Category Archives: Fracking

The Dangers of Crude Oil By Rail in California and the Nation: Official Evasions and Possible Solutions

Reposted from an email sent by the author, Dr. Paul W. Rea, PhD.  This article has also appeared in The Daily Censored.
[Editor – Highly recommended.  This is a comprehensive summary on the issues surrounding crude by rail to date.  – RS]

CAN’T YOU HEAR THE WHISTLE BLOWIN’?

The Dangers of Crude Oil By Rail in California and the Nation: Official Evasions and Possible Solutions

By Paul W. Rea, PhD

“Our regulators have got to figure out whether they’re working in the interest of the American people or the oil industry.”

—Tom Weisner, mayor of Aurora, Illinois who shudders when he hears trains hauling crude oil through his Chicago-area town.

Just a year ago, 63 tank cars exploded and a firestorm engulfed Lac Mégantic, Quebec. In the middle of the night, highly volatile crude oil exploded into boiling balls of fire. With a radius of one kilometer, the blast and firestorm incinerated much of the town.

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The remains of many among the 47 victims were never found. Today residues from crude oil and heavy metals have rendered areas Lac Mégantic uninhabitable.

Media Silence about Oil Trains

Mile-long freight trains are hardly quiet, but somehow a drastic increase in oil trains has, until very recently, gone largely unheard. Beyond a lack of media attention, the incremental, rather than sudden, increases in oil-train traffic have made them harder to notice. While some of us have been fighting the Keystone XL pipeline, we may not have noticed the surge coming down the track on a mega-pipeline on rails. In 2008, American railroads were running 9,000 tank cars; today the number has soared to 434,000 (https://www.aar.org/keyissues/Documents/Background-Papers/Crude%20oil%20by%20rail.pdf).

Few Americans are aware that, nationally, transport of crude oil by train has jumped 45-fold between 2008 and 2013, according to a recent Congressional Research Service report(http://time.com/2970282/a-year-after-a-deadly-disaster-fears-grow-about-the-danger-of-crude-oil-shipped-by-rail/).

Nor are many Californians aware that, since 2007, their state has experienced a surge in crude-oil trains of 400%; and in 2013, the trains shot up at the highest rate yet. The number will likely spike still higher this year and next. These sharp increases mean that railroads and refineries are both expanding, subjecting the public to additional risks. In 2011, a fire at the Chevron refinery in Richmond, California belched out a huge cloud of toxic black smoke, sending 15,000 residents to the hospital (http://www.sfgate.com/bayarea/article/Chevron-refinery-fire-a-close-call-3802470.php).

Even if no accident occurs, public health consequences follow the transport fossil fuels. These include increased air pollution (soot and particulate matter from diesel smoke and coal dust, toxic fumes from refineries). These pollutants affect public health—especially among lower-income people who cannot afford to live very far from railroads and refineries.

Fire Bombs on Rails

Increasingly, accidents are occurring. Twelve derailments have occurred in the past year—one a month.

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Some have sparked huge explosions and fires, such as one that happened in Casselton, N.D. in December of 2013. First note the size of the towering fireball relative to the rail cars below; then imagine the conflagration that would have occurred if all of them had been tankers full of Bakken crude.

So it’s not a matter of if, but of when, where, and just how disastrous the debacles will be. Diane Bailey, Senior Scientist for the National Resources Defense Council (NRDC), warns that given the archaic regulations, high speeds, and aging infrastructure, accidents are just waiting to happen; “so far we’ve been lucky.”

While these trains commonly pull 100 tank cars and run a mile long, they can include 150 cars and run a mile and a half long (http://earthjustice.org/news/press/2014/community-leaders-advocates-call-on-secretary-of-transportation-to-ban-use-of-hazardous-rail-cars?utm_source=crm&utm_content=button). And these trains often carry highly flammable crude of the sort that caught fire in Lac Mégantic. Here in California, oil-train accidents have jumped from 3 in 2011 to 25 in 2013, even outpacing the steep increases in the number of trains. Nationally, train wrecks have increased 14 fold in the past five years, at an even faster rate than the increase in rail traffic (NPR “Weekend Edition” 7.6.14). The fact that mile-long trains carry nothing but crude oil increases the chances that if there is a derailment, a huge amount of liquid fuel suddenly becomes available, often feeding a chain conflagration

