Tag Archives: U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA)

How many explosions before we stop crude-by-rail?

Repost from Oil Change International

How many explosions before we stop crude-by-rail?

Matt Maiorana, March 13, 2015

This past Saturday, it happened again. A train carrying highly volatile crude oil, in this case tar sands crude from Alberta, derailed in Ontario and caught fire, damaging a bridge in the blaze. This is the fourth time in as many weeks an oil train has derailed and caught fire or exploded.

That’s right, there have been FOUR oil train derailments in North America over the past month. Here’s what that looks like:

rail-blog v1

There’s clear outrage at the local level, but, so far, political action in Washington has been nearly nonexistent. Worse, some recent reports suggest the Obama administration ‘balked’ at dealing with the problem when considering it last year.

Government Inaction

The White House is the responsible party here and it’s time this issue be given the level of attention it deserves by President Obama. It has been 20 months since the tragedy in Lac-Mégantic, but the President seems content pushing paper around while meeting with industry representatives.

As recently as last week dozens of industry representatives met with White House officials downplaying the need for strict safety regulations while an oil train in Illinois was still burning.

As it stands, draft safety standards put forth by the Pipeline and Hazardous Materials Safety Administration (PHMSA), a part of the Department of Transportation, are awaiting final approval by the Obama Administration.

These new rules are a potentially important step, but the recent accidents make it clear even upgraded safety won’t be enough. All four accidents happened with “safer” oil tank cars, not the DOT-111 tankers widely known to be dangerous — and there are no reports any of the trains were going above the speed limit.

President Obama should adopt the strictest possible safety standards, but, at the end of the day, the only safe place for this oil is in the ground — we simply can’t afford to burn it for climate reasons and there’s no good way to transport it.

These Were No Minor Accidents

Let’s take a look at the recent derailments and why this past month demands more of a public response from Washington than it has received thus far:

  1. February 14, Ontario #1:
    • The train was going within the speed limit
    • The train was hauling newer model tank cars (CPC-1232s)
    • The train was carrying tar sands crude
    • The resulting fire destroyed 900 feet of track and burned for 6 days
  2. February 16, West Virginia:
    • The train was going within the speed limit
    • The train was hauling newer model tank cars (CPC-1232s)
    • The train was carrying Bakken oil
    • There were multiple massive explosions
    • The fires burned for days
    • Hundreds of families were evacuated and one person nearly lost his life
  3. March 5, Illinois:
    • The train was going within the speed limit
    • The train was hauling newer model tank cars (CPC-1232s)
    • The train was carrying Bakken oil
    • The fire burned for days
    • Firefighters could only access the derailment site by a bike path
  4. March 7, Ontario #2:
    • The train was going within the speed limit
    • The train was hauling newer model tank cars (CPC-1232s)
    • The train was carrying tar sands crude
    • Canadian National Railway Co. is building a new 1,500ft track of railroad around the burning train wreckage. Seriously.

It is clear from this most recent spate of accidents that neither “safer” tank cars or the current speed limits are limiting the threat crude-by-rail poses to our communities. But that wasn’t the only lesson to be taken from these derailments. The other, just as significant, is that transporting tar sands isn’t necessarily safer than transporting Bakken crude — which we explain in detail in our recent blog post.

Up until now it had been widely believed that tar sands crude wasn’t as explosive or combustible as the oil coming from the Bakken region in North Dakota. The recent accidents have blown this assumption to pieces.

The New Normal?

If the oil industry gets its way, accidents like these will become the new normal. The Department of Transportation itself has found that crude oil trains are likely to derail an average of 10 times a year over the next two decades — and that’s a conservative estimate made with old data. This would cause more than $4 billion in damage and possibly kill HUNDREDS.

This is a government agency saying hundreds of people might die in fiery explosions because of the greed of a few private corporations, yet there has been little action taken to slow or stop the oil industry’s efforts.

Communities Take A Stand

While exploding oil trains are a frightening proposition, none of this should suggest pipelines are any better. Choosing between one or the other, as many oil insiders have suggested is necessary, is like choosing to get hit by a bus or a truck.

