Category Archives: North American light crude oils

Rocklin Deputy Fire Chief reports on oil train hazards

Repost from the Roseville & Granite Press Tribune

Oil train wrecks across nation put Rocklin on alert

South Placer train yards at center of Valero’s proposal
By Scott Thomas Anderson, Editor, October 8, 2014
The train tracks that run between Rocklin and Roseville will be filled with nonstop oil trains if Vallero Refinery’s plan is approved. | Ike Dodson – The Placer Herald

The U.S. and Canada have together experienced seven sizable accidents in the last two years involving oil shipped across rail lines — and Rocklin leaders have no intention of seeing their city become the eighth location on the list as Valero moves forward with plans to push thousands of tanker-cars filled with “black gold” through the region.

Not without a plan, at least.

Two months ago, the Valero Refinery plant in Benicia, some 81 miles from Rocklin, submitted an Environmental Impact Report to California regulators for its Crude by Rail Project. Valero’s plan would bring individual train cars full of crude oil from Montana, North Dakota and Saskatchewan converging on the Union Pacific rail yard in Roseville, where they would be assembled into 50-car trains and then sent on to Benicia. According to the EIR, Valero hopes to send two of these 50-car convoys plugging through the older sections of South Placer County every day.

Since the release of Valero’s EIR, Rocklin Deputy Fire Chief Richard Holmes has been examining potential dangers for the city. In a recent staff report submitted to council members, Holmes noted that, between 2013 and 2014, seven American and Canadian cities have been forced to respond to serious accident involving crude oil, ethanol or similar petrochemicals being shipped across rails.

“The hazard identification of crude oil is ‘immediately hazardous’ with a highly flammable distinction,” Holmes wrote. “There have been many major accidents involving crude oil in North America … these events demonstrate that accidents can happen.”

Holmes added that Rocklin’s risks are likely softened by the fact its train tracks run only a few miles from Roseville’s Union Pacific yard, thus forcing any oil tankers heading northwest to depart on their way from one city to the other at “relatively slow” rates of speed.

However, even that rare bright spot in Holmes’ report may be of limited consolation to Rocklin city council members. In February, an oil train that crashed in Lynchburg, Virginia, was traveling at only 24 miles per hour, according to its ownership company, CSX. In that case, seven oil cars spilled into the environment — with three plunging directly into the James River.

The Lynchburg oil train wreck is in addition to the seven larger recent disasters Holmes mentioned in his analysis.

Rocklin Fire Department’s immediate conclusions in the face of Valero’s plans involve identifying the community’s specific risks if an oil train accident occurs, and then gearing training and preparedness for those exact scenarios. One asset the fire department currently already has is a foam tender with over 1,000 gallons of Class B foam. If the Valero EIR passes, obtaining more backup resources may be a topic the city council considers.

Rocklin City Public Information Officer Karen Garner said the recent staff report to leadership is, for the moment, an overview.

“The presentation was just about presenting the facts and current status of a topic that’s received a lot of attention lately,” Garner said this week. “No request for additional equipment or resources is being made at this time.”

VALLEJO TIMES-HERALD: Sacramento-area leaders concerned about crude-rail risks

Repost from The Vallejo Times-Herald

Sacramento-area leaders concerned about crude-rail risks

Uprail communities urge Benicia to address oil train safety hazards
By Tony Burchyns, 08/09/2014

Sacramento-area leaders are voicing concerns about Valero’s proposed crude-by-rail plan, accusing Benicia of paying too little attention to potential “very serious” hazards of increased oil train shipments through Placer, Sacramento, Yolo, Solano and Contra Costa counties.

In a draft comment letter on the project, the Sacramento Area Council of Governments last week sharply criticized a Benicia study that found that the crude oil trains rattling through cities and sensitive habitats would pose no “significant hazard” whatsoever.

“We believe that conclusion is fundamentally flawed, disregards the recent events demonstrating the very serious risk to life and property that these shipments pose, and contradicts the conclusions of the federal government, which is mobilizing to respond to these risks,” the letter states.

In May, the U.S. Department of Transportation found that crude-by-rail shipments pose an “imminent hazard,” based on a recent pattern of fires and spills involving crude oil shipments from the Bakken oil fields of North Dakota.

The letter urges the city to “substantially revise” the project’s draft environmental impact report “so that it will fully inform the public and the City Council of the full impacts.”

Valero is proposing daily shipments of up to 70,000 barrels of crude to its Benicia refinery. The tank cars would originate at unspecified North American sites and be shipped to the Union Pacific Railroad’s Roseville yard, where they would be assembled into two daily 50-car trains to Benicia.

Last month, Benicia officials extended the public comment period on the project’s draft environmental impact report to Sept. 15.

The council — which represents six counties and 22 cities in the Sacramento region — is set to approve its draft letter later this month. Meanwhile, the Yolo-Solano Air Quality Management District, Yolo County Board of Supervisors and Caltrans separately have submitted comment letters to Benicia expressing concerns about the project.