Nationally as well as locally, government officials have called for better preparation of first responders to fight crude-oil fires. This is hardy the solution to the problem, which surely lies with prevention. Fire Chief Greg Cleveland of La Crosse, Wisconsin indicates that despite upgrades, his firefighters have neither the advanced training nor the specialized equipment to lay foam on boiling balls of fire (NPR “Weekend Edition” 7.6.14). Moreover, they may not be able to reach a wrecked train quickly, if at all. Tragic experience with intensely hot forest fires surely suggests the inability of first responders to control huge fireballs pouring out toxic smoke.

Reacting to a rash of train wrecks—particularly to a derailment, a fire, and an oil spill into the James River in May 2014—the U.S. Department of Transportation (DOT) issued a safety alert citing an “immanent hazard” to the public. This emergency order requires that shippers indicate to state and local officials the number of trains each week, their specific routes, and the contents of the tank cars. It also requires railroads to inform state emergency commissions about any large (one million gallons or more) shipments of oil.

Railroads have long resisted such calls from local officials and first responders to know the amount and contents of the cars; the Association of American Railroads said only that rail companies would “do all they can to comply with the DOT’s emergency order.” Not surprisingly, the railroads have done little to comply:

County Commissioner Caren Ray from San Luis Obispo complains that she has repeatedly requested information on arriving trains but does not receive it (http://www.energy.ca.gov/2014_energypolicy).

Defective Tank Cars

For many years the standard tank cars, known to the industry as DOT 111s,have proved prone to rupture when overloaded or involved in a wreck. Two thirds of the tank cars still in use today are older models that safety experts have found vulnerable to puncture. Nevertheless, the railroads still use them to transport increasing flammable “extreme” crude oil.

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In Canada, the 111s built before 2011 are supposed to be phased out by 2017; in the US, however, the DOT is talking about a phase out but has set no date for taking “legacy cars” off the rails. Catering to the carriers and the owners, it has merely called for shippers to use the safest cars in their fleets and for outmoded cars to be replaced “to the extent reasonably practicable.” These recommendations are pathetically weak. They guarantee that the most flammable crude will be carried in the most dangerous tank cars (http://www.nytimes.com/2014/05/08/business/us-orders-railroads-to-disclose-oil-shipments.html?_r=0).

And are the newer models significantly safer? The Canadian Transportation Safety Board found that the post-2011 design, though an improvement, is still not safe enough for the transport of hazardous liquids like crude oil. Except for a few reinforced areas, the steel is still only a half inch thick.

One might suspect that federal regulators are “asleep at the switch,” but their own statements suggest something even more unsettling: Peter Geolz, former managing director at the National Transportation Safety Board (NTSB), the agency that investigates crashes, has remarked that the agency may be reluctant to phase out the older DOT-111s out of fear of slowing the U.S. energy boom (http://topics.bloomberg.com/national-transportation-safety-board). In other words, the feds figured “we wouldn’t want to over-regulate railroads; that might slow the biggest oil bonanza in history.”

California Regulators Also “Recommend” Action

While federal agencies largely control railroad traffic, clearly state government has an obligation to protect both the citizens of California and the state’s environment. Not until last winter did Gov. Jerry Brown finally convene an Interagency Rail Safety Working Group to deal with the oil-train juggernaut.

But rather than asking how much oil trains can haul without posing unacceptable risks to health and safety—and then finding ways to limit their length and number—the Working Group simply recommended safety measures for trains and sought to improve emergency responses. The Group’s report, “Oil by Rail Safety in California,” made many recommendations for improved safety procedures but mandated few changes in regulations (http://www.sfgate.com/file/830/830-SCAN6267.PDF).

Even if implemented, small measures such as more frequent track inspections only chip away at the monolith; they do not begin to deal with the big problems stemming from the great length, unprecedented number, and highly flammable contents of today’s crude-oil trains.

At best, these overdue safety recommendations seem utterly inadequate to handle current risks, let alone those involved with still more oil trains that are increasingly, as never before, running through populated areas.

