Tag Archives: Volatility

SAN FRANCISCO CHRONICLE: Benicia’s rejection of oil trains could reverberate across country

Repost from the San Francisco Chronicle

Benicia’s rejection of oil trains could reverberate across country

By Kurtis Alexander, 9/21/16 5:11pm
The Valero refinery is seen in the background behind signage for a railroad crossing on Wednesday, October 22, 2014 in Benicia, Calif. Photo: Lea Suzuki, The Chronicle
The Valero refinery is seen in the background behind signage for a railroad crossing on Wednesday, October 22, 2014 in Benicia, Calif. Photo: Lea Suzuki, The Chronicle

Benicia’s rejection of plans to bring trains filled with crude oil to Valero Corp.’s big refinery in the city was hailed Wednesday by critics of the country’s expanding oil-by-rail operations, who hope the flexing of local power will reverberate across the Bay Area and the nation.

Of particular interest to environmentalists and local opponents, who for years have argued that Valero’s proposal brought the danger of a catastrophic spill or fire, was a last-minute decision by U.S. officials that Benicia’s elected leaders — not the federal government — had the final say in the matter.

Word of that decision arrived just before the City Council, in a unanimous vote late Tuesday, dismissed Valero’s proposal for a new $70 million rail depot along the Carquinez Strait off Interstate 680. Valero had said the project would not only be safe but bring local jobs, tax revenue and lower gas prices.

“We’re pleased with the decision and the implications it will have across the country,” said Jackie Prange, a staff attorney for the Natural Resources Defense Council, one of several groups opposed to the project. “This issue is live in a number of sites across the country. This is definitely a decision that I think cities in other states will be looking to.”

As oil production has boomed across North America, so has the need to send crude via railroad. The uptick in tanker trains, though, has been accompanied by a spate of accidents in recent years, including a 2013 derailment in the Quebec town of Lac-Megantic in which a 72-car train exploded and killed more than 40 people.

The authority of communities to limit oil trains has been clouded by the assertion of some in the petroleum industry that local officials don’t have jurisdiction to get in the way. Companies like Valero have contended that railroad issues are matter of interstate commerce — and hence are the purview of the federal government.

Shortly before Tuesday’s meeting, however, Benicia officials received a letter from the U.S. Surface Transportation Board, which wrote that Valero, based in Texas, was not a railroad company and that the proposed rail terminal fell under city jurisdiction.

“It’s what I was waiting for to help me make my vote more defensible,” said Councilman Alan Schwartzman at the meeting.

Earlier this year, Valero had asked the Surface Transportation Board for “preemption” protection for the project after Benicia’s Planning Commission rejected the proposal. The plan proceeded to the City Council upon appeal.

The plan called for oil deliveries from up to two 50-car trains a day, many passing through several Northern California communities en route from the Bakken shale formation in North Dakota. Those trains would carry as many as 70,000 barrels of oil.

The company billed the project as a way to keep gasoline prices low in the absence of a major oil pipeline serving the West Coast. Crude is currently brought to the Bay Area mostly by boat or through smaller pipelines.

On Wednesday, Valero officials expressed frustration at the city’s decision.

“After nearly four years of review and analysis by independent experts and the city, we are disappointed that the City Council members have chosen to reject the crude by rail project,” spokeswoman Lillian Riojas wrote in an email. “At this time we are considering our options moving forward.”

The vote directly hit the city’s pocketbook. Nearly 25 percent of Benicia’s budget comes from taxes on the oil giant, and the city coffers stood to grow with more crude. The refinery employs about 500 people, according to city records.

But the city’s environmental study showed that oil trains presented a hazard. The document concluded that an accident was possible on the nearly 70 miles of track between Roseville (Placer County) and the refinery, though the likelihood was only one event every 111 years.

The document also suggested that much of the crude coming to the Bay Area from North Dakota, as well as from tar sands in Canada, was more flammable than most.

Several cities in the Bay Area and Sacramento area joined environmental groups in calling for rejection of the project.