What’s needed is an urgent and rapid transition to renewable energy that doesn’t devastate the landscape, trample on indigenous and community rights, or cook the planet. Put simply: we need to keep the oil in the ground.

That’s the message President Obama needs to hear. While he considers the best course of action on the proposed PHMSA rules, it’s important for him to know that communities all over the country are rising up and taking a stand.

In some places they’re already winning, blocking oil terminals and getting in the way of proposed expansions.

Near Seattle, local organizers won a victory over Shell, which wants to build an oil train terminal to supply its Anacortes refinery. Shell’s plans now require a full-blown environmental review. And in California, communities are standing in the way of terminal expansions across the state.  (See  herehere and here.)

Even Governors, like Pennsylvania’s Tom Wolf, are asking the federal government for stronger oil train safety standards.

Our message is simple. If transporting oil can’t be done safely, don’t do it. Keep it in the ground. It’s time for President Obama to take this issue seriously and put in place a moratorium on all crude-by-rail shipments until community and climate safety can be guaranteed.

Derailments like the four over the past month are what an “All of the Above” energy strategy looks like and we’re not going to take it.

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Update: While writing this article, another oil train derailed in Manitoba. Information is still coming out about this latest accident, though it appears to be smaller in scale. Still, that makes FIVE derailments involving trains carrying crude oil or refined oil products in under a month.

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Restoring old oil tank cars – an entrepreneur explains

Repost from The Hutchison News
[Editor: An interesting insider look at the process of restoring aging DOT-111 tank cars.  Also interesting numbers on existing cars and the call for increased numbers of restored cars.  – RS]

Oil boom spurs need to restore rail cars

By John Green, November 1, 2014

oil tank carsWhen introducing a new business venture planned for Hutchinson by his company last week, Adam Mervis of Mervis Industries thanked his father and brother:

“For not throwing me out of the room when I told them we’d spend a heck of a lot of money to do something where it’s never been done – and something that’s never been done.”

The Illinois-based, family-owned scrap metal and recycling company plans to build a $35 million plant on 100 acres in the Kansas Enterprise Industrial Park to refurbish rail cars.

The focus will be tank cars designed to carry crude oil and other combustible liquids. The company projects employing 150 people within three years of opening.

The demand for the business, Mervis and his future Hutchinson plant manager Larry Culligan explained, is propelled by several factors.

Oil boom

First, the expansion of oil exploration and recovery in non-traditional fields in the U.S., thanks primarily to hydraulic fracturing, also called fracking.

U.S. oil production jumped from 5.0 million barrels per day in 2008 to 7.4 million last year, and is expected to average 8.5 million this year and 9.3 million next year, according to the U.S. Energy Information Administration. Current U.S. production is the highest in nearly a quarter-century and more than a million barrels a day higher than it was only a year ago, the EIA reported.

Existing oil pipelines are inadequate to move all that new oil to markets, both in terms of volume and location. While there are about 57,000 miles of crude oil pipeline in the U.S., there are nearly 140,000 miles of railroad.

So, there’s been a massive increase in shipping by rail.

U.S. railroads, which carried just 9,500 carloads of crude in 2009, shipped an estimated 434,000 tanker loads in 2013, roughly equivalent to 300 million barrels of oil. A May study by Congressional Research Service forecast 650,000 carloads of crude oil would to be carried by rail this year.

But the increase in transport by rail has also resulted in a significant increase in accidents involving crude oil shipment.

The most famous was a July 5, 2013, accident in Lac Mégantic, Quebec, where a trainload of oil parked on a shortline track came lose and rolled downgrade into a Canadian community, where it derailed and caught fire, killing 47 people and destroying much of the town’s center.

There have been a half dozen other accidents in the U.S. and several others in Canada over just the last two years, including a December 2013 derailment near Casselton, North Dakota, that spilled of more than 400,000 gallons of crude oil, sparked a huge fire and forced evacuation of nearby residents.

Changing standards

The tank cars that derailed at Lac Mégantic and Casselton were built before October 2011, the year the Association of American Railroads (AAR) mandated new safety enhancements to tankers – known in the industry as DOT-111 cars – which carry oil and ethanol.