On their way to Bay Area terminals, oil trains run right through cities such as Sacramento, where they endanger the 250,000 residents living near the tracks. How could this degree of risk escape the attention of the state legislators and regulators who work in downtown Sacramento? By the summer of 2014, the residents of Sacramento, Davis, Roseville, Pittsburg, and Benicia were becoming increasingly fearful of ever-more-frequent oil trains. Protests erupted in Sacramento and elsewhere along the line (http://www.sacbee.com/2014/07/08/6541363/crude-oil-train-protests-planned.html).

Oil Trains To Rumble Down East Bay Urban Corridor

Railroads and refineries are now planning to run crude oil trains along the highly urbanized east side of San Francisco Bay. A proposed upgrade to the Phillips 66 refinery in Santa Maria, California (outside San Luis Obispo) would allow it to “crack” more Bakken crude arriving from North Dakota on trains passing through Richmond, Berkeley, Oakland, Hayward, Fremont, and San Jose. The Oakland City Council passed a resolution opposing any additional trains running through that densely populated city (http://www.reuters.com/article/2014/06/18/us-usa-crude-rail-oakland-idUSKBN0ET34620140618).

The Working Group’s Toothless Guidelines

Since the Rail Safety Working Group made recommendations, not regulations, it didn’t take the panel long to publish a report and hold a workshop. Both were intended to reassure the Californians (especially those living along the East Bay rail corridor) that state and local governments are preparing for the increased threats posed by the previous year’s spike in oil trains. The prevention of accidents received much less attention.

Held in Berkeley on June 22nd, a day-long California Energy Commission’s (CEC) Workshop was led by top state officials: Energy Commissioner Janea A. Scott, Chair Robert Weisenmiller, and Public Utilities Commission President Michael R. Peevey. Since this event required a full day from highly paid administrators, it cost taxpayers lots of money.

The Workshop was highly instructive not only about the dangers posed by oil trains but also about the attitudes of state and local officials toward them. The subscript was, “even though we’re not fully ready for accidents, we expect still more of these trains.” Moreover, presenters tended to assume that accidents were the only threat. Although arson, sabotage, terrorism, and especially earthquakes are always potential threats to infrastructure, officials made almost no mention of them.

Workshop Promotes Emergency Responses, Not Prevention of Emergencies  

Throughout the day, mounting dangers to public health and safety—not to mention to the environment—were repeatedly underestimated. Speakers typically welcomed the energy boom and found few problems with the vast increase in oil trains since 2007.

Discussion did not include possible scenarios such as that of an overloaded oil train derailing on an old trestle and starting a forest fire far from first responders or polluting highly sensitive waterways. The state’s worst “high-hazard areas” are both along tracks traversing the Sierras (http://www.energy.ca.gov/2014_energypolicy).

Yet with increasing frequency, oil trains are traversing antiquated iron bridges such as the 1000-foot Clio Trestle spanning the Feather River Canyon. That one was built in 1909, 105 years ago.

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Imagine a mile-long train of substandard tank cars groaning and clanking across an antique trestle over a river that provides a significant percentage of the drinking water needed by a drought-ridden state.

No Big Picture Is Presented

The CEC Workshop was much about normalizing the abnormal, about making mile-long trains carrying highly flammable crude seem not just acceptable, but even inevitable.

Rather than admit that the country is now awash in an oversupply of oil, both government and industry speakers left the impression that the crude coming into California would serve the needs of its residents and the region. Tom Umenhofer, Senior Environmental Advisor to the Western States Petroleum Association, asked the audience to believe that “crude by rail [is] needed to supply the Western US” (http://www.energy.ca.gov/2014_energypolicy).

Speakers failed to mention that the petroleum industry targeted these refineries because they are situated near deep-water ports—and that, once refined, much of the increasingly low-grade crude is already being exported to Japan, China, and India. The Chevron refinery in Richmond, the second largest in the state, is pushing to expand its capacity—but not for the production of California-grade gasoline, the demand for which has declined in recent years (San Francisco Chronicle 7.12.14).

