Monthly Archives: May 2014

Bakken Crude, Heavy crude, Martinez CA, Shell Oil

Martinez Shell Refinery to refine more light Bakken crude

Repost from Bloomberg

Shell Considers Retiring California Coker Amid Shale Boom

By Lynn Doan May 19, 2014

Royal Dutch Shell Plc (RDSA), Europe’s biggest oil company, is considering retiring one of two coking units at its only refinery in California as the company seeks to run lighter crude at the plant.

The company has applied to county regulators for a permit to shut the flexicoker at the 156,400-barrel-a-day Martinez refinery northeast of San Francisco, a move that would shrink the plant’s reliance on heavy oils and cut its greenhouse-gas emissions by 15 percent, Destin Singleton, a Shell spokeswoman, said May 16. The unit helps convert the denser crude into more valuable products such as diesel and gasoline.

Shell is considering the shutdown as hydraulic fracturing and horizontal drilling unleash record volumes of light oil from shale formations across the middle of the U.S. California’s refiners, lacking pipeline access to the growing crude supplies, are bringing in the most ever by rail as they work to counter shrinking production within the state and from Alaska.

“The reality is that we are looking at each individual refinery and making economic decisions as to what is the most optimal feedstock,” John Abbott, downstream director for The Hague-based Shell, said in an interview at Bloomberg’s headquarters in New York May 16. “This is one of the most competitive assets on the West Coast of the U.S. and in California.”

Industry refining margins on the U.S. West Coast, a rough indicator of profitability, averaged $7.62 a barrel in the first quarter, almost twice the $4.07-a-barrel coking margin on the Gulf Coast, Shell said in a statement April 30.

Train Deliveries

While the Martinez refinery doesn’t have the equipment to unload oil from rail cars, it receives crude by pipeline from a complex in Bakersfield, California, that takes train deliveries, Singleton, based in Houston, said by e-mail. The refinery would continue to receive oil by pipeline and vessel using existing infrastructure once the coker is shut, she said.

Heavy crude pumped from California’s San Joaquin Valley dropped 35 cents to $95.20 a barrel, data compiled by Bloomberg at 2:01 p.m. New York time show. Light crude from North Dakota’s Bakken formation gained 82 cents to $98.59 a barrel.

Crude Mix

“Overall, heavy crudes are a big part of our current mix,” Singleton said. “We’ll be processing the same crudes we refine today, but the mix will be lighter — meaning significant reductions in greenhouse gas emissions, less electricity use, and more efficient operations.”

A delayed coker, which was installed at the refinery in the 1990s, based on air regulatory filings, will remain in service, she said.

Refiners from Tesoro Corp. (TSO) to Valero Energy Corp. (VLO) are working to bring more shale oil to their plants on the U.S. West Coast by rail. Trains delivered 395,053 barrels of oil to California in March, a record volume for that month, the most recent data available from the state Energy Commission show.

Shell is seeking permits to build a rail complex at its Anacortes refinery in Washington state that would allow the plant to unload oil from as many as six trains a week, regulatory filings show. The company has also said that it’s carrying upgraded crude to the West Coast from its Scotford oil-sands upgrader in Canada.

Crude Imports

Martinez imported 903,000 barrels of medium-to-heavy crude in February from Canada, the most recent data available from the Energy Information Administration show. The complex already processes some lighter crudes, like Bakken oil, along with heavier feedstock from California’s Central Valley, Singleton said.

Contra Costa County regulators are expected to prepare a report on the environmental impacts of the coker retirement, and the public will have a chance to comment on the plan during that process, she said.