The older cars lacked puncture-resistant steel jackets, thermal insulation, and heavy steel shields at each end of the car to keep couplers from punching through in a crash. They also have less secure valves on top and bottom of the cars, which might open or get ripped off in a derailment.

In July, the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) proposed rules that, if finalized by Congress, will require tank owners to retrofit older cars to the AAR standards or remove them from the rails by October 2017. That same month Canadian regulators mandated DOT-111 tank cars built before 2014 be retrofitted or phased out by May 2017.

The industry is seeking an extension of that deadline out to at least seven years, Mervis said.

At present, there are about 92,000 DOT-111 tank cars used to transport combustible liquids of which only 14,000, or about 15 percent, were built after October 2011 and thus compliant with the latest standards.

Officials estimate the cost to retrofit the cars at $20,000 to $40,000 each.

Besides oil, there’s also been a surge in demand for plastic pellet and fertilizer cars, Mervis noted, thanks to low natural gas prices, as well as constant growth in demand for food grade cars, for shipping corn syrup, vegetable oil and molasses.

There are a half dozen tank car builders in the U.S., but recent estimates show there are more than 55,300 cars on backlog just to meet the growing car demand. With builder capacity of some 30,000 cars per year, the backlog will take close to two years to fill.

At Mervis Railcar, they plan to retrofit DOT 111s to meet the proposed requirements, to convert them for other non-hazardous uses, or destroy and recycle them, Mervis said.

Major customers, Mervis said, will include Exxon, Union Oil and ADM, as well as railroads themselves.

Besides cars that will need retrofits, all tank cars – there are about 171,000 DOT-111 cars in the North American fleet – must get a complete, top-to-bottom inspection every 10 years, Mervis said.

There’s a push by regulators, he said, to cut that to five years.

Either way, inspections will also be a big part of their business.

Plant layout

A preliminary layout of the plant includes four major buildings with combined floor space of more than 224,000 square feet and some 6 miles of rail line.

The first step in the process, Mervis said, will be to clean the cars.

“We’re not going to take any that held chlorine or any other thing that will kill you,” Mervis said. “Because we don’t want or need to.”

Once cleaned, the cars will move to the eight-bay inspection shop, where workers will closely check all welds, seams and liners, and conduct other tests as required by the type of car, such as dye penetration tests, and magnetic, ultrasonic or radiographic scans to find cracks or structural deficiencies.

They must also determine the thickness of the tank car shells, heads and protective housings and estimate how long they’ll maintain sufficient thickness to stay in service, whether to install or replace internal linings, Mervis said, “or to cut them up.”

“Every employee will have some certification,” said Culligan, director of railcar operations for the new company. Those include welders, inspectors, even record keepers.

“The only ones that might not are shot blasting the interiors of the cars,” he said, though even they’ll have confined space training.

From inspection, the cars will be moved via a transfer table into a 32-bay mechanical shop, where they can be jacked up and put on stands to modify them, while the wheels are removed and sent elsewhere to be refinished.

They’ll remove all valves on the cars to rebuild and then test, Mervis said.

If converted to a food-grade tanker, they may have a plastic liner sprayed on the inside, and then be heated to set it.

The repaired or retrofitted cars will then go to a paint booth, which includes heaters that bake the entire car at set temperatures and times, depending on whether it’s interior or exterior paint.

Part of the deal for locating the plant here included purchase of the Hutchinson & Northern Railway, a switching and terminal service that connects to the UP and BNSF railways near the Hutchinson Salt mine.

The 3 miles of line include links to Hutchinson Salt, Midwest Iron, Irsik and Doll and the K&O Railroad. The purchase from Hutchinson Salt was necessary, Mervis said, to link to the two national carriers.

Besides the rail line, it included 23 acres of adjoining land, one locomotive engine and locomotive storage building. Mervis plans to rename the line the AD&A Railway, after his children, Alec, Devon and Audra, and name the engine after a nephew.

Federal authorities must still approve the transfer.

Timeline

They’ve started engineering work on the plant design, and groundwork will likely begin in February, but building construction won’t start until spring.

