Tag Archives: Valero Energy Corporation

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, Environmental review, Massive increase in crude-by-rail, Public permitting

Environmentalists play ‘Whac-A-Mole’ to stall crude-by-rail projects

Repost from Environment & Energy Publishing (EEnews.net)

Environmentalists play ‘Whac-A-Mole’ to stall crude-by-rail projects

By Ellen M. Gilmer and Blake Sobczak, March 20, 2015
(Second of two stories. Read the first one here.) [Subscription required]

When an oil company’s expansion plans for Pacific Northwest crude by rail suffered a major setback last month, environmentalists spread the news just as quickly as they could Google “Skagit County Hearing Examiner.”

The little-known local office about an hour north of Seattle holds the keys to land use in the area, and environmental attorneys saw it as the best shot to stall a rail extension considered critical for the delivery of crude oil to a nearby Shell Oil Co. refinery, but potentially disastrous for nearby estuaries and communities.

The effort was successful: After environmental groups appealed a county-level permit for the rail project, Skagit County Hearing Examiner Wick Dufford sent the proposal back to the drawing board, ordering local officials to conduct an in-depth environmental impact statement to consider the broad effects of increased crude-by-rail throughout the county.

“The environmental review done in this case assumes that the whole big ball of federal, state and local regulations will somehow make the trains safe. And that if an accident happens, the response efforts described on paper will result in effective clean up, so that no significant adverse effects are experienced,” Dufford wrote. “There is no proven basis for such conclusions.”

The decision was an incremental but significant victory for environmental groups, sending a signal to industry that its increasing reliance on railed-in crude could face formidable hurdles.

Skagit County is just one piece of a larger plan to expand crude-by-rail across the country to better connect refineries and ports with prolific oil plays like North Dakota’s Bakken Shale. The use of rail to deliver crude oil has skyrocketed in recent years, rising from 9,500 tank cars of crude in 2008 to nearly 500,000 carloads in 2014, according to industry data. Projects in Washington and other refinery hubs aim to expand facilities and extend rail spurs to handle even more crude deliveries.

Shell spokesman Curtis Smith said the company is “confident that we can satisfy any remaining issues associated with the project” to add rail capacity to its Puget Sound Refinery in Skagit County.

“This project is critical to the refinery, the hundreds of employees and contractors who depend on Shell, and the regional economy,” he said. “We do not feel it should be held to a different standard than the crude-by-rail projects of the neighboring refineries that have been approved.”

Smith added that “we all share the top priority of safety.”

But the new reality of crude-by-rail traffic has environmentalists on edge. Oil train derailments in Illinois, West Virginia, North Dakota and other places have led to fires, spills and, in one case, lost lives. A 2013 crude-by-rail explosion in Lac-Mégantic, Quebec, killed 47 people, prompting regulators in the United States and Canada to review the inherently piecemeal rules governing crude-by-rail transportation.

The federal government has authority over certain details, such as standards for tank cars used to haul crude. But most expansion plans and related environmental concerns are left to local agencies situated along oil routes. The result is a hodgepodge of permitting decisions by local authorities following varying state laws, while a team of environmental lawyers challenges expansion projects one by one.

“It’s a little bit like Whac-A-Mole because there isn’t a big permitting scheme,” said Earthjustice attorney Kristen Boyles, who represented six environmental groups in the Skagit County appeal. “It makes it difficult and makes it frustrating for the public.”

State laws in play

So far, the Whac-A-Mole approach is working well for environmentalists.

After three oil refineries in Washington went unopposed in building facilities to receive rail shipments of crude oil, Boyles said environmentalists and community advocates began tracking local land-use agencies more closely.

Earthjustice and the Quinault Indian Nation successfully challenged two proposed crude projects in Grays Harbor County, southwest of Seattle, leading a review board to vacate permits and require additional environmental and public health studies. A third Grays Harbor project is also preparing a comprehensive environmental review.

The next project on environmentalists’ radar is in Vancouver, Wash., just across the Columbia River from Portland, Ore., where Savage Cos. and Tesoro Refining and Marketing Co. have proposed building a new terminal to transfer railed-in crude oil to marine tankers bound for West Coast refineries. The Sierra Club, ForestEthics and several other groups earlier this month moved to intervene in the state agency review process for the project, citing major threats to the Columbia River and public health.

