Tag Archives: U.S. Secretary of Transportation Anthony Foxx

Big debate in North Dakota: stabilize the oil before shipping?

Repost from Prairie Business

 Does ND crude need to be stabilized?

By April Baumgarten, Forum News Service, August 25, 2014 
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A train carrying crude oil tankers travels on the railroad bridge over the Missouri River on Aug. 16 in Bismarck. Dustin Monke/Forum News Service

DICKINSON, N.D. – What can be done to keep trains from becoming “Bakken bombs?”

It’s a question on the minds of many North Dakota residents and leaders, so much that some are calling on the state Industrial Commission to require oil companies to use technology to reduce the crude’s volatility. The words are less than kind.

“Every public official in America who doesn’t want their citizens incinerated will be invited to Bismarck to chew on the commissioners of the NDIC for failing to regulate the industry they regulate,” Ron Schalow of Fargo wrote in a Facebook message.

A train carrying Bakken crude derailed and exploded July 6, 2013, in Lac-Megantic, Quebec, killing 47 people. Another oil train crashed into a derailed soybean train on Dec. 30 near Casselton, N.D. No one was killed.

Schalow has started a campaign to require oil companies that drill in North Dakota to use stabilizers, a technology used in Texas to take natural gas liquids off crude to make it safer to ship. His online petition demands the Industrial Commission to force oil companies to remove all explosive natural gas liquids from crude before shipping it by rail. More than 340 people have signed the petition as of Saturday.

Schalow declined an interview, referring instead to his petition and Facebook page titled “The Bomb Train Buck Stops With North Dakota.”

Throughout North Dakota, residents have called on the state’s government to prevent future disasters like these, but some leaders say implementing stabilizers could cause more problems.

“Now you have to pipe from every one of these wells or you have to find a way to get it to this centralized location to be refined,” state Agricultural Commissioner Doug Goehring said. “That creates huge problems in itself.”

There is a difference between conditioning and stabilization, said Lynn Helms, the state’s Department of Mineral Resources director.

Oil conditioning is typically done at well sites in North Dakota, he said. The gases are first removed from crude. Then the water and hydrocarbons are removed with a heater treater. The crude oil is then put into a storage tank below atmospheric pressure, which reduces the volatility. Those gases can then be flared or transported to a gas processing plant.

“If crude oil is properly conditioned at the wellsite, it is stable and safe for transportation,” Helms said.

Oil that hasn’t been properly conditioned at the wellsite can be stabilized, Helms said, but that would include an industrial system of pipelines and processing plants.

Valerus, a company based in Houston, manufactures stabilizers for oil companies across the country, including in Texas, West Virginia and Canada. It’s a technology Texas has used at the wellhead for drilling the Eagle Ford shale since the early 2000s, said Bill Bowers, vice president of production equipment at Valerus. Recently, a centralized system with pipelines has been developed to transport the natural gas liquid safely.

“Most of that stabilization takes place at a centralized facility now,” he said. “There could be 100 wells flowing into one facility.”

The Railroad Commission of Texas has one rule that Helms has found regarding stabilization, he said. Rule 3.36 of the Texas Oil and Gas Division states operators shall provide safeguards to protect the general public from the harmful effects of hydrogen sulfide. This can include stabilizing liquid hydrocarbons

.Helms added he could not find any other rule requiring companies to use stabilizers, but the rule had an impact indirectly, Bowers said.

“I think what was happening is these trucking companies, either for regulation or just safety purposes, would not transport the crude if it was not stabilized,” Bowers said.

The process is relatively simple, he added.

“All we are really talking about is heating the crude, getting some of the more volatile compounds to evaporate and leaving the crude less volatile,” Bowers said.

The Industrial Commission has asked for public input on 10 items that could be used to condition oil. Though stabilization is not directly listed, it could be discussed under “other field operation methods to effectively reduce the light hydrocarbons in crude.”

The commission will hear testimony on Tuesday, Sept. 23, at the Department of Mineral Resources’ office in Bismarck. Written comment may be submitted before 5 p.m. Monday, Sept. 22.

New rules in North Dakota would regulate conditioning at well sites.