“The council’s vote is a tremendous victory for the community and communities all throughout California,” said Ethan Buckner of the opposition group Stand, who was among more than 100 people who turned out for the council’s verdict. “At a time when oil consumption in California is going down, projects like this are unnecessary.”

At least two other plans are in the works for oil delivery by rail elsewhere in the region — in Richmond and Pittsburg. A handful of other proposals have been put forth in other parts of California, including the expansion of a rail spur at a Phillips 66 refinery in San Luis Obispo County, which is scheduled to be heard by the county planning board Thursday.

Prange, with the Natural Resources Defense Council, said this week’s finding by the Surface Transportation Board gives cities the confidence to reject the proposed oil trains, if they wish to do so.

“It reaffirms the power of local government to protect their citizens from these dangerous projects,” she said.

U.S. oil deliveries by rail have grown quickly, from 20 million barrels in 2010 to 323 million in 2015, according to government estimates. In response, federal transportation officials have worked to improve the safety of oil-carrying cars with new regulations.

But over the past year, rail deliveries nationwide have slowed, in part because of the stricter rules as well as local opposition, falling crude prices and new pipelines.

Critics have complained that the tightened rules have fallen short, pointing to incidents like a June train derailment in Mosier, Ore., which spilled hundreds of thousands of gallons of crude into the Columbia River. Leaders in Oregon are discussing a statewide ban on crude trains.

Kurtis Alexander is a San Francisco Chronicle staff writer.
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‘MOSIER’ Act demands derailment investigations and more

Repost from the Hood River News

‘MOSIER’ Act demands derailment investigations

July 19, 2016

DAMAGED Union Pacific oil train car is trucked away from town on June 8 during an anti-oil train rally at exit 69 in Mosier.
DAMAGED Union Pacific oil train car is trucked away from town on June 8 during an anti-oil train rally at exit 69 in Mosier. Photo by Kirby Neumann-Rea

Oregon Senators Jeff Merkley and Ron Wyden introduced a bill last Wednesday that would compel federal regulators to investigate every major oil train derailment.

The bill came in response to the June 3 fiery derailment in Mosier.

The Mandate Oil Spill Inspections and Emergency Rules (MOSIER) Act calls on the National Transportation Safety Board (NTSB) to clarify the Federal Rail Administration’s authority to place moratoriums on oil train traffic after major wrecks, and would require the Department of Transportation to reduce the amount of volatile gases in the crude oil those trains have been hauling.

“As Oregon has seen firsthand, these oil trains are rolling explosion hazards,” Merkley said in a statement. “That’s unacceptable. We need long-term solutions that will keep communities safe. Every accident needs to be fully and independently investigated.”

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U.S. Sen. Jeff Merkley

The NTSB declined to launch a formal investigation into the Mosier derailment because there were no injuries or fatalities, and they deemed the wreck didn’t bring to light any new significant safety issues.

In a July 15 letter, the board replied that the agency “decided not to launch on the Mosier derailment due to limited resources and the current investigative workload in the Office of Railroad, Pipeline and Hazardous Materials Investigations (RPH). This information indicated that the circumstances of this accident did not pose any new significant safety issues. The tank cars were breached in a manner similar to those that we have seen in other accident investigations. In addition, the derailment resulted in no injuries or fatalities.”

Merkley argued the Federal Rail Administration should have the power to enforce moratoriums until identified problems are fully resolved, and that the more volatile type of crude known as Bakken needs to be “stabilized before it rolls through our communities.”

“Oregonians deserve the strongest possible protections from oil train derailments,” Wyden said. “This bill ensures that federal authorities can stop trains after a major derailment until a thorough investigation has been completed, and that the NTSB has ample resources to closely examine the root causes of such a crash.”

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Sen. Ron Wyden | Photo by Kirby Neumann-Rea

The proposed Act would:

  • Require the NTSB to investigate every major oil train derailment and provide resources to hire additional investigators.
  • Clarify the Federal Rail Administration’s authority to put a moratorium on unit oil trains following an accident to allow for investigations to be completed and safety recommendations to be implemented.
  • Requires the Department of Transportation to establish and enforce a standard that reduces the amount of volatile gases in crude oil.

