Monthly Archives: April 2014

Federal Regulation (U.S.), National Transportation Safety Board, Pipeline and Hazardous Materials Safety Administration (PHMSA), Public Safety, U.S. Department of Transportation

Federal Pipeline and Oil-by-Rail Regulator Making 9% Staff Cut, Confounding Experts

Repost from Inside Climate News

Job cuts come at a time when PHMSA is struggling to regulate the nation’s aging pipeline network and new pipelines tied to the oil and gas boom.
By Elizabeth Douglass, InsideClimate News | Apr 24, 2014

Ruptured aging pipeline, image courtesy of PHMSA. If employees accept all of the available buyouts, PHMSA will shrink to a full-time staff of 386, putting it 112 jobs short of its approved payroll for the current fiscal year.

The federal regulator for petroleum pipelines and oil-toting railcars is offering employee buyouts that could shrink the agency’s staff by 9 percent by mid-June—a step that has confounded observers because the agency is widely regarded as being chronically understaffed.

Pipeline and Hazardous Materials Safety Administration (PHMSA) spokesman Damon Hill said the buyout offers are meant to “help the agency manage attrition in areas where a large and growing number of employees are eligible for retirement by offering an inducement for a limited number of employees to voluntarily retire or resign.”

Hill said PHMSA is continuing to hire in key areas at the same time. “I understand how some folks may be looking at [the buyout effort], but it’s part of an overall plan to retain expertise and plan for retention and things like that,” he said. “There is some good that comes out of this.”

Still, the job cuts come at a time when PHMSA is already under considerable duress. Politicians and the public have been pushing the agency to more rigorously regulate the nation’s aging pipeline network as well as the many new pipelines tied to surging domestic oil and natural gas production. A spate of damaging pipeline spills and oil-by-rail accidents is adding to the workload, exposing PHMSA’s shortcomings and intensifying scrutiny of the agency.

PHMSA, which is part of the Department of Transportation, regulates the 2.6 million miles of U.S. pipelines that carry hazardous liquids such as crude oil and fuels. It’s also responsible for making sure that more than 6 million tons of other hazardous material travels safely across the country each day via air, rail, ship and vehicle.

Carl Weimer, executive director of the Pipeline Safety Trust and a member of PHMSA’s technical committee for pipeline safety standards, was puzzled by news of the agency’s move to trim its staff.

“It seems like a lot of people … [and] an inopportune time,” he said. “They have all these Congressional mandates, they have all these requests from [the National Transportation Safety Board] to fix things, there’s been a series of incidents that they’re trying to investigate, and they’re even saying out loud how they don’t have enough inspectors and how they would like to do more.”

Weimer’s concern was echoed by Barbara Lawrence, who lives on a lake in Texas that has pipelines running through it carrying thick, diluted bitumen from Canada’s oil sands.

“I’m actually shocked because there’s a proliferation of [oil and natural gas] drilling in this country with the shale revolution, they’re bringing in tar sands, and they’re building pipelines like crazy,” she said. “Some of this stuff is hazardous, and [PHMSA] should be expanding at an incredible rate to make sure that all this stuff is safe.”

Hill, the PHMSA spokesman, said the agency is offering financial incentives for early retirement or resignation until mid-May, and those who volunteer must leave their jobs a month later. The buyouts were offered to investigators and engineers, as well as to transportation specialists, public affairs specialists and administrative, human resources and legal personnel.

“Industry offers buyouts periodically to entice older people to retire, and I think that’s all it was about,” said John Pepper, an engineer and inspector who left PHMSA for a natural gas storage company in February, between the buyout offers. Still, he said, “It was bizarre to me. We needed people and they offered that [buyout plan]. It didn’t really make sense.”

If all of the authorized slots are filled, the agency will lose 33 employees. Spokesman Hill said 13 employees left PHMSA through a similar offer that closed at the end of 2013.

Together, the buyout programs could result in the loss of up to 46 employees. But because PHMSA recently hired six new people, the net loss to the agency would be 40 people, or 9 percent of the full-time workforce since the end of last year.