America As a Colony, California as a Sacrifice Area

The stark reality is this: the oil industry is exposing the American people to health and safety hazards so it can profit by refining an oversupply of dirty crude for export. In an ironic reversal, the fossil fuel boom is making the USA into a colonial country, one that suffers the depletion of its resources and the degradation of its environment so it can export its fossil fuels. But “colonial” isn’t the right term, really; the country is not getting subdued or exploited by a colonial power—but by its own corporate giants and their lackeys in government. Ditto for Canada, which is supplying most of the crude coming to California. Odd as it sounds, both countries are plundering themselves and fueling climate chaos.

In doing so, they’re demanding that California bear the risks as they turn key coastal areas into a sacrifice zones. While most of the crude is just passing through on its way to Asia, for those who live along the way there’s no “just” about it.

Listening to state and corporate officials, one does not hear about the larger problems faced by the industry: fracking and acidification technologies have enabled it to tap the vast reserves of the Bakken Shale in North Dakota and the tar sands in Alberta, but with nowhere nearly enough pipelines to carry all this crude. Resistance to pipelines in Canada has put additional pressure on the only other alternative carrier, railroads.

Tank-car trains haul the oil to refineries, which are usually located near seaports; but the industry has encountered resistance to its search for additional ports up and down the West Coast through which it can export gas and oil. Climate change activist Bill McKibbon sees grassroots resistance as part of a global movement to halt the overconsumption of fossil fuels (http://www.rollingstone.com/politics/news/the-fossil-fuel-resistance-20130411).

At least the Canadians, who are ravaging their north country to extract heavy crude from the tar sands, are up front about why they’re doing this: the conservative government led by Steven Harper and the corporations involved both want the profits from exports.

The Governor, the Legislature,and Big Money

The accepting, often endorsing tone of officialdom at the CEC Workshop fits with the Brown’s administration’s stance on energy production. Much as it has supported fracking, the technology making possible the glut of crude, the administration has also avoided policies that could restrict incoming tanker trains, slow “the energy boom,” or otherwise reduce exports and corporate profits. Only recently—and surely belatedly—did the administration clamp down on the injection of fracking waste into the state’s aquifers (http://www.commondreams.org/headline/2014/07/19).

As we all know, it pays to “follow the money.” In 2012, Jerry Brown received $5,000,000 from Occidental Petroleum to help fund a favored referendum campaign. Brown has consistently supported hydraulic fracking, calling it “a fabulous opportunity,” one he had to balance against climate protection (Mark Hertsgaard, “How Green Is Brown?” The Nation July 7/14, 2014).

Sacramento is awash in both money and industry lobbyists pushing for more fossil fuels and less alternative energy. ALEC, the American Legislative Exchange Council, remains a major player, just as it is in other statehouses and governor’s mansions. Bankrolled by Koch Industries, Exxon, and Philip Morris, ALEC led successful attacks on clean energy in Ohio and Oklahoma—and now they’re promoting fossil fuels in other states, notably California (http://www.energyandpolicy.org/alec_s_attack_on_clean_energy).

It’s indisputable that Brown and other prominent Democrats are influenced by the vast profits made by fracking oil, shipping and refining it, and then exporting a significant amount from California’s ports, including Richmond and Long Beach. It’s also important to factor in that enviable wages are earned during an energy boom, and that labor unions also make large contributions to Democratic candidates.

Actions State Agencies Should Take

Even if the governor and the statehouse are compromised and unwilling to act, state agencies can get tough. They can require that any new rail-related projects—and there are many just in California—do not go forward until regulations are significantly strengthened, speed limits are lowered, upgrades are made to existing infrastructure, and dangerous tank cars are no longer used in California.

That said, Sacramento cannot solve all the problems; it’s the feds—the DOT and the NTSB—who hold most of the power to regulate railroads and apply the brakes on runaway trains. Getting them to serve the public may be difficult, however, as recent disclosures about the Canadian government reveal. Internal government memos show how the government of Prime Minister Harper is so fixated on getting oil to market cheaply that it has ignored safety warnings from its own experts. The Canadian feds are relying on risky trains since pipelines involve a public review process like the one that has stalled the Keystone XL project (http://www.greenpeace.org/canada/en/Blog/lac-megantic-one-year-later-what-has-been-don/blog/49833).

