Tag Archives: Tesoro Savage Vancouver Oil Terminal

Crude By Rail, Oil spill, Risk Assessment, State regulation

Washington regulator unaware of oil train consultant’s connections

Repost from The Oregonian / OregonLive
[Editor:  The consultant’s connections with BNSF were noted nearly a month ago here and in Curtis Tate’s McClatchy DC report.  On November 24 Tate wrote, “The rail spill analysis portion of the Washington state draft document was written in part by three consultants who are former employees of BNSF and its predecessor, Burlington Northern. In addition to the state agency for which they prepared the analysis, their clients include BNSF and the Port of Vancouver.”  I  understand that the Washington agency that hired the consultant, the Energy Facility Site Evaluation Council, was asked about the possible conflict of interest in advance of publication of Tate’s article, but they never got back to him.  Staff at the Energy Facility Site Evaluation Council should have been aware well in advance of the Oregonian story.  – RS]

Washington regulator unaware of oil train consultant’s connections

By Rob Davis, Dec. 17, 2015, updated Dec.18, 2015 9:44 AM
vancouver oil train
An oil train parked outside Vancouver, Wash., in 2014. A terminal proposed there would bring four oil trains to the city each day. (Rob Davis/Staff)

A consulting firm that helped write a report underestimating the risks of catastrophic spills from a proposed Vancouver oil train terminal has worked for two groups that will gain financially if the project moves forward.

Stephen Posner, the Washington energy regulator who approved the company’s hiring, didn’t know about all those connections until The Oregonian/OregonLive told him. But he did not answer repeated questions about whether he would investigate further.

Three of the four authors who wrote the risk analysis for Washington’s Energy Facility Site Evaluation Council are former executives of BNSF Railway Co. The railroad would move oil trains to the Vancouver terminal.

The authors’ company, MainLine Management, lists BNSF as a client on its website.

MainLine, which didn’t respond to repeated queries, recently worked for another project supporter: the Port of Vancouver, which owns the land where the terminal would be built.

Much remains unclear about MainLine’s relationships with BNSF and the port. It is not known whether BNSF is a current MainLine client. It’s also unclear whether MainLine’s past work for the port would constitute a conflict.

Washington law prohibits the energy council from hiring consultants with a significant conflict of interest with a project’s applicant or others involved.

MainLine finished its work for the port before it was hired to analyze the terminal. The port awarded a $121,000 contract to MainLine in April 2013 to analyze part of its freight rail system serving the oil train terminal. A port spokeswoman said the final payment was sent to MainLine Sept. 25, 2014, four months before the firm was hired to analyze oil spill risks.

The relationships raise questions about the thoroughness of Washington’s review of the experts it’s using to independently evaluate the Vancouver oil terminal.

The $210 million terminal proposed by Tesoro Corp. and Savage Services is the highest profile project pending before the Washington energy council.

The small agency is designed to be a one-stop permitting shop for major energy projects, studying their impacts and recommending a decision to Gov. Jay Inslee. The governor has final approval.

Posner, the agency’s manager, approved hiring MainLine. He said he was unaware the firm listed BNSF as a client until The Oregonian/OregonLive told him.

But neither Posner nor an agency spokeswoman, Amanda Maxwell, would commit to inquiring further about whether the company has a current connection with BNSF.

Before MainLine was hired, Posner said he discussed the company with Washington’s lead consultant, Cardno. He said his agency relied on Cardno to vet MainLine’s clients and past work.

How did Cardno review MainLine’s potential conflicts? That’s unclear. Posner told The Oregonian/OregonLive to direct that question to Cardno, which didn’t immediately respond.

Cardno has provided written assurance that its subcontractors, including MainLine, are forbidden to discuss the terminal with any outside party, Maxwell said.

“This written assurance provided by Cardno is the basis for trusting in the credibility of the work being performed,” she said.

When we asked Posner whether he was concerned that MainLine could have a conflict, the spokeswoman, Maxwell, interrupted, saying it was inappropriate for him to comment.

“Without having the information, it’s not something he could put in context,” she said.

The agency should have that knowledge and be able to answer such a question, said Robert Stern, a good government advocate who helped write California’s post-Watergate conflict of interest law. He said the energy agency’s review appeared inadequate.