The size of PHMSA’s payroll cut seems small compared to private sector layoffs and the big reductions that have hit elsewhere in the federal government. But the losses are likely to have an outsized effect on PHMSA, which is already hampered by substantial vacancies, a plodding hiring process and the lengthy training that’s required for many of its new hires.

If employees accept all of the available buyouts, PHMSA will shrink to a full-time staff of 386, putting it 112 jobs short of its approved payroll for the current fiscal year. Despite having fallen further behind in its hiring because of the buyouts, PHMSA’s budget proposal for 2015 seeks a major expansion to 602 full time positions.

Previous efforts to substantially boost PHMSA’s budget and staffing have been thwarted by political wrangling over the federal budget and the regulator’s inability to hire and retain enough inspectors and other key employees.

The administration had hoped to beef up PHMSA in 2013, but Hill said it got a $10.5 million funding cut instead because of the federal government’s across-the-board budget cuts called for under the sequester agreement between Congress and the White House. The agency saw a modest rise in funding for the current fiscal year, but PHMSA is hoping for a more significant increase in the next budget.

In making the case for more money, the regulator’s 2015 budget proposal said, “The pressing dangers of aging pipelines, the introduction of increasingly vulnerable pipeline materials, and the significant growth in new pipeline infrastructure demand PHMSA not only sustain, but increase current [inspection and enforcement] staffing levels to prevent incidents involving major injury to humans and damage to property and the environment.”

Hiring has been a problem, according to Pepper, the former PHMSA inspector.

“It’d be nice if they had a lot more inspectors, but it’s just almost impossible to hire them,” said Pepper. “I don’t know why they were letting inspectors go [in the buyouts].”

The rapid expansion of oil and natural gas drilling—and the pipelines that go with it—has led to a worsening shortage of inspectors and engineers throughout the industry. Multinational corporations with plenty of money to lure new talent are scrambling to land enough skilled personnel, so the task is doubly hard for governments that offer workers much lower salaries.

That has undermined PHMSA’s staffing ambitions, but they’re not alone. The National Transportation Safety Board, which conducts investigations following major pipeline or other accidents, recently noted that it has just 10 rail inspectors to handle 20 ongoing investigations involving railroad oil tankers.

PHMSA’s buyout offers could exacerbate the problem by letting experienced engineers go before replacements are ready to take over. It’s already happened elsewhere within the pipeline agency.

Weimer from the Pipeline Safety Trust cited the loss of two PHMSA employees who volunteered for the PHMSA buyouts and were gone shortly thereafter.

The employees handled requests for agency information submitted by the public—including groups like Weimer’s—under the federal Freedom of Information Act (FOIA). Their departure has crippled the pipeline agency’s FOIA office, undermining efforts to be more transparent and responsive to the growing demand for pipeline information to be made public.

“It was a blow for getting stuff out of the FOIA office,” Weimer said. “But we have also had conversations with multiple PHMSA people in [Washington, D.C.] who mentioned how much institutional memory and staff abilities were lost because of the last minute early retirement of many people within PHMSA.”

PHMSA’s spokesman said the buyout process was meant to avoid that problem.

“We have quite a few retirement-eligible employees,” said Hill, PHMSA’s spokesman. The agency’s buyout program, he added, “gives us time to work with those folks who decided to accept the offer and garner their expertise, and help us get other people ready to assume those responsibilities.”

Crude By Rail, Federal Regulation (U.S.), Local Regulation

Feds to brief Local and State Oregon Officials

Repost from The Statesman Journal, Salem, Oregon

Crude oil train safety: Oregon leaders to get briefing

 Tracy Loew, Statesman Journal   |  April 26, 2014

State and local government officials will get a briefing on crude oil transport safety next week.

Gov. John Kitzhaber requested the meeting, which will lay out current practices and identify additional steps that may be taken to ensure that trains traveling in Oregon are operating as safely as possible.

Last year, 19,065 tank cars of oil moved along Oregon’s railroads, up from just 659 in 2007. Some of those trains run through the Willamette Valley, including Salem.

Shipments are expected to increase, boosting the risk of oil spills or explosions.