The key to all of these challenges is Washington’s State Environmental Policy Act (SEPA). Similar to the National Environmental Policy Act, SEPA requires government agencies to conduct a broad environmental impact statement for any major actions that may significantly affect the environment.

For projects in Skagit County, Grays Harbor and now Vancouver, state and local officials considering challenges look to SEPA to determine how rigorous environmental review must be, based on whether projects are expected to have major impacts. To Dufford, the Skagit examiner, the answer is plain.

“Unquestionably, the potential magnitude and duration of environmental and human harm from oil train operations in Northwest Washington could be very great,” he wrote.

Down the coast in California, environmentalists have an even stronger tool: the California Environmental Quality Act. Considered the gold standard in state-level environmental protection laws, CEQA has already proved useful in halting a crude-by-rail expansion project in Sacramento.

In Kern County, a team of environmental attorneys is also relying on CEQA to appeal construction permits for the Bakersfield Crude Terminal, a project that would ultimately receive 200 tank cars of crude oil per day. The local air quality board labeled the construction permits as “ministerial,” bypassing CEQA review, which is required only for projects considered discretionary. A hearing is set for next month in Kern County Superior Court.

Earthjustice attorney Elizabeth Forsyth, who is representing environmental groups in the Bakersfield case, said the state environmental law has been powerful in slowing down the rapid rise of crude-by-rail operations.

“In California, we have CEQA, which is a strong tool,” she said. “You can’t hide from the law. You can’t site your project out in some town that you think won’t oppose you.”

Unified strategy?

Still, the one-at-a-time approach to opposing crude-by-rail growth is undoubtedly slow-going, and progress comes bit by bit.

Boyles noted that Earthjustice attorneys from Washington to New York frequently strategize to “unify” the issues and make broader advances. On tank cars, for example, environmental groups have come together to press the Department of Transportation to bolster safety rules.

“That at least is some place where you could get improvements that could affect every one of these proposals,” she said.

But for expansion projects, the effort must still be localized.

“You have this giant sudden growth of these sort of projects, and that’s the best we can do at this point to review each of them and comment,” said Forsyth, the California lawyer, who said the end goal is to empower local agencies to control whether proposals move forward and to mitigate the impacts when they do.

Though labor-intense, advocates say the approach has paid dividends. Projects that would have otherwise flown under the radar are now under rigorous review, and industry players no longer have the option of expanding facilities quietly and without public comment.

“If you hadn’t had these citizens challenging these projects,” Boyles said, “they’d be built already; they’d be operating already.”

The delays have set back refiners seeking to use rail to tap price-advantaged domestic crude — particularly in California.

“The West Coast is a very challenging environment,” noted Lane Riggs, executive vice president of refining operations at Valero Energy Corp., which has faced staunch environmentalist opposition at a proposed oil-by-rail terminal in Benicia.

Riggs said in a January conference call that “we’re still pretty optimistic we’ll get the permit” for the 70,000-barrels-per-day unloading terminal at its refinery there, although he added that “timing at this point is a little bit difficult.”

Facing pressure from concerned locals and the Natural Resources Defense Council, Benicia officials last month opted to require updates to the rail project’s draft environmental impact review, further delaying a project that was originally scheduled to come online in 2013.

A Phillips 66 crude-by-rail proposal in San Luis Obispo County, Calif., has encountered similar pushback. If approved, the project would add five 80-car oil trains per week to the region’s track network. The potential for more crude-by-rail shipments has drawn opposition from several local city councils and regional politicians, despite Phillips 66’s pledge to use only newer-model tank cars (EnergyWire, Jan. 27).

Some town leaders have also separately taken action against railroads bringing oil traffic through their neighborhoods, although federally pre-emptive laws leave cities vulnerable to legal challenges (EnergyWire, March 19).

‘Business as usual’

Local, often environmentalist-driven opposition is seen as “business as usual” within the refining industry, according to Charles Drevna, president of the American Fuel and Petrochemical Manufacturers.

“This is just another extension of the environmental playbook to try to obfuscate and delay,” said Drevna, whose trade group represents the largest U.S. refiners. “We’ve been dealing with that for years, and we’re going to continue to be dealing with it.”