“Maybe they don’t have any conflicts, but how do you know?” Stern said. “There should be something in writing saying we have no conflicts of interest.”

Both BNSF and the Port of Vancouver stand to benefit financially from the project’s construction. The port estimates netting $45 million in lease revenue from the project over 10 years. BNSF has rallied supporters to send comments to the energy council praising the project, saying its construction would strengthen the rail company’s customer base.

Gus Melonas, a BNSF spokesman, didn’t specifically answer a question about whether MainLine is currently under contract with the railroad.

“BNSF does not discuss specific relationships involving contract companies,” Melonas said by email, “however MainLine Management Inc. has worked with Northwest agencies providing modeling on rail related projects.”

If built, the Vancouver project would be the Pacific Northwest’s largest oil train terminal, capable of unloading 15 million gallons of oil from four trains daily. The oil would be put on barges and sent to coastal refineries.

It has drawn strong opposition from Vancouver elected officials and environmental groups amidst a string of fiery oil train explosions nationwide since 2013.

The report co-authored by MainLine lowballed those risks. It called a 2013 oil train spill in Aliceville, Alabama the worst on record, using it to analyze impacts of a disaster in the Pacific Northwest. The study said a slightly larger spill is “the most credible or realistic” worst-case scenario.

But a far larger spill has already happened. An out-of-control oil train derailed and exploded in Quebec in July 2013, fueling a raging inferno that killed 47 people and leveled part of a small Canadian town.

The analysis incorrectly said the Quebec accident spilled just 36,000 gallons of crude. Far more did. Canadian safety regulators concluded 1.5 million gallons escaped from tank cars. Much of it burned in the resulting fire.

Just a third as much oil spilled in the Alabama accident.

Bakken Crude, CPC-1232, Crude By Rail, DOT-111, Federal Regulation (U.S.), Fire, Foam, Let it burn, Oil stabilization, Tank car retirement, Volatility

Sen. Cantwell: Act now on oil trains

Repost from The Columbian
[Editor:  Significant quotes: 1) “BNSF Railway…has offered training to local responders. But that training “just scratches the surface,” said Nick Swinhart, chief of the Camas-Washougal Fire Dept.”  And  2) “About 88 percent of the cars now hauling crude oil in Washington are the CPC-1232 design, said BNSF spokesman Gus Melonas. The railroad plans to phase out all of its older DOT-111 cars from moving crude within the next year, he said. It also plans to retrofit its CPC-1232 cars with internal liners during the next three years, he added.”  – RS]

Cantwell: Act now on oil trains

Senator pushes for changes to improve safety of hauling crude by rail

By Eric Florip, April 8, 2015, 9:20 PM
U.S. Sen. Maria Cantwell, D-Wash., walks past a firefighting rig with Vancouver Fire Department Division Chief Steve Eldred during a visit to Vancouver on Wednesday. Cantwell and local leaders highlighted the risks of crude oil being transported by rail. (Steven Lane/The Columbian)

Now is the time to act to reduce the continued risk of crude oil moving through the region by rail, U.S. Sen. Maria Cantwell said during a visit to Vancouver on Wednesday.

The Washington Democrat and local leaders repeatedly stressed the volatility of the oil itself. Speaking inside Pacific Park Fire Station No. 10 in east Vancouver, the group noted that responders are ill-equipped to handle the kind of fiery derailments and huge explosions that have characterized a string of oil-train incidents across the country recently. In some cases, the fires burned for days after the actual derailment, Cantwell said.

“No amount of foam or fire equipment can put them out,” she said. “The best protection we can offer is prevention.”

Cantwell last month introduced legislation that would immediately ban the use of rail cars considered unsafe for hauling crude oil, and create new volatility standards for the oil itself. The bill would require federal regulators to develop new rules limiting the volatile gas contained in crude that is transported by rail — an important and somewhat overlooked facet of the larger debate over oil train safety, Cantwell said.

Much of the oil that now rolls through Clark County comes from the Bakken shale of North Dakota. Regulators there this month imposed new rules on the volatility of that oil, but critics argue they don’t go far enough. North Dakota, currently in the midst of a historic oil boom, lacks the infrastructure and facilities for more thorough oil stabilization that are commonplace elsewhere.