Much of the oil comes from the Bakken field in North Dakota, and is more flammable than traditional crude.

Nationwide, critics are calling for safer tank cars and better emergency planning.

U.S. Transportation Secretary Anthony Foxx said today he will propose a comprehensive package of rules next week to deal with oil trains.

Among the presenters at Tuesday’s briefing will be representatives from the U.S. Environmental Protection Agency and U.S. Coast Guard; and the Oregon State Fire Marshal, Department of Transportation Rail Division, Department of Environmental Quality, Office of Emergency Management and Governor’s Office; as well as Union Pacific, BNSF and Genesee & Wyoming railroads.

The meeting is not open to the public.

Bakken Crude, Oil Industry, Rail accidents, Rail industry, Rail routing, Rail Safety, Rail tanker cars, Rail vs. Pipeline

Forbes: comparing crude delivery by pipeline, rail, truck and boat

Repost from Forbes
[Editor: This lengthy analysis is worthwhile for its factual background and its many links to source material, even though the author seems unaware that fossil fuels are on their way out.  – RS]

Pick Your Poison For Crude — Pipeline, Rail, Truck Or Boat

By James Conca  |  4/26/14

Crude oil is moving around the world, around our country, around pristine wilderness, around our cities and towns. It’s going to keep moving, will undoubtedly increase during our new energy boom, so what is the safest way to move it?

The short answer is: truck worse than train worse than pipeline worse than boat (Oilprice.com). But that’s only for human death and property destruction. For the normalized amount of oil spilled, it’s truck worse than pipeline worse than rail worse than boat (Congressional Research Service). Different yet again is for environmental impact (dominated by impact to aquatic habitat), where it’s boat worse than pipeline worse than truck worse than rail.

In both the United States and Canada, more crude oil, petroleum products, and natural gas are transported in pipelines than by all other modes combined, using the unit of ton-mile which is the number of tons shipped over number of miles (The Fraser Institute).

In the U.S., 70% of crude oil and petroleum products are shipped by pipeline. 23% of oil shipments are on tankers and barges over water. Trucking only accounts for 4% of shipments, and rail for a mere 3%. In Canada, it’s even more lopsided. Almost all (97%) of natural gas and petroleum products are transported by pipelines (Canadian Energy Pipeline Association).

Amid a North American energy boom and a lack of pipeline capacity, crude oil shipping on rail is suddenly increasing. The trains are getting bigger and towing more and more tanker cars. From 1975 to 2012, trains were shorter and spills were rare and small, with about half of those years having no spills above a few gallons (EarthJustice.org). Then came 2013, in which more crude oil was spilled in U.S. rail incidents than was spilled in the previous thirty-seven years.

Crude is a nasty material, very destructive when it spills into the environment, and very toxic when it contacts humans or animals. It’s not even useful for energy, or anything else, until it’s chemically processed, or refined, into suitable products like naphtha, gasoline, heating oil, kerosene, asphaltics, mineral spirits, natural gas liquids, and a host of others.

U.S. Refinery Capacity by PADD (Petroleum Administration for Defense Districts) in 2012. Source: Congressional Research Service; Energy Information Administration U.S. Refinery Capacity by PADD (Petroleum Administration for Defense Districts) in 2012. Source: Congressional Research Service; Energy Information Administration 

Every crude oil has different properties, such as sulfur content (sweet to sour) or density (light to heavy), and requires a specific chemical processing facility to handle it (Permian Basin Oil&Gas). Different crudes produce different amounts and types of products, sometimes leading to a glut in one or more of them, like too much natural gas liquids that drops their price dramatically, or not enough heating oil that raises their price.

As an example, the second largest refinery in the United States, Marathon Oil’s GaryVille Louisiana facility, can handle over 520,000 barrels a day (bpd) of heavy sour crude from places like Mexico and Canada but can’t handle sweet domestic crude from New Mexico.

Thus the reason for the Keystone Pipeline or increased rail transport – to get heavy tar sand crude to refineries along the Gulf Coast than can handle it.