“The buildings will be all prefabricated steel, but what goes inside the buildings will be a little different,” Mervis said. “The person who sells the system (whether cleaning, paint, etc.) will be responsible for installing the equipment and making sure it works. We don’t have time to manage all that as it’s going on.”

A number of national firms lay rail and he expects them, as well as utilities, to use Kansas workers, Mervis said.

“Our goal is to get most of the track laid and the mechanic building open by early summer,” he said.

In the interim, they’ll also work with Hutchinson Community College and the Hutchinson High School to identify and develop training needed. They’ll do non-tank work, such as repairing hopper cars, while they build and certify the staff.

“You can’t just throw someone into welding tank cars,” Mervis said. “There’s a lot of FRA-required training,” including working a minimum 240 hours under “Level 2” supervision.

They expect to add the 150 jobs over three years, though if training, ramp up and demand can make that happen faster, it will, Culligan said.

Of the 150 jobs, 65 to 70 will be welders. Others will do valve testing and rebuilding, others cleaning, painting, sandblasting and even hanging decals on completed cars, Mervis said.

He’s confident the company, which promises “above market wages,” will find enough qualified workers in the region to make the plant work, based on the training available and the work ethic the region and community are renowned for.

“You don’t make this kind of investment to repair hoppers or gondolas,” Mervis said.

“Outside the box”

Mervis is the fourth generation of his family to run the 90-year-old business, which now has metal, plastic and electronics recycling centers in eight cities spread over two states and employs nearly 400 people.

He started there when he was 12, Mervis said, and is now company CEO and president. His dad, in his 80s, still comes to work every day. A brother and sister are also in the business.

“There was way too much capacity for scrap,” Mervis said of the decision to expand into this newest venture. “From ’05 to ’08 everyone decided to add capacity. When demand isn’t growing 6 percent a year, you have to think outside the box.”

They’ve worked with the rail industry for more than a decade, first recycling cars and then reconditioning railroad castings, including couplers, yokes and side frames – “everything beneath the body but the wheels” – so he decided to leverage those relationships, Mervis said.

He came up with the idea more than a year ago, but it was when he hired Culligan in June, Mervis said, he really “felt this dream – almost – come true.”

A graduate of Ohio State in aviation engineering, Culligan worked for McDonnell Douglas for a number of years before joining a rail care building and leasing company. He worked first at American Railcar Industries and then Union Tank Car. He became chief fleet engineer there, running its repair shop in Valdosta, Georgia, then moved to Chicago to oversee eight facilities for Union Tank.

He then moved to TTX Company, a railroad cooperative which owns the nations’ largest fleet of freight cars which it provides to stockholding railroads. That’s where Mervis met him through a mutual friend, and lured him away.

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National Geographic series on Energy: New Oil Train Safety Rules Divide Rail Industry

Repost from The National Geographic

New Oil Train Safety Rules Divide Rail Industry

Many railroad companies want more time to retrofit cars in the U.S. and Canada, but some are forging ahead.
By Joe Eaton for National Geographic, October 31, 2014
Smoke rises from railway cars that were carrying crude oil after derailing in downtown Lac Megantic, Quebec, Canada, Saturday, July 6, 2013.
Smoke rises from railway cars that were carrying crude oil and derailed in downtown Lac-Megantic, Quebec, in 2013. Regulators in Canada and the United States have been working on new standards for trains that carry flammable fuel. – Photograph by Paul Chiasson, Associated Press

Three days after an oil train derailed and exploded in 2013 in Lac-Mégantic, Quebec, killing 47 people, Greg Saxton wandered through the disaster site inspecting tank cars.

For Saxton, the damage was personal. Some of the tank cars were built by Greenbrier, an Oregon-based manufacturer where he’s chief engineer. Almost every car that derailed was punctured, some in multiple places. Crude oil flowed from the gashes, fueling the flames, covering the ground, and running off into nearby waterways.

Each day, as Saxton returned to the disaster zone, he passed a Roman Catholic church. “We never came and went when there wasn’t a funeral going on,” he said.