The hearing was brought on by a study from the North Dakota Petroleum Council and discussions held with U.S. Secretary of Transportation Anthony Foxx and Secretary of Energy Ernest Moniz regarding transportation issues.

Installing equipment at the wellhead for conditioning oil takes several weeks, Helms said. Stabilization, on the other hand, could take more than a year to install equipment – if not longer.

Helms said he couldn’t comment on the economic process.

“I do know that a large-scale industrial process would have a big imprint,” Helms said. “It would really exasperate our transportation problems because tens of thousands of barrels of oil would have to be trucked or piped to (a processing plant) and from it.”

Since there is a centralized system in Texas, companies can make a profit off the natural gas liquids. In North Dakota, companies would have to stabilize at the wellhead before pipelines are put in place.

“Given their preference, they won’t buy this equipment,” Bowers said. “They really don’t want to do it.”

There is no pipeline infrastructure to transport natural gas liquids from wellsites, meaning it would have to be trucked or shipped by rail. That could be more dangerous than shipping oil without stabilizing it, Goehring and Helms said.

“By themselves, they are more volatile and more dangerous than the crude oil with them in it,” Helms said. “The logical thing to do is to properly condition them at the wellsite.”

The crude could also shrink in volume, along with profits, Bowers said.

“It seems to me that in the Bakken people are quite happy with the arrangement,” he added. “They don’t believe necessarily that stabilization will change the safety picture.”

Schalow has criticized the Industrial Commission for not acting sooner, stating officials have had 10 years to address the issue.

Goehring said he was made aware of the process recently.

“I don’t believe anybody is withholding information or is aware of anything, nothing diabolical,” Goehring said.

Officials agreed that the process needs to be dealt with on multiple levels, including oversight on railroad safety. Public Service Commissioner Julie Fedorchak outlined a proposal on Thursday for a state-run rail safety program. If approved, the Public Service Commission would hire three staff members for the program.

The commission has been working on the proposal since before the Casselton derailment.

“I share (Schalow’s) concern about having a safe method of transportation, and I think everyone does,” Fedorchak said. “How we get there is the challenge and I think there is a number of different steps. I don’t think there is one solution.”

Many trains carrying Bakken crude travel through Fargo, where Schalow and Democratic Sen. Tim Mathern live.

Mathern follows Schalow’s Facebook page and said he did so out of his concern for transporting oil safely.

“My perspective is that we must preserve and protect our quality of life today and in the future,” Mathern said. “We must be careful that we don’t do kind of a wholesale of colonization of our resources in sending them out. … It’s almost like how do we make sure that we don’t have an industrial waste site as a state?

“In many of our larger cities, we have a section of town that is kind of an industrial waste site. Eventually, someone has to clean that up. Eventually, that is a cost to society, and I am concerned that we don’t let that happen to North Dakota.”

Mathern said safely transporting oil is no longer a western North Dakota or even a state issue; it’s a national issue that must be taken seriously because the oil is being transported throughout the country.

“There is enough responsibility to go around for everybody, including policy makers,” he said. “It’s not just one industry; it’s many industries. It includes the public sector. It includes governors and legislators, and people that are supposed to be attentive to citizens, and to be attentive to the future. We all have responsibility in this.

“This has worldwide consequences. This is an oil find that even affects the balance of power, even politically.”

Mathern said he doesn’t know what Schalow’s motivation is, but it isn’t just Schalow raising the questions.

“I don’t think this is a matter of blaming oil.” Mathern said. “This is a matter of being respectful for our citizens and being a good steward of this resource and a good steward of our future.”

Public comment

Residents unable to attend the North Dakota Industrial Commission on oil conditioning practices set for 9 a.m. on Tuesday, Sept. 23, in Bismarck may submit written comments to brkadrmas@nd.gov. Comments must be submitted by 5 p.m. CDT on Monday, Sept. 22.
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    DOT proposes stricter oil train safety rules

    Repost from Politico

    DOT proposes stricter oil train safety rules

    By Kathryn A. Wolfe  | 7/23/14
    Anthony Foxx is pictured. | M.Scott Mahaskey/POLITICO
    Anthony Foxx’s announcement follows a year-long spree of oil train crashes. | M.Scott Mahaskey/POLITICO

    The Obama administration on Wednesday announced its long-awaited proposal to improve the safety of oil trains, a step meant to address a series of fiery derailments that have raised fears about the dark side of the North American energy boom.