The last entirely new petroleum refinery in the United States opened in 1976 (Congressional Research Service). Since then, the number of refineries has steadily declined while refining capacity has concentrated in ever-larger facilities. 25% of U.S. capacity is found in only eleven refineries. Recently, Shell’s Baytown refinery in Texas, the largest in the nation, was expanded to 600,000 bpd. Most of the big refineries can handle heavy crude, but many smaller refineries can process only light to intermediate crude oil, most of which originates within the U.S.

Thirty-three states have refineries, and most refineries can handle tens-of-thousands to hundreds-of-thousands of barrels per day, but the largest capacity sits around the Gulf Coast and in California where the oil boom in America began. However, in the 1990s after production of sweet domestic crude had significantly declined from mid-century highs, the big companies like Exxon, Shell, CITCO and Valero spent billions upon billion of dollars to retool their refineries to handle foreign heavy crudes.

Oil spill volume per billion-ton-miles compared among transportation modes. Source: the Congressional Research Service Oil spill volume per billion-ton-miles compared among transportation modes. Source: the Congressional Research Service 

With the number of refineries decreasing, and capacity concentrating in fewer places, crude usually has to be moved some distance. There are four ways to move it over long distances: by pipeline, by boat, by truck, or by rail. Each has its unique problems and none is without harm.

The question is: which is safest and which should we invest in most? Take two spills for comparison.

The Quebec train wreck last year killed 47 people and spilled 1.5 million gallons of crude onto land (Bloomberg.com). The Enbridge pipeline rupture in 2010 spilled over a million gallons of similar crude into the Kalamazoo River but did not kill anyone (Wikipedia).

Contamination of water is generally much worse for the environment than contamination of land as it spreads quickly over more area and impacts more species and habitat. But killing people makes a big difference. I don’t want to put a price tag on human life, but the Government has, and it’s about $8 million a person (NYTimes).

So the Quebec train derailment cost over $400 million in human life, and will cost another $150 million or so for clean-up and rebuilding the town. The Enbridge pipeline cost no human lives but will cost about a billion dollars to clean-up and, like the Exxon Valdez, will never really succeed.

Note: using this value of $8 million a person, we 300 million Americans are worth $2.4 quadrillion, hmm…maybe not a good number. If we use our net value for America as a whole, about $75 trillion, divide by 300 million people, then the average value of a human life in America would be $250,000. So the Quebec train derailment cost less than  $12 million in human life. Thus the danger of trying to gauge the value of a human life.

These are not easy questions and one’s vested interest has a great deal of sway in the answer. You really do need to pick your poison.

Like always, it will probably come down to money. And it won’t be about jobs (Pipeline Jobs), regardless of which end of the spectrum you believe, because there just isn’t enough jobs to matter compared to the value of the oil itself and the refinery capacity. It’s simply cheaper and quicker to transport by pipeline than by rail or by truck. The difference in cost is about $50 billion a year for shipping via the Keystone versus rail, totally eclipsing any economic effect of jobs in either direction.

A rail tank car carries about 30,000 gallons (÷ 42 gallons/barrel = about 700 barrels). A train of 100 cars carries about 3 million gallons (70,000 barrels) and takes over 3 days to travel from Alberta to the Gulf Coast, about a million gallons per day. The Keystone will carry about 35 million gallons per day (830,000 barrels). This puts pressure on rail transport to get bigger and bigger, and include more cars per train, the very reason that crude oil train wrecks have dramatically increased lately.

The Congressional Research Service estimates that transporting crude oil by pipeline is cheaper than rail, about $5/barrel versus $10 to $15/barrel (NYTimes.com).  But rail is more flexible and has 140,000 miles of track in the United States compared to 57,000 miles of crude oil pipelines. Building rail terminals to handle loading and unloading is a lot cheaper, and less of a hassle, than building and permitting pipelines.

It isn’t acceptable to just say we shouldn’t be moving oil, because we will for the next decade or more, no matter what. So, keeping in mind the difference between death/damage to humans and damage to the environment, which would you choose?

Like a few weeks ago, I would appreciate just one comment from each person for the first 24 hours after posting so we can get a tally before we get into the normal animated back and forth debates. Below is some more information on each transportation mode.