About two or three oil trains per day now travel through Vancouver on the way to other facilities. A proposal by Tesoro Corp. and Savage Companies to build the nation’s largest oil-by-rail terminal at the Port of Vancouver would more than double that number. The project, now under review, has fixed a spotlight firmly on Vancouver.

“Although crude-by-rail is a national issue, we firmly believe that Vancouver is the epicenter of the conversation,” said Vancouver Mayor Tim Leavitt.

Wednesday’s gathering also included two local fire chiefs, who said their crews don’t have the resources to respond to a major disaster involving an oil train. BNSF Railway, which carries crude oil through the Columbia River Gorge and Southwest Washington, has offered training to local responders. But that training “just scratches the surface,” said Nick Swinhart, chief of the Camas-Washougal Fire Department.

“No first responder is fully prepared for the threat posed by crude oil trains carrying highly volatile oil from North Dakota,” Swinhart said, noting his agency has 54 paid personnel. “The fire resulting from just one exploded oil train car, as you can imagine, would overwhelm our resources very rapidly.”

Concerns about oil train safety go far beyond the oil. Much of the discussion has centered around the tank cars carrying it. Cantwell’s bill would prohibit all DOT-111 and some CPC-1232 model tank cars from hauling crude oil. The move would affect tens of thousands of rail cars currently in use, phasing out older models many believe are inadequate for carrying crude.

About 88 percent of the cars now hauling crude oil in Washington are the CPC-1232 design, said BNSF spokesman Gus Melonas. The railroad plans to phase out all of its older DOT-111 cars from moving crude within the next year, he said. It also plans to retrofit its CPC-1232 cars with internal liners during the next three years, he added.

BNSF expects tank cars to improve as designs evolve and federal rules change, Melonas said, and the company welcomes that trend.

“We are in favor of a stronger-designed tank car to move this product,” Melonas said. “In the meantime, we’re taking steps to make sure we’re moving it safely.”

As for whether BNSF supports Cantwell’s bill, Melonas said the company is still evaluating it.

Near the end of Wednesday’s event at the fire station, officials showed Cantwell a large rig equipped with foam tanks and other features. The Vancouver Fire Department acquired the vehicle as mitigation several years ago when Valero, a company operating at the Port of Vancouver, began handling methanol, said Division Chief Steve Eldred.

The Valero site later became NuStar Energy. NuStar has since applied for permits to handle crude oil at the same facility.

Bakken Crude, Crude By Rail, Derailment, Explosion, Pacific Northwest, Tar sands crude

Pacific Northwest ports wary of crude by rail – Association to issue position paper

Repost from The Columbian, Vancouver, WA
[Editor: Detailed background and history on successful opposition to crude by rail in Oregon and Washington state.  – RS}

Portland port passes on oil-by-rail terminal

While Vancouver pursues project, other Northwest ports aren’t so sure

By Aaron Corvin, January 18, 2015

At one point, the Port of Portland considered a vacant swath of land (pictured above between the rail tracks and water) near its Terminal 6 as a potential site for an oil-by-rail terminal. Instead, the undeveloped tract is now under consideration for a propane export terminal. (Bruce Forester/Port of Portland)

photoThe nation’s public ports, focused on attracting industry and jobs, are largely known as agnostics when it comes to pursuing the commodities they handle.

It doesn’t matter if the shipments are toxic or nontoxic. Ports move cargoes, the story goes. They don’t pronounce moral judgments about them.

However, at least one line of business is no longer necessarily a lock, at least in the Northwest: the transportation of crude oil by rail.

Public concerns about everything from explosive oil-train derailments and crude spills to greenhouse gas emissions and the future of life on the planet are part of the reason why.

In at least two cases in Oregon and Washington, ports decided safety and environmental concerns loomed large enough for them to step back from oil transport. The Port of Portland, for example, eyed as much as $6 million in new annual revenue when it mulled siting an oil-train export terminal, documents obtained by The Columbian show. Ultimately, Oregon’s largest port scrapped the idea because of rail safety and other worries. At one point, it also reckoned that “the public does not readily differentiate between our direct contribution to climate change and actions we enable.”

In Washington, the Port of Olympia adopted a resolution raising multiple safety, environmental and economic concerns. It noted the July 6, 2013, fiery oil-train accident in Lac Megantic, Quebec, which killed 47 people. And the resolution called on the Port of Grays Harbor to rethink opening its doors to three proposed oil-by-rail transfer terminals.