While Drevna said he doesn’t see lawsuits “holding up any of the plans” for refiners to improve access to North American oil production, environmentalists chalk up each slowdown to a victory.

In New York, a plan to expand a key crude-by-rail conduit to East Coast refiners has been held in limbo for over a year at the Port of Albany, owing to an environmentalist lawsuit and closer public scrutiny.

The proposal by fuel logistics firm Global Partners LP would have added a boiler room to an existing facility to process heavier crude from Canada. But advocacy groups including Riverkeeper have challenged the company’s operating air permit, calling for more review by New York’s Department of Environmental Conservation (EnergyWire, Jan. 13, 2014).

“All of the actions we’ve taken with Earthjustice and others have really ground to a halt DEC’s repeated approvals of these minor modifications,” said Kate Hudson, watershed program director for Riverkeeper. “We have not seen tar sands. … The river has been spared that threat for a year-plus, at this point.

“We certainly have no regrets,” she said.

Crude By Rail, Derailment, Explosion, Fire, Petroleum distillates, Synthetic crude, Tar sands crude, Valero Energy Corporation

Trains in Canada derailments carried synthetic crude for Valero

Repost from Reuters

Trains in Canada derailments carried synthetic crude for Valero

TORONTO, Mar 10, 2015 12:56pm EDT

(Reuters) – The two oil trains that derailed and burst into flames in recent weeks in northern Ontario were both carrying synthetic crude to Valero Energy Corp’s refinery near Quebec City, the U.S.-based company said on Tuesday.

Saturday’s CN Rail derailment came less than a month after another CN train carrying oil went off the tracks and ignited in northern Ontario. The railway had said both were carrying crude from Alberta, but declined to give their exact destination.

“We take safety very seriously, so we’re concerned anytime there’s an incident,” said Valero spokesman Bill Day. “Despite the number of rail incidents recently, it is very rare for cargo not to be delivered to its destination safely.”

Day said all of the rail companies Valero works with, including CN Rail, have good safety records.

Synthetic crude is produced from Alberta’s oil sands in upgrader plants, and usually commands a premium to conventional crudes because it is lighter and easier to refine into valuable byproducts such as gasoline.

Valero’s Jean Gaulin refinery is in Levis, across the St. Lawrence River from Quebec City.

In May 2013, the company said it would build a rail off-loading facility at the Jean Gaulin refinery so it could start using Western Canadian crude rather than relying on pricier imports. The company told Reuters it would take light, sweet Western Canadian crude rather than heavier oil sands crude.

Shipments of North American crude to the refinery ramped up early last year. On a July earnings call, the company said North American grades made up 83 percent of the refinery’s feedstock in the second quarter of 2014, up from 45 percent in the first quarter and 8 percent higher than a year earlier.

Separately on Tuesday, CN spokesman Jim Feeny said the train that derailed in February had been carrying petroleum distillates in addition to synthetic crude.

“The contents of the tank cars are a subject of interest and the TSB will be testing the contents to determine what they were,” said John Cottreau, spokesman for Canada’s Transportation Safety Board, which is investigating the incidents.

In a note to shippers on Tuesday, CN said a temporary bypass track would likely be completed by late afternoon, reopening its main line in northern Ontario.

(Reporting by Allison Martell in Toronto, and Scott Haggett and Nia Williams in Calgary; Editing by Alan Crosby)
Bakken Crude, Benicia City Council, Benicia Planning Commission, CPC-1232, Crude By Rail, Derailment, Explosion, Federal Regulation (U.S.), Oil stabilization, Positive Train Control, Tank car design, Train braking systems, Valero Benicia Refinery, Valero Crude By Rail, Valero Energy Corporation

BENICIA HERALD LETTER TO THE EDITOR: Dr. James Egan: Deny Valero’s application

From The Benicia Herald (Benicia Herald letters appear only in the print edition)
[Editor:  Dr. Egan’s letter is a welcome contribution, expressing the growing conviction of many throughout North America, that crude-by-rail is simply unsafe under current conditions, and should be not be permitted at this time.  See also Dr. Egan’s 9/14/14 comments addressing the Valero Crude By Rail Draft EIR.  – RS]