Rail

Two seemingly opposite facts –

1) from 1980 to 2012, the train accident rate in the United States fell 80 percent, the rail employee injury rate fell 85 percent and the RR crossing collision rate fell 82 percent, but

2) more crude oil was spilled in U.S. rail incidents in 2013 than was spilled in the previous thirty-seven years.

Huh?

Using data from the Pipeline and Hazardous Materials Safety Administration, 1.5 million gallons of crude oil were spilled from rail cars in 2013. On the other hand, from 1975 to 2012, railroads spilled a total of 800,000 gallons of crude oil (McClatchy; check out their great interactive map of spills over space and time).

Even worse, these data do not include rail accidents in Canada. 1.5 million gallons of crude oil spilled in a single day last year in Lac-Megantic, Quebec, and 47 people were killed. The shipment did originate in North Dakota so take your pick of provenance.

If crude oil shipping on rail is becoming a preferred mode for oil producers in our North American energy boom, this trend is very disturbing. In 2011, crude rail capacity between southern Alberta and the northern U.S. Great Plains tripled to about 300,000 barrels per day, about a third of the Keystone XL capacity. U.S. railroads delivered 7 million barrels of crude in 2008, 46 million in 2011, 163 million in 2012, and 262 million in 2013 (almost as much as that anticipated by the Keystone XL alone). To replace the Keystone XL with rail shipments would mean another doubling of rail capacity, but that would be just another couple of years given this trend.

The Association of American Railroads points out that over 11 billion gallons of crude were shipped in 2013, so these spills account for only one-hundredth of one percent. On the other hand, the environment and people’s health don’t care about what made it though OK, just what was spilled.

Our railroad infrastructure was not built to handle this mass of crude on its system and doesn’t use enough specialty cars. If this trend continues, major infrastructure investments need to occur on both sides of the border, as well as significant changes in protocol and regulation.

Like: big oil trains have to go slower, or oil tank cars have to be hazardous material cars.

It turns out that the rail industry recently modified its guidelines in response to the Quebec derailment (Congressional Research Service) as follows:

  • restrict train speeds to less than 50 mph
  • increase the frequency of track maintenance
  • install wayside defective equipment detectors, such as “hot box” detectors, that detect wheels with faulty bearings, every 40 miles, with specific protocols for conductors when defects are indicated
  • use only track in good condition to support speeds of 25 mph or higher.

Reducing train speed can reduce the number of cars that derail as well as the likelihood that oil will be released from those cars, or that explosions will result.

Truck

Although the news is filled with comparisons between pipelines and trains, the third vector is trucks. While we can compare relative risks, the issue with trucking is that it takes lots and lots of trucks to move billions of gallons of crude since a single tank trailer only holds about 9,000 gallons or 200 barrels, a little under a third of a rail car. Our present fleet only handles 4% of our needs, so shipping by truck instead of the Keystone XL would take another million-and-a-half tanker trucks. Trucking is the most risky form of transport from an accident standpoint (yes, driving is one of those things, like smoking, that will always be in the top four most risky things to do – What’s Really Gonna Kill You?) and also from a spill standpoint. However, it is the least impactive from an environmental standpoint since each truck is small and is mainly on land, so large spills to waterways are less likely than any other mode of transport.

What is important to note, however, is that regardless of the long-hauling mode, most petroleum eventually gets onto a truck for the short moves. This limits the tons-mile risk but increases the incident number risk.

In a white paper about the dangers of transporting dangerous goods by truck, the Canadian Trucking Alliance repeats its long-standing position that “the federal government should introduce a universal mandate requiring all trucks, where the driver is currently required to carry a logbook under the federal hours of service regulations, to be equipped with an electronic recording device; and introduce a manufacturing standard (in lock-step with the United States) requiring all new heavy trucks to be equipped with a roll stability system” (Canadian Trucking Alliance). In addition, the Alliance wants all Canadian provinces and U.S. states to follow Ontario’s and Quebec’s lead by requiring truck speed limiters.