    The proposed rules include mandates for phasing out older, less-sturdy rail tank cars during the next two to five years, tightened speed limits, improved brakes and steps to address concerns that crude oil produced in North Dakota’s Bakken region is unusually volatile or flammable. The rules also include provisions that would affect the shipment of ethanol, another flammable liquid frequently transported by rail.

    “We need a new world order on how this stuff moves,” Transportation Secretary Anthony Foxx told reporters in making the announcement.

    “More crude oil is being shipped by rail than ever before,” Foxx said. “If America is going to be a world leader in producing energy, our job at this department is to ensure that we’re also a world leader in safely transporting it.”

    The details of the White House-vetted proposal had been the subject of fierce lobbying by the oil industry, which maintains that Bakken crude doesn’t pose unusual dangers, and the railroads, which have long called for tougher tank-car standards but objected to calls for reduced speed limits. The rules would offer both industries incentives to go along — for instance, oil trains meeting the toughened standards for crashworthiness and brakes could travel as fast as 50 mph in all areas, while those that don’t could be limited to 30 mph or 40 mph.

    “The fact that the proposed rule incorporates several of the voluntary operating practices we have already implemented demonstrates the railroad industry’s ongoing commitment to rail safety,” Ed Hamberger, CEO of the Association of American Railroads, said in a statement Wednesday. “We look forward to providing data-driven analyses of the impacts various provisions of the proposal will have on both freight customers and passenger railroads that ship millions of tons of goods and serve millions of commuters and travelers across the nationwide rail network every day.”

    The American Petroleum Institute initially said it would review the proposal, but it later blasted out a statement rejecting “speculation by the Department of Transportation” about the safety of transporting Bakken crude.

    “Multiple studies have shown that Bakken crude is similar to other crudes,” CEO Jack Gerard said. “DOT needs to get this right and make sure that its regulations are grounded in facts and sound science, not speculation.”

    The DOT proposal drew initial praise from lawmakers, along with some calls to go further.

    Wednesday’s rollout followed months of interim rules and voluntary agreements with the railroad and oil industries. It also came after a year-long spree of oil train crashes in communities from Quebec and North Dakota to western Pennsylvania, rural Alabama and Lynchburg, Virginia — including one that killed 47 people in the Canadian town of Lac-Mégantic last July.

    Even without any fatalities so far in the U.S., oil train accidents in 2014 have already shattered records for property damage, based on POLITICO’s review of data from the federal Pipeline and Hazardous Materials Safety Administration. As of late May — a month after the Lynchburg derailment — the damage toll exceeded $10 million through mid-May, nearly triple the damage for all of 2013. The number of incidents at that point in the year — 70 — was also on pace to set a record.

    Oil trains have also inspired local opposition in communities from Albany, New York, to Washington state and the San Francisco Bay area, where residents expressed alarm at finding that they had become key way stations in a network of virtual pipelines that carry oil from production hot spots like North Dakota and western Canada.

    Sen. Chuck Schumer (D-N.Y.) urged DOT to see that the rules are “finalized, implemented and enforced as soon as possible.”

    “These desperately needed safety regulations will phase out the aged and explosion-prone … tanker cars that are hauling endless streams of highly flammable crude oil through communities across the country and New York,” Schumer said in a statement Wednesday.

    Sen. John Hoeven (R-N.D.) said the proposal “appears to be comprehensive,” adding that “we will continue to review these proposed standards to ensure they are workable and will keep our communities safe.”

    But Sen. Patty Murray (D-Wash.) who chairs the Appropriations subcommittee overseeing DOT, said in a statement that “there is still more work to be done, by both regulators and industry.”

    “I’m pleased that the proposed regulations address issues I outlined in the 2015 transportation spending bill, like enhanced rail tank car standards and improved classification of flammable liquids, that are much-needed steps to improve the safety of our rail system,” Murray said.