Though activists need to keep up the pressure on the feds, the public can’t wait for them to act; in the short term, both activists and regular citizens need to work with state officials, who are apt to be more responsive to sufficient public pressure. The precedent-setting victories of the “national fracking revolt” that surged up in the first half of 2014 provide a heartening example of how grassroots pressure can get results (http://earthjustice.org/blog/2014-july/small-town-fracking-victory-makes-waves-across-the-country?utm_source=crm&utm_content=button).

Challenging the Grand Illusions

State and federal officials in both countries tend to assume that environmental damage can somehow be mitigated or remediated. Both seem to forget the catastrophic oil spills that occurred in Prince William Sound, Alaska in 1989 and the Kalamazoo River in 2010. Yet how could they forget Deepwater Horizon, the BP spill in the Gulf of Mexico that surely challenged conventional ideas about restoring damaged ecosystems? Once large amounts of oil are released, it’s too late for remediation. Today, four years later, any Gulf shrimper can tell you that.

It’s high time to challenge the illusion of endless economic growth on a finite planet. Underlying the policies governing oil trains are the world’s addiction to fossil fuels and the denial, by government and industry alike, that this dependency can continue without destroying the ecosystems that support all life. The obsession with corporate profits is costing us far too much, and the costs can only rise.

At a time when the urgency for climate action is ascendant, when burning fossil fuels clearly exacerbates the earth’s problems, surely it’s irresponsible to focus on the most profitable methods to extract and transport gas and oil. With the survival of so many species now in question, wouldn’t it make sense to leave more oil in the ground and keep it off the rails?

Rather than accepting reality, gradually kicking the habit, and converting to more benign and sustainable energy sources, officials tend to grasp at short-term technological fixes to problems whose solution will require tough choices, clearer perception, and more enlightened values—including a reverence for life.

 Paul W. Rea, PhD, is a researcher, author and activist in Newark, California.

For Further Reading

http://us.wow.com/search?q=human+causes+of+global+warming+articles&s_chn=25&s_pt=aolsem&v_t=aolsem&s_cs=-2823176844128393677&s_it=rhr1_relsearch

http://us.wow.com/search?q=human+causes+of+global+warming+articles&s_chn=25&s_pt=aolsem&v_t=aolsem&s_cs=-2823176844128393677&s_it=rhr1_relsearch

http://www.foodandwaterwatch.org/water/fracking/fracking-action-center/

http://www.nrdc.org/

http://www.earthjustice.org/

—For updates on the Alberta Tar Sands: http://www.forestethics.org/

—For the routes of oil trains: http://www.blast-zone.org/

—Juhasz, Antonia. The Tyranny of Oil: the World’s Most Powerful Industry and What We Must Do To Stop It New York: HarperCollins 2008.

Are Regulators Ignoring California’s New Fracking Law, SB4?

Repost from NBC Bay Area, Investigative Unit

Are Regulators Ignoring California’s New Fracking Law?

An analysis of oil wells fracked and reported by industry since the beginning of the year shows dozens of those wells are not showing up on the State’s website, as required by new state law.
Wednesday, May 28, 2014  |  By Stephen Stock, Liza Meak, Scott Pham and Mark Villarreal

As many as 77 different oil wells that the gas and oil industry reported were fracked in January and February had yet to show up on the website run by California’s Division of Oil, Gas and Geothermal Resources (DOGGR) by May 20, 2014. Stephen Stock reports in a video that aired on May 27, 2014.

As many as 77 different oil wells that the gas and oil industry reported were fracked in January and February had yet to show up on the website run by California’s Division of Oil, Gas and Geothermal Resources (DOGGR) by May 20, 2014.

That apparently flies in the face of a new law, titled [Senate Bill Four] or SB4, which requires the state to notify residents within 60 days of any well stimulation. SB4 also was supposed to require that oil and gas companies notify neighbors about upcoming well stimulation activities.

Well stimulation includes things such as hydraulic fracturing (or “fracking”), the use of gravel or hydrochloric acid, or other acids to stimulate well production.