Chevron Corp. (CVX)’s Richmond refinery, west of Martinez, is also applying to local regulators for a project that would change its crude slate. The plan would replace a hydrogen plant and increase capacity at the fluid catalytic cracker’s hydrotreater and sulfur-recovery system to run higher-sulfur oils.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net David Marino, Richard Stubbe

Derailment, Tribal lands, Washington State

Washington State: three derailments in three weeks

Repost from Indian Country Today Media Network

Grain Car Derailment Could Have Been Oil: Quinault Raise Alarm Again

ICTMN Staff  |  5/19/14

KXRO:  If this grain were oil…. The third train-car derailment in as many weeks has Pacific Northwest tribes that oppose oil-rail transport on edge.

It has happened again, this time not with oil but with grain.

However, the Quinault Nation pointed out on May 16, the derailment of a grain train in Grays Harbor County is all the affirmation needed to show that transporting something more hazardous, namely oil, in this manner has too much chance of ending badly.

“Another train derailment in Grays Harbor County? Three in three weeks? Rails ripped up, Cars tipped over. Cargo spilled out,” said Quinault Indian Nation President Fawn Sharp in a statement. “That cargo may have been grain this morning, but it might just as well have been oil, and that would have been disastrous.”

Sharp was alluding to a May 15 incident in which seven cars carrying grain tipped over when 11 cars on the train they were part of derailed. It was the third such occurrence in as many weeks on the network of tracks operated by Puget Sound & Pacific Railway in the Grays Harbor area, the Quinault statement said. This came right on the heels of two earlier derailments—one on April 29, when a grain car tipped over in Aberdeen, and another on May 9 in east Aberdeen, when some cars came off their tracks, the Quinault said.

The cargo was different, but the propensity of train cars to derail no matter what they were carrying says that transporting oil via this method is not safe, the Quinault said. Around the country and in Canada, derailments of trains bearing crude oil, much of it from oil sands and deemed especially flammable, have resulted in destruction and even death.

However, Puget Sound & Pacific Railway, a division of Genessee & Wyoming, said it was investigating the cause of the derailment.

“This series of minor derailments is a highly unusual, unacceptable occurrence and subject to a rigorous investigation,” company spokesperson Michael Williams, Genesee & Wyoming, told radio station KXRO on May 16. “The first two derailments were caused by localized failure of railroad ties that were saturated with moisture from recent heavy rains. Other locations experiencing this issue have been identified and are being corrected prior to receiving another train. The cause of yesterday’s derailment is still being determined.”

Several tribes in the Northwest are opposing railroad terminals in or near their territory that would handle oil and coal. Oil traffic in particular has troubled the Quinault.

“Now, one-two-three, it’s as easy as that. Any argument in favor of bringing Big Oil into our region has been knocked out cold,” said Sharp in the statement. “As we have consistently stated, our people and our treaty-protected natural resources are jeopardized by these oil shipments. This danger is real. We have invested millions of dollars to protect and restore the ecological integrity of our region, and we will not allow Big Oil to destroy it.”

Derailment, Petroleum Coke (Petcoke), Union Pacific Railroad, Valero Benicia Refinery

Two Petroleum Coke train cars derail in Benicia

Repost from The Benicia Herald
[Editor: Question: was the petcoke dust in these cars open to the wind when they derailed here in Benicia last Saturday?  What happens to the petcoke when one of these cars jostles up and then bangs down off the rails?  Anyone have a photo?  ANSWER TO THESE QUESTIONS FROM A LOCAL OBSERVER: “The cars that Valero uses to transport petcoke are ‘Hopper Cars’. They are closed top. They are not open gondala cars.  No, the product was not open to the wind.  They are completely covered and have a top fill with a door and 3 or 4 bottom discharge slide gates.”  – RS]

2 UP trains [sic] derail near Benicia refinery; no injuries or spills

May 19, 2014, The Benicia Herald

Two Union Pacific train cars came off the rails about 5:25 p.m. Saturday, Mark Davis, UP director of corporate relations and media, said Monday.

The train serves Valero Benicia Refinery, Davis said. The derailment happened near there.

“There was no petroleum coke spill,” said Sue Fisher Jones, the refinery’s public affairs manager.

Davis concurred. “There were no injuries or spills,” he said.