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      Crude oil train protests planned in Sacramento and Davis

      Repost from The Sacramento Bee
      [Editor:  Check this out – Benicia’s uprail friends are getting out on the tracks, and they are getting the media’s attention.  Thanks to everyone who is following this story.  Benicia is in the “crosshairs” of a nationwide – worldwide – focus on this dangerous and dirty money grab by the oil and rail industries.  More and more, thoughtful people are saying, “No, not here.”  – RS]

      Crude oil train protests planned in Sacramento, Davis

      By Tony Bizjak, Jul. 8, 2014
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      Jake Miille / Special to The Bee | A crude oil train operated by BNSF snakes its way west through James, Calif., just outside the Feather River Canyon in the foothills into the Sacramento Valley.

      Laurie Litman, who lives a block from the rail tracks in midtown Sacramento, says oil and rail companies are about to put her neighborhood and plenty of others in danger, and she wants to stop it.

      Litman is among a group of environmental activists in Sacramento and Davis who will gather this week at the Federal Railroad Administration office in Sacramento and at the Davis train station to protest plans by oil companies to run hundreds of rail cars carrying crude through local downtowns every day. The protests, on the anniversary of an oil train crash and explosion that killed 47 people in the Canadian city of Lac-Megantic, will spotlight a plan by Valero Refining Co. of Benicia to launch twice-daily crude oil train shipments through downtown Roseville, Sacramento and Davis early next year.

      “Our goal is to stop the oil trains,” said Litman of 350 Sacramento, a new local environmental group. “We are talking about 900-foot fireballs. There is nothing a first responder (fire agency) can do with a 900-foot fireball.”

      Sacramento Assemblyman Roger Dickinson, an advocate for increased crude oil rail safety, will speak at noon Wednesday during the Sacramento event at 8th and I streets. The Yolano Climate Action group will distribute leaflets at the Davis train station Tuesday and Wednesday evening about the Valero proposal. The Davis City Council recently passed a resolution saying it opposes running the trains on the existing downtown Davis rail line.

      The protests are among the first in the Sacramento area in response to a recent surge in crude oil rail transports nationally, prompted mainly by new oil drilling of cheaper oils in North Dakota, Montana and Canada. In California, where rail shipments have begun to replace marine deliveries from Alaskan oil fields and overseas sources, state safety leaders recently issued a report saying California is not yet prepared to deal with the risks from increased rail shipments of crude.

      Oil and railroad industry officials point out that 99.9 percent of crude oil shipments nationally arrive at their destinations without incident, and that the industry is reducing train speeds through cities, helping train local fire and hazardous material spill crews, and working with the federal government on plans for a new generation of safer rail tanker cars. Valero officials as well say their crude oil trains can move safely through Sacramento, and a recent report sponsored by the city of Benicia concluded that an oil spill along the rail line to Benicia is highly unlikely.

      In a letter last week, however, four Northern California members of Congress called on the federal government to require oil and rail companies take more steps to make rail crude shipments safer. The letter was signed by Doris Matsui, D-Sacramento, George Miller, D-Martinez, Mike Thompson, D-St. Helena, and John Garamendi, D-Walnut Grove.

      “We are especially concerned with the high risks involved with transporting .. more flammable crude in densely populated areas,” the group wrote to U.S. Department of Transportation Secretary Anthony Foxx. “Should spills or explosions occur, as we have seen over the last year, the consequences could be disastrous.”

      The four lawmakers said oil companies should be required to remove more volatile gases from Bakken crude oil before it is shipped nationally from North Dakota. The federal government issued a warning earlier this year about Bakken crude after several Bakken trains exploded during derailments. The California Congress members also encouraged federal representatives to move quickly to require railroads to install advanced train control and braking systems. Industry officials have said those systems, called Positive Train Control, are expensive and will take extended time to put into place.

      Representatives from a handful of Sacramento area cities and counties are scheduled to meet this week to review Valero’s crude oil train plans, and to issue a formal response to the environmental document published two weeks ago by Benicia that concluded derailments and spills are highly unlikely. City of Davis official Mike Webb said one spill and explosion could be catastrophic, and that as more oil companies follow Valero’s lead by bringing crude oil trains of their own through Sacramento, the chances of crashes increase.

