Category Archives: Crude By Rail

Wall Street Journal: on the DOT’s nonbinding safety advisory

Repost from The Wall Street Journal
[Editor: Stakeholders, senators, and even the tank car builders say the feds haven’t gone far enough.  Significant quotes: “‘Making it voluntary is not going far enough,’ Sen. Maria Cantwell (D., Wash.) told Transportation Secretary” … “The trade association representing railcar builders and car-leasing companies said the advisory doesn’t go far enough toward new standards for tank-car construction and retrofitting the existing car fleet.”  – RS]

U.S. Urges Companies to Use Sturdier Tank Cars For Oil-Trains

The Advisory Effectively Applies to About 66,500 Shipping Containers
By Russell Gold  |  May 7, 2014

U.S. safety regulators urged companies shipping crude oil from North Dakota to stop using tank cars that have been implicated in fiery accidents.

The Transportation Department’s nonbinding safety advisory, which carries less weight than an emergency order, said shippers should use the sturdiest cars in their fleets to transport crude from the Bakken shale.

The advisory effectively applies to about 66,500 tank cars—68% of the total commonly used to transport oil and other flammable liquids. Shippers instead should use the roughly 31,000 cars that have been retrofitted to improve safety or were built to higher standards.

The call to get the older tanker cars off the rails drew immediate criticism as too weak.

“Making it voluntary is not going far enough,” Sen. Maria Cantwell (D., Wash.) told Transportation Secretary Anthony Foxx at a Senate Commerce Committee hearing. Mr. Foxx assured her that the federal government was moving as quickly as possible to issue new rules.

The American Petroleum Institute said the industry had been working to upgrade tank cars for three years, and that during the next year “about 60% of railcars will be state-of-the- art, which is part of a long-term comprehensive effort to improve accident prevention, mitigation and emergency response.”

The trade association representing railcar builders and car-leasing companies said the advisory doesn’t go far enough toward new standards for tank-car construction and retrofitting the existing car fleet.

“With regulatory certainly, the car industry can get working” on retrofits right away, said Thomas Simpson, president of the Railway Supply Institute in Washington, D.C.

Calling Bakken crude shipments “an imminent hazard,” the agency also issued an emergency order Wednesday requiring railroads operating trains carrying more than one million gallons of Bakken crude the oil—about 35 carloads—to notify state officials about the movement of these trains. Trains transporting oil typically include at least 100 cars.

Railroads haven’t historically liked to disclose the routes or contents of their hazardous-material shipments even to the communities they travel through. But the Association of American Railroads, which represents the country’s big freight railroads, said its members will “do all they can to comply with the Transportation Department’s Emergency Order.”

State and local officials have complained that they haven’t been told about crude shipments, which have been rising rapidly. About 715,000 barrels of Bakken crude are being shipped by rail each day, according to the North Dakota Pipeline Authority, or almost 10% of all the oil pumped in the U.S.

A spokesman for  Berkshire Hathaway Inc. ‘s BNSF Railway said it routinely provides information to interested state agencies and emergency responders about the hazardous materials on its routes. He said BNSF also “believes that promulgation of a federal tank-car standard will provide much needed certainty for shippers and improved safety and response time for all first responders.”

The Canadian Transport Ministry last month gave railcar owners 30 days to stop using the roughly 5,000 least crash-resistant tank cars.

Regulators have been grappling with the rising amounts of crude oil being shipped across the country. A fiery derailment in Quebec last summer killed 47 people; more recently, crashes and derailments in Alabama, North Dakota and Virginia have involved fire and explosions.

Federal investigators suspect that crude from the Bakken shale is more combustible than oil from other regions.

A Wall Street Journal analysis in February found that Bakken oil was very flammable and contained several times the level of combustible gases as oil from elsewhere.

The Bakken oil field has grown quickly, producing more than a million barrels a day and outpacing the capacity of pipelines. Companies have increasingly relied on railroads to transport the oil to refineries on the coasts.

In February, railroads said they would slow down oil trains to no more than 40 miles an hour in urban areas and try to route these trains around high-risk areas. But a crude train that derailed in Lynchburg, Va., last week was traveling at only 24 miles an hour. Its cargo didn’t explode, but leaking oil burned in the James River.

—Betsy Morris and Bob Tita contributed to this article

    SF Chronicle: California refiners double volume of oil imported by rail

    Repost from the San Francisco Chronicle

    California refiners double volume of oil imported by rail

    Lynn Doan  |  May 3, 2014

    California, country’s biggest gasoline market, more than doubled the volume of oil it received by train in the first quarter as deliveries from Canada surged.

    The third-largest oil-refining state unloaded 1.41 million barrels in the first quarter, up from 693,457 a year ago, data on the state Energy Commission’s website showed last week. Canadian deliveries made up half the total and were eight times the number of shipments a year earlier. Supplies from New Mexico jumped 71 percent to 173,081 barrels. Those from North Dakota slid 34 percent to 277,046.

    Projects in works

    West Coast refiners including Tesoro Corp. and Valero Energy Corp. are developing projects to bring in more oil by rail from reserves across the middle of the U.S. and Canada to displace more expensive supplies. Crude production in the federal petroleum district that includes California and Alaska, has dropped every year since 2002, while drillers are extracting record volumes from shale in states including North Dakota and Texas.

