Tag Archives: Turner Mason & Co.

Santa Barbara Pipeline spill could further hamper California crude-by-rail projects

Repost from Reuters

Pipeline spill could further hamper big California oil projects

By Kristen Hays, May 22, 2015 9:53pm EDT

HOUSTON  –  Hundreds of barrels of oil that gushed from a ruptured coastal pipeline in scenic California this week could stiffen opposition to large oil projects that companies want to build in the state, notably those to deliver cheap U.S. crude on trains.

Several proposed oil-by-rail offloading terminals in California were already being contested in light of several fiery crude train derailments since 2013 that have stoked safety concerns about spills and explosions.

Now, the sight of oil washing up on the shores of Santa Barbara could further galvanize rail opponents after up to 2,500 barrels of crude leaked on Tuesday from a pipeline owned by Plains All American Pipeline LP (PAA.N).

“The more oil we’re moving through the state, the greater the risk of these sorts of accidents,” said Paul Cort, an attorney with EarthJustice, which has sued to stop crude deliveries at Plains’ 70,000 barrels per day (bpd) oil-by-rail terminal in Bakersfield.

Past spills have prompted policy changes. A leak of 100,000 barrels of crude off Santa Barbara in 1969 led to bans on new leases for offshore drilling in California.

The latest spill could complicate regulatory approvals.

“It’s certainly not good news for anyone trying to permit any kind of oil-related facilities in California,” said John Auers, a consultant at Turner, Mason & Co in Dallas.

Refiners Valero Energy Corp (VLO.N) and Phillips 66 (PSX.N) want to use railways to transport cheap crude from onshore fields in North America to northern California refineries to displace more pricey foreign imports.

But the projects, which could help mitigate upward pressure on gasoline prices that are among the highest in the United States, have been repeatedly delayed to allow for lengthy environmental reviews.

Some companies have given up.

Nearly two months ago, WesPac Energy-Pittsburg LLC withdrew the 51,000 bpd oil-by-rail component in a broader proposal that has been awaiting permits from the city for more than two years. WesPac now proposes that crude would move into the terminal only via pipeline or vessel if approved. Valero last year scrapped crude-by-rail plans at its Los Angeles-area refinery.

And even some companies with permits face more hurdles.

EarthJustice is suing local permitting agencies over both the Plains’ Bakersfield operation, which the company aims to expand to 140,000 bpd, and a new Alon USA Energy (ALJ.N) rail project nearby slated for next year.

“People trying to build projects that bring North American crude oil to displace imports at California refineries now have another thing they have to deal with,” said David Hackett, a consultant with Stillwater Associates in Irvine, California.

(Additional reporting by Rory Carroll in San Francisco; Editing by Terry Wade and Grant McCool)

    Oil industry study: Don’t worry, be happy…

    Repost from Prairie Business Magazine
    [Editor: First the oil industry wants us to believe that Bakken crude oil is no more volatile than other light sweet crudes.  Then at the end of the report, they recommend “highest-risk” labeling on train cars carrying the stuff.  Go figure….  – RS]

    Oil industry group study says Bakken, other light crude oils similar

    By: Kathleen J. Bryan, August 5, 2014

    BISMARCK – A final report on Bakken crude released Monday by the North Dakota Petroleum Council will be presented to the North Dakota Industrial Commission on Wednesday.

    The study was done in response to two train derailments last year in which railcars carrying Bakken crude ended in violent explosions. One derailment and explosion in Quebec killed 47 people. Another explosion occurred just outside Casselton, N.D.

    The final report confirms preliminary results of the Bakken Crude Characteristics Study, which found that Bakken crude is similar to other North American light, sweet crudes and does not pose a greater risk to transport by rail than other crudes and transportation fuels, the NDPC said in a statement.

    “This study provides the most thorough and comprehensive analysis of crude oil quality from a tight oil production basin to date,” John Auers, executive vice president of Turner, Mason & Co., the engineering firm commissioned to conduct the study, said in a news release.

    In addition to confirming the initial findings presented in May, the final report also detailed best practices for field operations to ensure consistent operation of treating equipment, Bakken crude oil quality and testing procedures and shipping classification.

    In addition to recommended best practices and analysis of the final results from sampling and testing, the final report also compares analysis from other studies on Bakken crude, including a study commissioned by the American Fuel & Petrochemical Manufacturers and the federal Transportation Pipeline and Hazardous Materials Safety Administration.

    “The test results from this study are consistent with scientific data reported by the AFPM and PHMSA,” Petroleum Council Vice President Kari Cutting said. “All of this data does not support the speculation that Bakken crude is more volatile or flammable than other light, sweet crudes.”

    The full report is available at http://www.ndoil.org/image/cache/NDPC_Bakken_Crude_Study_-_Final_Report.pdf.