“Both hopper cars were loaded with coke and derailed upright with all wheels off the rail,” he said, describing the incident.

“The cars were placed back on the track Sunday morning, and the cause of the derailment is under investigation,” Davis said.

Bay Area, Benicia CA, Crude By Rail, Martinez CA, Pittsburg WesPac, Richmond, SafeBenicia.org, Shell Oil, Take Action, Tesoro, Valero Benicia Refinery

Martinez to Benicia: Oil Refinery Protest Draws About 100 Demonstrators

Repost from the East Bay Express
[Editor: Many thanks to the East Bay Express for excellent coverage of this colorful and important event (below).  Benicia old timers were heard to say that sleepy little Benicia has probably NEVER seen a protest demonstration like this.  Check out two facebook pages for great photos of the day: facebook.com/stopcrudebyrail AND facebook.com/events/220829548127114/?ref=22.  – RS]

East Bay Oil Refinery Protest Draws About 100 Demonstrators

Jean Tepperman —  Mon, May 19, 2014

Accompanied by a four-kayak flotilla and a fifth-generation Martinez resident on horseback, about one hundred environmental activists marched seven miles from Martinez to Benicia on Saturday to protest the local toxic pollution and global climate impact of Bay Area oil refineries. The march was spearheaded by a Bay Area group affiliated with Idle No More, an organization of Canadian First Nations people fighting development of the tar sands oil fields in Alberta and other environmentally destructive projects on their traditional lands.

refinery_walk1_5-17.jpeg

Kelly Johnson

Specific targets of the protest were proposed expansion projects at the Chevron (Richmond), Valero (Benicia), and Phillips 66 (Rodeo) refineries, a crude oil transportation terminal in Pittsburg planned by energy infrastructure company WesPac, and the major investment of Shell (Martinez) in the Canadian tar sands mines. The Saturday march was the second of four planned Refinery Corridor Healing Walks — the first, from Pittsburg to Martinez, was held in April, and future walks are planned for June and July, ending up at Chevron in Richmond. The series of walks aims to “connect the dots” to “bring awareness to the refinery communities, invite community members to get to know one another, and to show support for a just transition beyond fossil fuels,” according to the group’s website.

At a gathering at the Martinez Regional Shoreline before the march, a winner of this year’s Goldman environmental prize, South African Desmond D’Sa, described the high rates of leukemia, cancer, and asthma in his home town of Durban and the community’s struggles against Shell Oil there, urging the crowd to “fight them (refineries) wherever they are.” Penny Opal Plant, of the East Bay Idle No More group, said she only recently began to conceive of the refinery corridor as a total area suffering from the “immense devastation” caused by oil refineries.

Richmond residents have long protested pollution from Chevron, most recently the toxic explosion that sent 15,000 seeking medical treatment in August 2012. Benicia residents have also organized to oppose environmental hazards. In the last year, local groups have also formed in Pittsburg, Crockett-Rodeo, and Martinez to protest refinery expansion and transportation plans, including major increases in the amount of crude oil to be carried by rail through the Bay Area and beyond.

Describing the dangers of mining, refining, and transporting oil, and looking ahead to a future free from fossil fuel, Opal Plant said, “We are Mother Earth’s immune response awakening. We’re born at this time to do this thing.”

refinery_walk2_5-17.jpeg

Kelly Johnson

The group’s route first went through the Shell refinery, then over the bridge to Benicia, with a view of the Valero refinery there. From a hilltop vista point next to Carquinez Strait, Benicia activist Marilyn Bardet pointed out refineries and planned oil industry project sites, as well as the environmentally Suisun Marsh. Railroad tracks leading to the Valero refinery, she said, go right through the marsh. A spill of tar sands crude oil, she added, would be impossible to clean up because the oil is so heavy it would sink and cause irreparable damage.

The next Refinery Corridor Healing walk is scheduled to go from Benicia to the Phillips 66 refinery in Rodeo on June 14.