To be sure, there doesn’t appear to be a groundswell of Northwest ports swearing off oil or other energy projects. Yet public concerns aren’t lost on the port industry. Eric Johnson, executive director of the Washington Public Ports Association, said he worries that putting certain commodities such as coal under “cradle-to-grave” environmental analyses sets a bad precedent that could gum up the quest for other port cargoes.

Nevertheless, he said, “we’re concerned about oil-by-rail transportation.” So much so, the association, which represents some 64 ports in Washington, will soon issue a position paper, Johnson said. It will include calls on the federal government to boost the safety of tank cars, and to upgrade oil-spill prevention and response measures. Last week, the National Transportation Safety Board said that assuring the safety of oil shipments by rail would be one of its top priorities for the year.

In Vancouver, meanwhile, critics pressure port commissioners to cancel a lease to build what would be the nation’s largest oil-by-rail transfer operation. Under the contract, Tesoro Corp., a petroleum refiner, and Savage Companies, a transportation company, want to build a terminal capable of receiving an average of 360,000 barrels of crude per day.

In addition to the political pressure, legal challenges dog the project, too. One lawsuit goes to the heart of how ports relate to their constituencies: It accuses Vancouver port commissioners of using multiple closed-door meetings to illegally exclude people from their discussions of the lease proposal.

The port denies the allegations. It has repeatedly said public safety remains its top concern. And it has said the oil terminal won’t get built unless the companies’ proposal wins state-level safety and environmental approvals.

Yet opponents see increased public attention to the safety and environmental impacts of proposed oil and coal terminals as reason to believe ports can no longer easily don the robes of an agnostic. “People are paying attention,” said Brett VandenHeuvel, executive director of Columbia Riverkeeper, one of three environmental groups pressing legal complaints against the Port of Vancouver. “It’s no longer simply the bottom line and the most revenue.”

In the Northwest, the Port of Portland’s decision to temporarily back off oil transport sharply contrasts with the Port of Vancouver’s choice to pursue it. Oil terminal critics use Portland’s decision to hammer the Port of Vancouver.

“I don’t see how an oil terminal is unsafe on the Oregon side of the Columbia (River) and safe on the Washington side,” VandenHeuvel said. “The striking thing is how close in proximity the ports of Portland and Vancouver are and the different approach they’ve taken on oil.”

In an email to The Columbian, Abbi Russell, a spokeswoman for the Port of Vancouver, said the port moves “forward on projects we think have merit and will bring benefit to the port and our community.” She also said the port understands that “every port needs to make decisions that make sense for them.”

‘Protests may occur’

Initially, an oil-train operation made sense to the Port of Portland, too.

It considered three sites: Terminals 4, 5 and 6. It analyzed the production of crude from the Bakken shale formation in the Midwest and from oil sands in Canada. It assessed business risks, including Kinder Morgan’s plan to repurpose an existing natural gas pipeline to connect West Texas crude to Southern California. And it contemplated the “primary specific concern among governments and community groups” over the potential for “oil spills, whether from unit trains, pipelines from the unit trains to the storage tanks to the dock, and barges.”

In May 2013 — about a month after Tesoro and Savage announced their oil terminal proposal in Vancouver — the Port of Portland signed a nondisclosure agreement with an unspecified company (the port redacted its identity in documents) to explore locating an oil export facility near Terminal 6.

Just shy of a year later, however, the port backed away.

In March 2014, it publicly announced that while it was “interested in being part of an American energy renaissance brought on by this remarkable domestic oil transformation” it did not “believe that we have sufficient answers to the important questions regarding environmental and physical safety to proceed with any type of development at this time.”

In an email to The Columbian, Kama Simonds, a spokeswoman for the Port of Portland, said “rail car safety was the primary issue” that led the port to temporarily halt its pursuit of an oil-train terminal.

But the port also worried about damaging “our hard-won positive environmental reputation,” documents show, and noted “other relationships will be affected,” including “other governments, neighborhood associations and civic groups …”

“National environmental groups will be involved — Sierra Club, Bill McKibben’s 350.org, Greenpeace,” it also noted. “Protests may occur.”