Governor Brown signed the bill into law last September [pdf] and it took effect January 1, 2014.

Environmental Group, The Center For Biological Diversity analyzed publicly available fracking records. NBC Bay Area verified the analysis and found a total of 116 oil wells that have been fracked and voluntarily reported on the industry’s own website, Frac Focus.

Those fracking operations took place in January and February of 2014, after the new law took effect and long past the 60-day notification period.

As of May 20, 2014, 77 of those 116 wells had not yet been posted on the State of California’s website run by DOGGR.

The Center for Biological Diversity and NBC Bay Area also independently verified 62 separate wells where local air quality management records show hydrochloric acid was used. Those 62 wells don’t show up on the DOGGR website either, as of May 20, 2014.

That hydrocholoric acid data comes from the South Coast Air Quality Management District in Southern California (SCAQMD).

The new state law only requires that DOGGR post the use of hydrochloric acid on wells when the technique is used to stimulate well production.

State officials deny DOGGR is dragging its feet in implementing the new law, even though there are a number of wells that should have been listed on the state’s website before May 20th of this year.

“We’re hitting all of our marks,” said Jason Marshall, Chief Deputy Director of California’s Department of Conservation, which oversees DOGGR and the implementation of SB4.

“The requirements of SB4 is for the operators [oil and gas companies] to report to Frac Focus within 60 days after completing the stimulation job, the fracking, or other forms of stimulation,” said Marshall. “Then there’s an additional 15 days after that for it to show up on our site.”

“We are working diligently,” Marshall told NBC Bay Area. “As the operators are reporting the stuff on Frac Focus, we’re working diligently with them to get that additional information, so then that we can link that up so we can post it on our site.

Marshall also said that the reporting requirements for activities such as the use of hydrochloric acid are different between DOGGR and the South Coast Air Quality Management District.

“There’s actually a difference of reporting requirements down in the South Coast Air district, and from that versus what’s in Senate Bill Four (SB4),” Marshall said, “And there have been a number of operations that are not reportable under Senate Bill 4, but are under the South Coast rule and we’ve been working with South Coast so we have a little bit better continuity. We hope to remove the confusion for the public on well, how come it’s reported here but not there.”

Marhsall admitted that “some” the department’s reporting may confuse an already confused public. “But we can only control what we’re handed, in terms of implementation of SB4,” he said.

Hollin Kretzmann with the Center for Biological Diversity said all this is a smokescreen. Kretzmann, an attorney, who originally analyzed the fracking and well stimulation data, said the state simply isn’t following the new law.

The bottom line is these legislations aren’t working,” said Kretzmann. “They aren’t keeping communities safe from the dangers of fracking.”

That’s why Kretzmann says The Center for Biological Diversity sent a letter to Governor Jerry Brown, citing these discrepancies as reason to call for an immediate halt to fracking throughout California.

“Basically, fracking communities across California are being kept in the dark about what’s happening in their communities,” said Kretzmann. “Fracking is a dangerous practice and to not know where it’s happening or how frequently is a huge concern to not just me but to all Californians.”

Living Next Door to a Drilling Operation

At first glance St Andrews Gardens Apartments in Los Angeles appears like any other neighborhood in California.

But beyond the cinderblock wall and behind a stretched tarp next to the parking lot, St Andrews Gardens’ resident Don Martin only recently discovered that an oil drilling operation was using hydrochloric acid to treat the well behind a wall.

“The only barrier between this particular site and our apartment units is this wall,” Martin said. “It angers me because first of all, we weren’t informed there were chemicals at this particular location. Absolutely, we have a right to know what’s going on in our back yard behind that tarp.”

“SB4 is still a new law, it doesn’t happen overnight,” said State Senator Mark Leno of San Francisco, who co-sponsored SB4.

Even so, Senator Leno is concerned about what NBC Bay Area and The Center for Biological Diversity found in the analysis of the data.

He says that’s why he is now calling for a halt to all well stimulation including fracking until the issue can be studied further.

“I’m concerned and it only reinforces why we should consider a moratorium while we gather the information that’s required in SB4,” Leno told NBC Bay Area.