      The Sacramento group has indicated it wants a detailed advanced notification system about what shipments are coming to town. Those notifications will help fire agencies who must respond if a leak or fire occurs. Local officials say they also will ask Union Pacific to keep crude-oil tank cars moving through town without stopping and parking them here. The region’s leaders also want financial support to train firefighters and other emergency responders on how to deal with crude oil spills, and possibly funds to buy more advanced firefighting equipment. Sacramento leaders say they will press the railroad to employ the best inspection protocols on the rail line.

      Read more here: http://www.sacbee.com/2014/07/08/6541363/crude-oil-train-protests-planned.html#storylink=cp

       

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        BNSF Railway: Future of crude by rail depends on safety

        Repost from The Kansas City Star
        [Editor: Significant quote by BNSF Executive Chairman Matt Rose: “Without focus on the elements of safety, the social license to haul crude by rail will disappear, to say nothing of the regulatory agencies’ response.”  – RS]

        BNSF: Future of crude by rail depends on safety

        James MacPherson, The Associated Press | 2014-05-21

        — The future of crude oil shipments by train depends on proving to the public that it can be done safely, the head of BNSF Railway Co. said Wednesday.

        “Without focus on the elements of safety, the social license to haul crude by rail will disappear, to say nothing of the regulatory agencies’ response,” BNSF Executive Chairman Matt Rose told several hundred people at the Williston Basin Petroleum Conference in Bismarck.

        BNSF is based in Fort Worth, Texas, but is part of Warren Buffett’s Berkshire Hathaway Inc., based in Omaha, Nebraska. The railroad is the biggest player in the rich oil fields of Montana and North Dakota, hauling about 75 percent of the more than 1 million barrels that moves out of the region daily.

        Rose told the conference that the railroad is committed to preventing accidents like its Dec. 30 crash outside Casselton that left an ominous cloud over the town and led some residents to evacuate. The disaster in the small town west of Fargo was one of at least eight major accidents during the last year, including an explosion of Bakken crude in Lac-Megantic, Quebec that killed 47 people. Other trains carrying Bakken crude have since derailed and caught fire in Alabama, New Brunswick and Virginia.

        Rose last month joined U.S. Secretary of Transportation Anthony Foxx at the North Dakota crash site, where options for enhancing tank car standards were discussed.

        The crash occurred when a train carrying soybeans derailed in front of a BNSF oil train, causing that train to also derail and set off fiery explosions. The crash spilled about 400,000 gallons of crude oil, which took nearly three months to clean up.

        Rose said the railroad has learned from the disaster and has done such things as decreased train speeds in some areas and increased inspections. The railroad also announced in February that it would voluntarily purchase a fleet a of 5,000 strengthened tank cars to improve safety for hazardous materials shipments. The company said it hoped to accelerate the transition to a new generation of safer tank cars and give manufacturers a head start in designing them as federal officials consider changes to the current standards.

        Not everyone in the oil sector is eager to transition to stronger tank cars. At the expo a day earlier, Kari Cutting, vice president of the North Dakota Petroleum Council, said it was “not proven that extra steel is going to prevent those breaches.”

        Cutting also said the newer, stronger DOT-111 tank cars have 14 percent less capacity than older tank cars. Cutting said making those cars the standard will require hundreds more trains to make up the lost volume, actually increasing the risk of accidents.

        Oil from North Dakota began being shipped by trains in 2008 when the state reached capacity for pipeline shipments. The state is now the nation’s No. 2 oil producer, behind Texas.

        BNSF said it plans to invest $5 billion in its railroad this year, including $900 million to expand capacity where crude oil shipments are surging. Its 2014 spending plan is about $1 billion more than last year, a record, Rose said.

        Much of the upgrades will be aimed at safety, he said.

        “BNSF believes, at the end of the day, that every rail accident is preventable,” Rose said.

        Read more here: http://www.kansascity.com/2014/05/21/5037936/bnsf-future-of-crude-by-rail-depends.html#storylink=cpy
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