Yolo County officials contend that Benicia’s project analysis “provides only a brief review of the environmental, safety, and noise effects on upstream communities.”

“All areas along the route will have the same trains traveling on them,” the Yolo County officials wrote. They added that potential risks to all communities along the rail line should be studied.

The Yolo-Solano Air Quality Management District recommended that the city offset increased air emissions from locomotives by supporting clean-tech programs in the region. The district also faulted the city for not studying the project’s cumulative air pollution effects throughout Sacramento and Yolo counties, as well as parts of Placer, El Dorado, Solano and Sutter counties.

Caltrans focussed its concerns on how oil train deliveries would impact Interstate 680 near the Bayshore Road off-ramp. They recommend safety measures — including rail signals — at the Bayshore Road crossing to prevent freeway backups during peak commute hours.

The agency also requested that a mechanism be put in place to advise Caltrans directly of any accidents affecting the freeway.

Benicia Senior Planner Amy Million said the city would respond to all valid project concerns following the close of the public comment period. The next public hearing on the project is set for 7 p.m. Thursday at City Hall, 250 E. L St.

Valero Energy reports second quarter 2014 results

Repost from Energy Global
[Editor: This article refers to “Brent crude oil.”   Wikipedia: “Brent Crude is a major trading classification of sweet light crude oil that serves as a major benchmark price for purchases of oil worldwide. Brent Crude is extracted from the North Sea, and comprises Brent Blend, Forties Blend, Oseberg and Ekofisk crudes (also known as the BFOE Quotation)….Brent is the leading global price benchmark for Atlantic basin crude oils. It is used to price two thirds of the world’s internationally traded crude oil supplies.”  – RS]

Valero Energy reports second quarter 2014 results

31/07/2014

Energy Global special reports

Valero Energy Corporation has reported financial results for the second quarter of 2014 (Q2). Net income from continuing operations attributable to Valero stockholders was US$ 651 million, US$ 1.22/share, compared to US$ 463 million, US$ 0.84/share, for the second quarter of last year.

Operating income for Q2 was approximately US$ 1.1 billion compared to US$ 805 million in the second quarter of 2013. The US$ 280 million increase in operating income was due primarily to higher refining throughput volumes and wider discounts relative to Brent crude oil for sour and certain North American light crude oils. These positive drivers were partially offset by weaker gasoline and distillate margins relative to Brent crude oil in most regions and higher natural gas costs in the second quarter of 2014 versus the second quarter of 2013.

Valero CEO and President Joe Gorder commented: “Valero delivered solid financial results for the quarter despite generally weaker product margins relative to Brent crude oil. We continued to execute our strategy to reduce feedstock costs by processing additional volumes of cost advantaged North American crude oil and investing in logistics assets to deliver those feedstocks to our refineries”.

Refining throughput volumes averaged 2.7 million bpd for Q2, an increase of 115 000 bpd from the second quarter of 2013. According to Valero, the increase in volumes was due primarily to less turnaround activity and higher utilisation rates spurred by the availability of discounted North American light crude oil on the US Gulf Coast.

“We increased North American crude oil consumption at our Quebec City refinery to 83% in the second quarter of 2014 from 8% in the second quarter of 2013, so we are progressing well toward our previously stated goal of reaching 100% by year-end. We also began processing Canadian bitumen through our new crude-by-rail unloading facility at our St Charles refinery”, Gorder said.

Ethanol operating income for Q2 was US$ 187 million compared to US$ 95 million in the second quarter of 2013. The US$ 92 million increase in operating income was mainly due to higher gross margin per gallon driven by lower corn costs as a result of abundant corn crop and lower industry ethanol inventories at the start of the quarter.

Gorder said: “Our ethanol investments have continued to be strong performers, delivering a total of US$ 430 million in operating income for the first half of 2014. We expect our eleventh ethanol plant, the Mount Vernon facility acquired in March of this year, to begin operating and contributing to the segment’s earnings in the third quarter”.

Capital expenditures for Q2 were US$ 806 million, of which US$ 240 million was for turnarounds and catalyst. Valero paid US$ 133 million in dividends on its common stock and US$ 228 million to purchase 4.0 million shares of its common stock. The company repaid US$ 200 million of debt that matured in April and ended the quarter with US$ 6.4 billion in total debt and US$ 3.5 billion of cash and temporary cash investments, of which US$ 382 million was held by Valero Energy Partners LP.

Valero expects 2014 capital expenditures, including turnaround and catalyst, to be US$ 3 billion, including approximately US$ 870 million allocated to logistics investments, most of which are expected to be eligible for drop-down into Valero Energy Partners LP in the future.

“Given the strong North American crude oil production growth, we continue to focus the majority of our strategic capital on light crude oil processing capability and logistics”, Gorder said. “We expect our refineries to benefit from access to lower cost crude oil and higher netback product export markets.”

Adapted from a press release by Emma McAleavey.