When asked if the point of SB4 was to inform, educate and clear up public confusion, Jason Marshall of California’s Department of Conservation agreed but said DOGGR is complying with the law as it is currently written.

“It absolutely is the point,” said Marshall. “One of the central points of SB4 is to increase public transparency. But again, we can’t impose more reporting requirements on operators.”

Los Angeles resident Don Martin says he just wants himself and his neighbors living next to the well to be informed.

“It started to be a concern to our health and safety,” said Martin. “In order to protect the residents here, it [SB4] absolutely needs to be enforced. And that’s part of the problem is the lack of enforcement.”

The Department of Conservation’s Jason Marshall does admit the law could and should be tweaked to help clear up confusion and San Francisco State Senator Leno says he will work to make that happen.

 

Prediction: U.S. will ban older rail cars for oil in 3-5 years

Repost from Reuters (also appearing in Insurance Journal)

CN Rail sees U.S. banning older rail cars for oil in 3-5 years

By Rod Nickel  |  May 29, 2014

Canadian National Railway Chief Executive Claude Mongeau said on Thursday he expects U.S. regulators to phase out use of DOT-111 tank cars in three to five years, following a deadly explosion in Quebec last year.

Mongeau also expects U.S. authorities to decide no later than early 2015 on a new, safer design for cars to transport crude oil, he said in an interview.

“Canada has already spoken; all these older legacy DOT-111 cars have to be phased out of flammable service (there) in the next three years,” Mongeau said, speaking at a Sanford Bernstein conference in New York. “I think the U.S. will follow suit, three years, five years who knows? That’s the range I think.”

Canada will require that older rail cars used for carrying crude oil be phased out by May 2017, the government said in April, moving ahead of the United States to ban the controversial cars in light of burgeoning oil-by-rail traffic

The transport of oil by rail is rising due to fracking in North Dakota and drilling in Alberta’s oil sands. Oil train cargoes have been under scrutiny since a shipment derailed in Lac Megantic, Quebec, last July, killing 47 people in an explosion.

The type of cars that derailed there are known as DOT-111 cars, and are seen as being vulnerable to puncturing and leakage.

The Association of American Railroads has made several recommendations for the new cars, including thicker, stronger steel, but shippers, leasing companies and manufacturers have their own views too, Mongeau said.

“There’s broad agreement that we need a new tank car design for the future,” he said. “There’s not agreement on every detail and that’s what the rule-making (process) needs to review and make a decision on from a government standpoint.”

CN transported approximately 73,000 carloads of crude oil in 2013 across its North American network, more than double the previous year’s carloads, but still only 1.4 percent of its total freight carloadings. It expects to double its crude oil carload volumes again by 2015.

Since October 2011, new oil tank cars have been built to a higher standard, known as CPC 1232. The CPC 1232 standard will be the minimum requirement in Canada three years from now.

In the U.S., that standard is not yet regulation, but new cars are already being built to that design, Mongeau said. The Association of American Railroads has said it would like to see a new standard of railcar for oil service with safety features exceeding the 1232.

BNSF Railway Co said in March that production could start in January on the first batch of 5,000 next-generation tank cars designed to carry crude oil more safely.

Even so, the older DOT-111 cars have several years of service remaining, despite their perceived flaws.

“It’s a risk management process,” Mongeau said. “We have used these cars for many, many years in flammable service.”

(Reporting by Rod Nickel in Winnipeg, Manitoba; additional reporting by Josh Schneyer in New York; Editing by Franklin Paul and Marguerita Choy)

Monterey Shale estimate bungled: background & causes

Repost from the Post Carbon Institute

The Peak Oil Crisis: The Monterey Shale Debacle

May 28, 2014  |  Tom Whipple

Last week the LA Times ran a story saying that the U.S. Energy Information Administration (EIA) is about to reduce “its” estimate of the amount of shale oil that can be recovered from the Monterey Shale under California by 96 percent. This reduction cuts the estimate of producible shale oil in the U.S. by 60 percent.