Boat

Ship transport is possible along coastal waters and along large rivers and is the method that is used for almost all foreign imports except from Canada. The thing about ships is that they carry a lot of oil per boat and many of the largest spills in history are from boats, such as the Exxon Valdez and the latest one from a collision in the Houston Ship Channel just last month (NOLA).

Five out of the ten largest oil spills in U.S. history were from boats (List of oil spills). Most important is that they have immediate impact on aquatic ecosystems both in the ocean, in rivers, or along shorelines that are usually sensitive habitats. I still don’t understand why these keep happening with modern technologies to detect water depth and nearby boats. Human error needs to be better removed from this equation.

Pipeline

The most controversial transport mode today is pipeline, mainly because of the Keystone XL debate and the recent Pegasus and Enbridge pipeline ruptures. The industry points to the generally good safety record in terms of percentages. Among oil pipeline workers, the rate hospitalization was 30 times lower compared to rail workers involved in transporting oil, and 37 times lower than for road transport, between 2005 and 2009, the latest period for which complete data exists (Intermodal Safety in the Transport of Oil).

But pipeline spills are inevitable. About 280 pipeline spills occur each year in the U.S. that are deemed significant (USDOT), that is, either there is a fatality or injury requiring in-patient hospitalization, it causes $50,000 or more in total costs (measured in 1984 dollars), there are highly volatile liquid releases of more than 5 barrels or other liquid releases of more than 50 barrels, or there are liquid releases that result in an unintentional fire or explosion.

Again, you’ll notice that these measures are in human health and property damage, not environmental effects. Environmental impacts are very difficult to estimate and, in almost all cases, are not even attempted.

In the end, all of these transportation modes can be made safer if stricter regulatory controls and modern technologies are emplaced, but the questions remain – can we make the industry comply and which ones do we want to invest in?

Finally, what brave reader wants to calculate the value of an acre of land destroyed by an oil spill? The EU recently allotted $100 per acre for removing pristine land for energy use, but this seems way too low. My muse suggests you start with Sierra Club, NRDC and EDF.

Air Quality, Crude By Rail, Environmental Impacts, Fugitive Emissions, Odors, Offloading procedures

Offloading crude oil unit train causes terrible smells

Repost from The Natchez Democrat

Pungent odor has company holding nose

By Vershal Hogan  |  April 26, 2014

NATCHEZ — A spokeswoman for Genesis Energy said the company is looking into what may have made a delivery of crude oil to its Natchez terminal last week particularly malodorous.

Genesis operates a crude oil unloading facility in the Natchez-Adams County Port. Unit trains — that is, large transport trains — bring the oil to the port area, where Genesis loads it onto barges destined for the Gulf Coast refinery markets.

When a train was unloaded April 19, the crude oil was unusually smelly, and the smell was logged at the Adams County Sheriff’s Office as a hazardous materials incident, and the Natchez Fire Department responded to the area.

“We are looking into what caused it, because it was a little more noticeable than normal, and we are looking into ways to mitigate it in the future,” Genesis Spokeswoman Jennifer Stewart said.

Stewart said the smell was that of an intensified odor associated with crude oil, while Natchez Fire Chief Oliver Stewart said fire crews were looking for a natural gas leak based on the smell.

Chief Stewart said in addition to the fire department, Atmos Energy, which is also located in the port area, helped with the hunt for the smell with its leak-detecting equipment, he said.

Gene Perkins, who lives in the area, likewise said he smelled natural gas associated with the train. Perkins said last Saturday was not the only time that has occurred.

“The smell is so strong sometimes we get to where we can’t go outside,” he said.

“I am not trying to cause any problems for anybody. I would just like for the smell to go away.”

Perkins said based on conversations he has had with the Mississippi Department of Environmental Quality, he believes the odor is associated with the cleaning of the tanks Genesis unloads.

Jennifer Stewart said that’s not the case because Genesis doesn’t clean the tanks in Natchez.

“They are unloaded, and then they are sent back to where they came from,” she said.

“We are strictly an unloading and loading facility.”

Jennifer Stewart said Genesis does not use any chemicals that smell like natural gas at the Natchez facility, but does use some natural gas in its operations.