complaints from shippers and members of Congress, the Surface Transportation Board imposed a moratorium on new railroad mergers. There hasn’t been a major rail deal since.

In a cautious statement earlier this month acknowledging Canadian Pacific’s offer, Norfolk Southern responded that any consolidation of large railroads would face “significant regulatory hurdles.”

But speaking to a conference of transportation companies in Florida this month, Canadian Pacific CEO Hunter Harrison sounded confident that shippers would not oppose the deal and that the decision to press forward was largely in the hands of shareholders.

“If the shareholders want it, it’s going to happen,” he said. “It’s just that simple.”

Read McClatchy’s award-winning coverage of oil trains
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