    The surging flows of domestic oil to California “reflect a continuing improvement in crude-by-rail receiving facilities here,” said David Hackett, president of Stillwater Associates, an energy consultant.

    Rail shipments still account for a small fraction of California’s oil demand. In February, the state imported more than 20 million barrels of crude from abroad, according to the U.S. Energy Information Administration.

    Crude from North Dakota and Canada trades at a discount to Alaska North Slope oil, which rose 36 cents to $107.78 a barrel in early trading on Friday. Western Canada Select, a heavy, sour blend, gained 36 cents to $82.88. North Dakota’s Bakken crude also gained 36 cents to $95.28.

    It costs $9 to $10.50 a barrel to send North Dakota’s Bakken oil by rail to California, according to Tesoro, the West Coast’s largest refiner.

    Series of accidents

    Trains are bringing more oil to California even as projects face more regulatory scrutiny after a series of accidents involving rail cars carrying fuel. The most recent was on Wednesday, when a CSX Corp. crude train derailed in Lynchburg, Va., igniting a fire that led to an evacuation. A derailment in Quebec in July killed 47 people.

    The U.S. Transportation Department is studying changes to shipping oil by rail, and in February railroads agreed to slow such trains in urban areas. Canada ordered a phase-out of older tank cars last month.

    Officials in Benicia said Thursday that they’re delaying until June an environmental report on a rail-offloading complex that Valero has proposed at its refinery in the North Bay city. The San Antonio company originally planned to finish the project by the end of last year.

    Tesoro is six to eight weeks behind schedule in receiving regulatory permits for a rail-to-marine crude trans-loading terminal in Washington state, the company, also based in San Antonio, said Thursday. It now expects to receive the permits late this year or in early 2015, with construction taking about 12 months, Scott Spendlove, the chief financial officer, said on a conference call with analysts.

    Alaskan oil output has declined every year since 2002 as the yield from existing wells shrinks.

    Lynn Doan is a Bloomberg writer.

      Lynchburg derailment and explosion – TV news coverage

      Repost from WDBJ 7 CBS Lynchburg, VA
      [Editor: This 2 ½ minute video has local commentary and images after the explosion.  Apologies for the ad.  – RS]

      UPDATE: Train carrying crude oil derails in Lynchburg

      There are no reports of injuries at this time
      WDBJ7 Bedford-Lynchburg Newsroom Bureau Chief Tim Saunders
      WDBJ7 Anchor/Reporter Nadia Singh Nadia Singh

      video platformvideo managementvideo solutionsvideo player

      LYNCHBURG, Va. – Approximately 50,000 gallons of crude oil are gone from three tankers as a result of the train derailment in Lynchburg Wednesday, which sent flames and thick black smoke into the air.

      The CSX train was carrying between 12 and 14 CSX tanker cars when it derailed around 1:45 p.m. at the intersection of Ninth and Jefferson Streets, near Amazement Square. Three tanker cars are in the James River.

      Lynchburg officials told WDBJ7 that one tanker is empty, one is full and one is a third of the way full.

      Crews are working to determine what caused the derailment and working to start the clean up process.

      It’s too soon to tell if there will be any negative environmental impacts.

      For now, crews are working and environmental experts are urging the public to be vigilant and cautious.

      CSX representatives, local officials and the National Transportation Safety Board are working to clear out the wreckage.

      It’s not clear how much oil burned off or how much of it spilled into the river.

      People in the area between Washington and Fifth Streets were evacuated. There are no reports of injuries. It’s not clear yet what caused the derailment.

      The derailment happened when part of the CSX train ran off the tracks and caused a pile-up. The train was carrying crude oil that was housed in large tanks. When the train wrecked, the tanks broke open and the oil caught on fire. The train originated in Chicago.

      People who were near the scene when the crash happened said they heard a loud explosion. The derailment happened a few feet away from the Depot Grille restaurant. Workers saw the train as it came off the tracks.

      “We just saw it going sideways on two wheels,” witness Travis Uhle said. “One went down, and then the train just kept coming with a dog-pile on top of that.”

      Some people are being allowed back into the area to get their cars, but most of the area below Main Street remains blocked off. At one point a 20-block area was blocked off.

      According to a Lynchburg city official who was at the command post, crude oil leaked into the James River. Intake stations downstream were notified. Booms in the river are trying to catch the crude oil. The city official says that three or four train cars are in the James River.

      Jeff Hurst of the Virginia Department of Environmental Quality says it is not clear how much crude oil leaked into the James River. Before the DEQ can begin cleanup at the site of the derailment, they need to wait for fire crews to fully extinguish small fires around the riverbank that could re-ignite oil on top of the river.

      In the meantime, a contractor is placing booms downstream to try and contain as much oil as they can. Hurst says the DEQ hopes to begin cleanup work at the site of the derailment Wednesday night. The City of Lynchburg said there is no impact to the city’s drinking water supply.

      People who work at the Griffin Pipe Products on Seventh Street were unable to evacuate because the train derailment blocked the only way in and out of the property. CSX officials are working to remove the wreckage so those workers can get out.

      City of Lynchburg leaders say CSX is confident it will have the tankers moved and the site cleaned up by the end of the day Thursday.