The MOSIER Act would supplement a 2015 rail safety bill, Hazardous Materials Rail Transportation Safety Improvement Act, which seeks to establish a fee on outdated tanker cars in order to get them off the tracks faster. Funds from the fee would pay for cleanup costs associated with railroad accidents, railroad staff cost, and training local first responders.

Merkley and Wyden were among 12 policymakers who signed that bill.

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California Reps push rail safety amendments, vote no on gutted energy security bill

By Roger Straw, The Benicia Independent, December 6, 2015

California Reps push rail safety amendments, vote no on gutted energy security bill

Benicia’s neighboring congressional representatives, Mark DeSaulnier (CA-11) and John Garamendi (CA-3) co-sponsored TWO important amendments in new legislation passed recently by Republicans in the House.  The amendments were not enough to rescue a fundamentally bad bill.  DeSaulnier, Garamendi and Benicia’s rep, Mike Thompson (CA-5), all voted against passage.  (IMPORTANT: See Reasons below.)

1.  According to a December 3 press release, a measure to improve the safety of crude oil rail shipments across the nation, introduced by Congressman Mark DeSaulnier (CA-11), Congresswoman Nita Lowey (NY-17),  and Congressman John Garamendi (CA-3), was passed in the House by unanimous consent and included as an amendment to the Republican sponsored North American Energy Security and Infrastructure Act (H.R. 8).

The amendment requires the U.S. Department of Energy (DOE) to study the maximum level of volatility that is safe for transporting crude oil-by-rail within one year. Since 2008, oil traffic has increased over 5,000 percent along rail routes leading from production zones in the central continent to refineries and hubs along the coast.

“Crude oil production is at record levels, and railroads are moving more crude oil than ever. For over 25 years, I have represented areas in Contra Costa County which include four oil refineries and two destination facilities for oil-by-rail. This initiative is a first step in addressing concerns of communities, like those in my district, that face threats of environmental degradation, injury, and loss of life due to the unsafe handling of volatile oil in our railroad system,” said Congressman DeSaulnier.

2.  Another amendment to the bill, introduced by Rep. Garamendi, added the single word “transportation” to the section directing the Department of Energy to study “energy security valuation methods.”  According to Rep. Garamendi’s press release:

Energy policy can’t simply focus on “generation” …. “How we transport energy deserves very careful consideration. Too often, these choices are made without consideration of strategies to achieve important policy goals like creating good manufacturing jobs and enhancing our national security. Safety must also be a top concern: oil train traffic has increased by 5,000 percent because of the shale oil boom. The risk of derailments, spills and explosions is very real, and we need a volatility standard to guarantee the safety of the communities this oil traffic passes through. Oil trains can and do pass by major residential neighborhoods and schools in my district, including Davis, Dixon, Suisun and Marysville. I want them to be as safe as possible.”

Reasons…
Garamendi’s press release included his reasons for voting NO on the bill as amended:

Despite the success of his amendments, Congressman Garamendi voted against final passage of H.R. 8. The bill started out as a bipartisan compromise on energy policy before being gutted in favor of a bill that caters to the wish lists of big coal and big oil at the expense of consumers, agriculture and the environment.

“The very same week that leaders across the globe are meeting in Paris to find a worldwide solution to climate change, our Congress is seeking to lock our country into dependence on energy sources like coal and oil that pollute our environment and contribute to climate change,” said Congressman Garamendi. “H.R. 8 would artificially subsidize coal, inhibit the development of clean energy technologies, and reverse progress on energy efficiency. With climate change threatening our planet and way of life, we need to search for new solutions, not drag our country back to the energy policy of the last century.”

Congressman Garamendi was especially troubled by the adoption of an amendment to allow unfettered exports of crude oil without any safeguards for American motorists or industries.“If our country is seeking to become energy independent, it makes zero sense to allow unrestricted exports of our oil overseas,” he said. “It may make more profits for the oil industry, but it won’t help consumers, agriculture, or the refinery industry here at home. It’s a bad idea.”

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