And the Port of Portland was aware of the controversy that engulfed its neighbor, remarking that “as seen with the Tesoro project at the Port of Vancouver and other energy-related projects at several other ports on the river system and along the coastline, these kinds of announcements can quickly create opposition, controversy and protests.”

Unlike the Port of Vancouver, whose three commissioners are elected by Clark County voters, the Port of Portland’s nine commissioners are appointed by Oregon’s governor and ratified by the state Senate.

The Port of Portland’s Simonds said Gov. John Kitzhaber wasn’t kept informed of the port’s initial pursuit of an oil-by-rail facility and that “we are not aware of any formal statement issued to the port from the governor’s office.”

Nowadays, she said, the port pursues “other energy-related projects” and focuses on Canadian company Pembina Pipeline’s plan to build a propane export facility near Terminal 6. Propane would be brought to the facility by train and eventually shipped overseas. The propane terminal would use the same property that the Port of Portland had considered for an oil-by-rail transfer operation. That project is also expected to face opposition from environmental groups.

Josh Thomas, a spokesman for the Port of Portland, said the port is “extremely discerning” when thinking about energy-sector opportunities. After rejecting coal and temporarily halting oil, he said, the port is now working with Pembina. “Propane has an excellent track record as a clean and safe alternative fuel,” Thomas said, “with a good climate story, displacing many dirtier traditional fuels.”

‘We are not alone’

If the Port of Portland only temporarily dropped the idea of an oil-train venture, the Port of Olympia in Washington went further.

In August 2014, the Olympia port commission voted 2-1 to approve a resolution expressing “deep concern” about the threat to “life, safety, the environment and economic development” of hauling Bakken crude by train “through our county.”

The resolution urged the Port of Grays Harbor — some 50 miles west of the Port of Olympia — to reconsider allowing three proposed oil-transfer terminals. It also called on the city of Hoquiam to reject construction permits for the projects.

The Olympia port’s resolution didn’t sit well with the executive committee of the Washington Public Ports Association. The committee shot a letter — signed by five port commissioners, including Port of Vancouver Commissioner Jerry Oliver — to Port of Olympia Commissioner George Barner. The letter chastised the resolution as meddling in another port’s lawful business. “We can only presume that if another port were to do this to the Port of Olympia that you would be rightly, and deeply, offended,” according to the letter, signed by Oliver, Port of Seattle Commissioner Tom Albro, Port of Benton Commissioner Roy Keck, Port of Everett Commissioner Troy McClelland and Port of Chelan County Commissioner JC Baldwin.

Barner and his colleague, Port of Olympia Commissioner Sue Gunn, who cast the other “yes” vote for the resolution, returned fire with a letter of their own. “As public officials, we have a responsibility to protect our citizenry and our natural resources,” they wrote in their letter addressed to Albro. “We are not alone in our concern over the passage of crude oil by rail through our community, as no less than sixteen other jurisdictions have passed similar resolutions, including the cities of Anacortes, Aberdeen, Auburn, Bellingham, Chehalis, Edmonds, Hoquiam, Kent, Mukilteo, Seattle, Spokane, Vancouver, and Westport; King and Whatcom Counties, and the Columbia River Gorge Commission.”

The jousting letters illustrate that not all ports think alike when it comes to how they do business.

Although the Port of Portland didn’t join the Port of Vancouver in seeking a share of the vast quantity of crude coming onto the nation’s rails, there appears to be no acrimony between them.

Shortly before the Port of Portland said last March that it wasn’t going after an oil-by-rail project, it gave the Port of Vancouver a heads-up about it.

“We wanted to make sure you had visibility to it prior to its release as the port is effectively making and taking a public position on crude-by-rail,” Sam Ruda, chief commercial officer for the Port of Portland, wrote in an email to Port of Vancouver CEO Todd Coleman and Chief Marketing/Sales Officer Alastair Smith.

Ruda offered to discuss the matter with them.

“I am doing this on behalf of Bill Wyatt (the Port of Portland’s executive director) who is traveling in Vietnam,” Ruda wrote in his Feb. 28, 2014 email. “At the same time, I have been very involved in this matter and am prepared to offer you perspectives and context as to why we are doing this at this time.”

Russell, the spokeswoman for the Port of Vancouver, said Coleman and Smith thanked Ruda for the heads-up when they later spoke with him. “These types of courtesy communications are common,” she said. “There was no additional discussion related to the statement.”