This development, of course, came as no surprise to those of us who have been watching the Monterey Shale situation closely. To begin with, anyone with the most rudimentary knowledge of geology knows that California is where great tectonic plates have been banging together for millions of years turning the earth below the surface into an incredible jumble. To produce shale oil one needs nice flat strata of oil bearing rock that run on for miles.

Then of course we have the issue of Chevron, which has been drilling in California since 1879. If one believes there really are 15 billion barrels of shale oil under the state, then why isn’t Chevron pumping it out by the tanker load?

Thus the interesting parts of this story are: who said there were 15.4 billion barrels of shale oil under California in the first place?; and how did the Department of Energy come to accept such an obviously flawed estimate, and trumpet the story far and wide so that many investors and policy makers in California and Washington fell for it?; and then why did it come to such a screeching halt leaving the country’s prospects for “energy independence” a dubious proposition?

Moreover, the government’s retraction of its estimate of shale oil prospects in California raises issues about just how good are its forecasts that North Dakota and Texas will continue producing large amounts of shale oil into the next decade.

The great Monterey Shale oil myth got its start back in July 2011 when the EIA stapled a cover on a contractor-produced “study” that it paid for entitled Review of Emerging Resources: U.S. Shale Gas and Oil Plays. In the fine print of the cover pages, however, the EIA did note that the “views in this report should not be construed as representing those of the Department of Energy.”

The underlying study, which was prepared by a small consulting company, INTEK, Inc., in Arlington, Virginia, purports to have been based on a wide range of sources and methods. However when it came to California the report’s author, Hitesh Mohan, said the California portion was primarily based on technical reports and presentations from oil companies. Presentations from oil companies are prepared to raise money from investors and can be expected to lay out the most optimistic view possible.

The methodology that produced the mythical estimate seems to have been something like this: take the 1,700 square miles of the Monterey Shale, drill 28,000 wells in it at the rate of 16 wells per square mile, wait until each well produces 550,000 barrels of oil, and you have your 15.4 billion barrels. Later research showed that only a handful of California oil wells ever produced 550,000 barrels of oil or anything close.

The California story only gets worse. The California oil industry funded a joint study by the University of California and the industry which concluded that exploiting the supposed 15 billion barrels of shale oil would result in from 512,000 to 2.8 million new jobs in the state; would increase per capita GDP by $11,000 and boost government revenue by up to $24.6 billion per year. All the politicians had to do was get out of the way, stop all this environmental nonsense over fracking and more regulations, and the state would be rich.

The writing on the wall came last year when thorough and independent studies by the Post Carbon Institute pointed out first that very little oil was coming out of California due to fracking of shale deposits as compared to those in North Dakota and Texas. In December of last year, a second and more detailed well-by-well study of what was actually happening in California blew the ridiculous INTEK/EIA conclusion out of the water. Although the Post Carbon Institute studies got little nationwide attention, several California newspapers and TV stations, which are much closer to the state’s well-being, did in-depth stories concluding that the 15 billion number and the ensuing riches were unlikely eventualities.

It is obvious that the new studies brought pressure on the Department on Energy to take a second look at what they were saying about shale oil in California. When it became obvious that were endorsing nothing but industry hype, they did an about face and lowered the estimate to 600 million barrels, which in itself may be high.

The EIA’s reaction to questions about one of the biggest blunders in its history is interesting. EIA Director Adam Sieminski told the Wall Street Journal that the oil bearing rocks are still under California, but the technology to extract the oil has not yet been developed. Industry spokesmen are more upbeat, saying that hundreds of smart engineers are working on the problem of producing California’s shale oil and that someday, if not sooner, they will be successful.

The California shale story raises once again questions about just where America’s shale oil and gas production is going and along with it the future of industrial society. Naturally, none of us want to hear that hard times, lower economic growth, and fewer jobs lie ahead. The Department of Energy clearly is trying to draw a fine line between the gross over-optimism exhibited in the Monterey shale incident and an energy apocalypse. But, do we really have to wait until the evidence of over-optimism is so overwhelming that it has to be admitted? There are several other “Monterey Shales” out there well-understood in the peak oil community where the Department of Energy continues to make overly optimistic estimates which will one day rebound to the detriment of us all.

Originally posted at Falls Church News Press.