Timely decision on crude by rail warranted: Deny Valero’s application

By James Egan, M.D., Benicia, March 10, 2015

The headline in the Feb. 5, 2015 edition of The Herald, “Another delay as crude-by-rail project debate enters 3rd year,” signals sympathy toward the Valero Benicia Refinery as regards its Crude by Rail (CBR) Use Permit Application, currently before the Planning Commission.  While it is difficult working up crocodile tears for a multi-billion-dollar international oil corporation, the energy and expense invested in forwarding this project bear acknowledgement, and a timely decision on the application should be made out of fairness to the applicant.  To that end, I would like to suggest that the Planning Commission and the City Council have enough information available to take action at any time.  The application should be denied on the basis of rail safety.

On Feb. 17 of this year a crude oil train derailed and exploded in Mount Carbon, W.Va.  Three million gallons of Bakken crude spilled from 26 ruptured tank cars, forcing the evacuation of two nearby towns.  Two days prior, another oil train derailed and caught fire in Ontario, Canada.  Last Thursday, March 5, 21 cars carrying Bakken crude derailed, split and exploded near Galena, Ill.  Another of the dozens of oil- or ethanol-train accidents involving a fire, derailment or significant fuel spill reported in the U.S. or Canada since 2006 was the Lynchburg, Va. derailment and fire in April 2014.

The significance of this particular series of railway disasters to the citizens of Benicia is that they all involved CPC-1232 tank cars, the same cars that Valero would use for the transportation of crude to its facility in Benicia, according to the Draft Environmental Impact Report.

In a Feb. 23 editorial titled, “Get rid of exploding tank cars,” the San Francisco Chronicle states that “Valero Energy Co. has agreed to haul Bakken crude to its Benicia bayside refinery in the newer CPC-1232 cars as part of its city permit application to revamp its facilities to receive crude by rail rather than by oceangoing tanker.  But that promise now appears inadequate to protect the safety of those in Benicia as well as in other communities – Roseville, Sacramento, Davis – along the line.”

The same edition of the Chronicle details a report from the Department of Transportation predicting that trains hauling crude oil or ethanol will derail 15 times in 2015 and average 10 times yearly over the next two decades, causing $4.5 billion in damage with potential fatalities of more than 200 people in a given accident.  This may actually be an underestimate based on recent major derailment rates.

Friends and foes of CBR alike agree that the transportation of crude oil by rail involves inherent risk.  Can’t we also agree that the risk should be reduced to the greatest extent possible before inviting these potentially explosive trains to Benicia?  Lowering the risk of tank car derailment, rupture and explosion now should translate into saved human lives and prevention of environmental disasters in the future.

The danger can, in fact, be mitigated.  The crude can be stabilized prior to its transportation by extraction of its most volatile components.  North Dakota has implemented standards making this mandatory for Bakken crude, but many feel that their new guidelines are overly lax.  New federal regulations due to be released in May could further address this, as would rail safety measures such as Positive Train Control and electronically controlled pneumatic brakes.  New, safer tank cars designed specifically to carry this type of crude have been designed and are in production.

Unfortunately, the new federal guidelines will likely require years for full enforcement, and complete phaseout of the existing, unreliable tank car fleet by newer, stronger cars, such as the Greenbrier HM-251, will also require years of effort.

Accordingly, if we agree that the risks of transportation of crude by rail should be absolutely minimized prior to approving the CRB project, we have to acknowledge that this is currently beyond Valero’s reach and the Use Permit Application should be denied.

Those who would roll the dice and approve the current application should consider how comfortable they will feel with that decision once they find themselves in a front row seat at the Park/Bayshore railroad crossing watching fifty tank cars containing 1,470,000 gallons of potentially explosive crude rumble by on the same spur line that has seen derailment of five train cars since Nov. 4, 2013 (in addition to the two locomotives that derailed on Sept. 7, 2014 near the port).

Kudos to Planning Commission members for the time and energy spent on fairly evaluating this project.  It would seem that as time has passed the correct path forward has become much clearer.  At this point, the ongoing health and well-being of all Benicians should hold foremost importance in the decision-making process.  Their protection is the least we can expect from our city government.

James Egan, M.D.