In the wake of this and other recent accidents as energy production soars in North America, Canadian and U.S. regulators are proposing new safety rules for tank cars that carry oil, ethanol, and other flammable liquids. Saxton and Greenbrier have pushed for swift changes, but others in the industry are asking for more time to retrofit cars like the type that exploded at Lac-Mégantic. (See related stories: “Oil Train Derails in Lynchburg, Virginia” and “North Dakota Oil Train Fire Spotlights Risks of Transporting Crude“)

“If you don’t set an aggressive time line, you won’t see improvements as quickly as the current safety demands require,” Jack Isselmann, a Greenbrier spokesman, said. “We’ve been frankly just perplexed and confused by the resistance.”

Industry Pushes for More Time

The tank cars that derailed at Lac-Mégantic were built before October 2011, when the American Railway Association mandated safety enhancements to the oil and ethanol tankers known in the industry as DOT-111 cars. The cars lacked puncture-resistant steel jackets, thermal insulation, and heavy steel shields, all of which could have lessened the destruction, experts say.

In July, the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA) proposed rules that, if finalized, would require higher safety standards for new oil cars. The rules also require owners to retrofit older cars or remove them from the rails by October 2017.

Canadian regulators in July mandated that DOT-111 tank cars built before 2014 be retrofitted or phased out by May 2017. Transport Canada, which regulates rail safety, has also proposed aggressive safety standards for new tank cars and will seek industry comment this fall before finalizing its rules.

Saxton and others at Greenbrier support the proposed regulations, which could be tremendously lucrative to the company. However, others in the rail supply industry say the proposed retrofit time line cannot be met.

The Railway Supply Institute—a trade organization that represents the rail industry—has asked DOT to allow legacy cars in the oil and ethanol fleet to remain on the rails until 2020.

Thomas Simpson, the institute’s president, said a survey of rail maintenance and repair shops found that only 15,000 of the roughly 50,000 non-jacketed legacy tank cars in the crude oil and ethanol fleet can be modified by the proposed 2017 deadline.

For many cars, the retrofit process would include adding thermal protection systems, thick steel plates at the ends, and outer steel jackets, as well as reconfiguring the bottom outlet valve to ensure it does not break off and release oil during a derailment.

That’s too much work to complete before the deadline, and the regulations have not yet been finalized, Simpson said.

The proposed deadline, he said, will “idle cars waiting for shop capacity and adversely affect the movement of crude and ethanol.”

Tying in the Keystone XL Debate

The American Petroleum Institute, which represents the oil and natural gas industry, also says the 2017 deadline to retrofit tank cars is too aggressive and could slow oil and gas production. (See related story: “Blocked on Keystone XL, Oil-Sands Industry Looks East“)

In comments to U.S. regulators and the press, API tied the safety upgrades to approval of the proposed Keystone XL pipeline, which would transport Alberta’s tar sands oil through the Midwest to Texas refineries.

Workers stand before mangled tanker cars at the crash site of the train derailment and fire in Lac-Megantic, Quebec
The deadly oil train accident at Lac-Megantic, Quebec, raised awareness of the potential dangers of transporting crude by rail. – Photograph by Ryan Remiorz, Associated Press

If Keystone is not built, API president Jack Gerard said in September that the cost of the proposed oil tank rules would nearly double to $45 billion because demand for transporting crude by rail would be higher.  (See related story and map: “Keystone XL: 4 Animals and 3 Habitats in Its Path” and “Interactive Map: Mapping the Flow of Tar Sands Oil“)

Both API and the Rail Supply Institute have also warned regulators that a short time line for retrofitting oil cars could cause a spike in truck shipments of oil and ethanol.

But Anthony Swift, an attorney with the Natural Resources Defense Council, an environmental group opposed to Keystone XL, called these arguments misleading. Swift said Keystone XL would have little impact on retrofitting tank cars, because most train traffic from the Bakken oil fields in North Dakota moves to East Coast and West Coast refineries. He said that traffic would not be affected by the pipeline.

Keystone XL would have the capacity to carry 830,000 barrels of oil-sands crude a day, with up to 100,000 barrels a day set aside for crude from the Bakken. By 2016, the rail industry in Canada is expected to carry about as much oil as Keystone XL would. The U.S. rail industry is already there: Almost 760,000 barrels a day of crude had traveled by rail by August.

Swift said the costs to the oil industry are worthwhile if lives are saved. “The argument that we need to wait until the oil industry does not need tank cars until we can make them safe is ridiculous on its face,” he said.

Greenbrier Gears Up to Meet Demand

In February, Greenbrier introduced a beefed-up tanker with a 9/16-inch steel shell (1/8-inch thicker than many DOT-111 cars), 11-gauge steel jacket, removable bottom valve, and rollover protection for fittings along the top of the cars.

Greenbrier calls the tanker the “car of the future,” saying it’s eight times safer than the DOT-111. Isselmann said Greenbrier has received more than 3,000 orders for the new car and plans to double its manufacturing capacity by the end of the year.

In June, Greenbrier and Kansas rail-service company Watco joined forces to form GBW Railcar Services, creating the largest independent railcar repair-shop network in North America. Isselmann said the company plans to hire 400 workers and start second shifts at its factories to meet demand for retrofitting DOT-111 tank cars.

In comments to U.S. regulators, GBW said it currently has the capacity to retrofit more than 10 percent of the fleet of DOT-111 tank cars.

Isselmann said that number will grow as other companies take advantage of the market once regulators release final rules. For that reason, he said the industry’s current capacity to meet regulations is less important than its ability to ramp up quickly to capture the increased business that new safety standards could bring.

“This notion that the status quo is going to remain—it’s diversionary at best,” Isselmann said.

An oil tanker car at Lac-Megantic, Quebec
Almost every tanker in the Lac-Megantic accident was punctured. New standards would mandate stronger cars, among other measures. – Photograph by Ryan Remiorz, Associated Press

Some in the industry are responding to public concern before rules are finalized. In April, Irving Oil—the owner of Canada’s largest refinery, in Saint John, New Brunswick, where the Lac-Mégantic train was headed before the disaster—completed a voluntary conversion of its crude oil railcar fleet.

Also in April, Global Partners, one of the largest U.S. distributors of gasoline and other fuels, began requiring all crude oil unit trains making deliveries at its East and West Coast terminals to meet October 2011 safety standards for tank car design.

“As an industry, we have both an opportunity and a responsibility to maximize public confidence in the safety of the system that carries these products across the country,” Eric Slifka, Global Partners’ CEO, said in a press release.

A Push to Harmonize Regulations

As the U.S. and Canada consider train safety regulations, oil and rail companies are pushing to ensure that the same tank cars can be used to haul flammable liquids in both countries.

Regulators say they are working together to make that happen. Lauren Armstrong, a spokeswoman at Transport Canada, said the department is holding technical discussions on new tank car standards with the U.S. Department of Transportation and the Federal Railroad Administration.

However, coordinating tank car regulations between the two countries would have to overcome current gaps, industry representatives say.

In April, Transport Canada banned the use of the oldest and least crash-resistant DOT-111 tank cars, which lacked bottom reinforcement.  The U.S. so far has not banned the cars from carrying oil and ethanol.

Canada also set a 2017 deadline for retrofitting the cars. In the U.S., regulators are expected to release final rules by early 2015. The process, however, could continue much longer.

The strongest standards will carry the day, said Thomas Simpson, the president of the Railway Supply Institute. Given the large amount of oil that moves between the two countries, Simpson said it makes no business sense for companies to keep two different sets of cars to meet the two sets of rules.

Communities Concerned About Safety

But as final rules are being hammered out in the U.S., some train safety advocates and community groups worry they are being left out of the process.

Karen Darch, co-chair of TRAC, a coalition of Illinois communities concerned about train congestion and rail safety, said she is hopeful that final rules will include a fast deadline to retrofit old cars. (See related story: “Illinois Village Leads Charge for Tougher Train Rules“)

But she said rail and oil industry lobbyists have had much more access to policymakers than community advocates, and she’s concerned they will have a greater impact on final rules.

“The inside players, the guys in the industry,” she said, “they seem to be able to be in front of the decision-makers more than we have been.”

The story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.

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