All posts by Roger Straw

Editor, owner, publisher of The Benicia Independent

“Uprail” government agencies critical of Valero Benicia environmental report

Repost from the Fairfield Daily Republic

Safety still a primary concern with Valero rail transport plan

By Kevin W. Green, November 07, 2015
The Valero oil refinery operates, Friday, Sept. 25, 2015, in Benicia.  (Steve Reczkowski/Daily Republic file)
The Valero oil refinery operates, Friday, Sept. 25, 2015, in Benicia. (Steve Reczkowski/Daily Republic file)

FAIRFIELD — Most of those who provided formal comments on the revised draft environmental impact report for the Valero crude-by-rail project in Benicia focused on a need for increased safety and possible mitigation measures.

The city of Benicia Planning Department received plenty of input leading up to last week’s deadline for submitting written comments on the revised report.

The proposed project would allow Valero to transport crude oil to its Benicia refinery on two 50-car freight trains daily on Union Pacific tracks that come right through downtown Davis on their way to Benicia. The trains also pass through Dixon, Fairfield and Suisun City.

The rail shipments would replace up to 70,000 barrels per day of crude oil currently transported to the refinery by ship, according to city documents. The Valero refinery would continue to receive crude by pipeline, the city said.

Among the written comments submitted on the revised impact report was an eight-page response from the Sacramento Area Council of Governments. The agency responded on behalf of the 22 cities and six counties in its jurisdiction, including the city of Davis and Yolo County.

“Our earlier letter expressed grave concern that the DEIR concluded that crude oil shipments by rail pose no ‘significant hazard’ to our communities, and we urged the city of Benicia to revise the DEIR to fully inform decision-makers and the public of the potential risks of the project,” SACOG said in its remarks.

The agency’s response included a list of eight measures its board of directors indicated that, at a minimum, should be followed.

Those directives include advance notification to county and city emergency operations offices of all crude oil shipments; limits on storage of crude oil tank cars in urbanized areas of any size; and appropriate security for all shipments.

Other directives outlined need for support, including full-cost funding for training and outfitting emergency response crews; and use of freight cars with electronically controlled pneumatic brakes, rollover protection and other features that mitigate what the agency believes are the risks associated with crude oil shipments.

Finally, the agency calls for the implementation of Positive Train Control to prioritize areas with crude oil shipments.

Solano County Resource Management Director Bill Emlen, a former Davis city manager, noted in his response that he had no specific comment on the revised report, but that the county stands behind its initial remarks about the original draft report.

In those remarks, dated Sept. 8, 2014, Emlen said the county wanted more done to address potential derailments.

The original draft EIR admitted the project “could pose significant hazard to the public or the environment,” but minimized the chances of that happening.

“Although the consequences of such a release are potentially severe, the likelihood of such a release is very low,” the report said.

Emlen disagreed that the accident risks associated with the crude-by-rail proposal are “less than significant” without mitigation.

Valero plans to use a type of tank car designated as CPC-1232 to transport oil between Roseville and Benicia and there will be a 40 mph speed limit through federally designated “high-threat urban areas,” including cities along the route, according to the draft report.

Emlen said it appears Valero’s use of the CPC-1232 tank cars is voluntary, rather than mandatory. He also pointed out that the federal designation for high-threat urban areas extends only 10 miles east of Vallejo and 10 miles west of Sacramento, which leaves out most of Solano County.

Emlen cited a derailment and spill that took place in Virginia with a train using CPC-1232 tank cars and traveling 23 mph.

“Therefore, the use of CPC-1232 tank cars at low speeds does not alone mitigate the potential impact from a train derailment,” he said.

Other cities that submitted a written response on the revised draft included Davis, Albany, Gridley and Briggs. Other counties that responded included Yolo, Placer and Nevada counties.

An original draft EIR was issued for the project in June 2014. Benicia said it issued the revised draft EIR in response to requests made in that original report. The city released the revised document Aug. 31 for a 45-day review period. It later extended the deadline for submitting written comments from Oct. 16 to Oct. 30.

The Benicia Planning Commission also gathered public input on the revised document at a Sept. 29 meeting.

The Valero project involves the installation of a new railcar unloading rack, rail track spurs, pumps, pipeline and associated infrastructure at the refinery, according to a city report. The crude would originate at sites in North America.

Union Pacific Railroad would transport it using existing rail lines to Roseville, and from there to the refinery, the city said.

Exxon Mobil Investigated for Possible Climate Change Lies by New York Attorney General

Repost from the New York Times
[Editor:  See also the NYT ‘s 11/6 follow-up story, “More Oil Companies Could Join Exxon Mobil as Focus of Climate Investigations.”  – RS]

Exxon Mobil Investigated for Possible Climate Change Lies by New York Attorney General

By Justin Gillis and Cllifford Krauss, November 5, 2015
An Exxon Mobil refinery in Los Angeles, Calif. The New York attorney general is investigating the oil and gas company. Credit T. Fallon / Bloomberg, via Getty Images

The New York attorney general has begun an investigation of Exxon Mobil to determine whether the company lied to the public about the risks of climate change or to investors about how such risks might hurt the oil business.

According to people with knowledge of the investigation, Attorney General Eric T. Schneiderman issued a subpoena Wednesday evening to Exxon Mobil, demanding extensive financial records, emails and other documents.

The investigation focuses on whether statements the company made to investors about climate risks as recently as this year were consistent with the company’s own long-running scientific research.

The people said the inquiry would include a period of at least a decade during which Exxon Mobil funded outside groups that sought to undermine climate science, even as its in-house scientists were outlining the potential consequences — and uncertainties — to company executives.

Continue reading Exxon Mobil Investigated for Possible Climate Change Lies by New York Attorney General

Bakken oil companies declare bankruptcy

Repost from the Bismarck Tribune
[Editor:  For an update, see also Bakken.com’s “Magnum Hunter warns of bankruptcy for gas companies” on 11/12/2015.  – RS]

Bakken oil companies declare bankruptcy

By Jessica Holdman, October 26, 2015 5:45 pm

As crude oil prices hang low, about $43 per barrel Monday, some North Dakota operators are trying to divest interests in the Bakken.

Two debt-heavy operators in the state, Tulsa, Okla.-based Samson Resources and Denver-based American Eagle Energy, filed for Chapter 11 bankruptcy, planning to sell off Bakken assets to pay back what they owe.

Samson, with production acres in the Three Forks and Middle Bakken plays, has not yet succeeded in selling off acreage, spokesman Brian Maddox said.

“We have not currently entered into agreements to divest other larger packages, including our Bakken, Wamsutter, San Juan and non-core Mid-Con assets, because we perceived the value offered was less than the value of retaining those properties when economic factors and the impact to our credit position were considered,” the company said in first-quarter 2015 filings with the U.S. Securities and Exchange Commission.

“Even if we are successful at reducing our costs and increasing our liquidity through asset sales, we do not expect to have sufficient liquidity to satisfy our debt service obligations, meet other financial obligations and comply with restrictive covenants contained in our various credit facilities.”

The company is the most recent operator in the state to declare bankruptcy, filing in mid-September in hopes of clearing more than $3.25 billion in debt.

As part of the company’s restructuring agreement, second lien lenders own all of the equity of the reorganized company in exchange for providing at least $450 million of new capital to increase liquidity.

“The steps we are taking will allow our company to maximize future opportunities and compete more effectively with significantly less debt on our balance sheet,” Randy Limbacher, CEO of Samson Resources, said in a statement. “We fully expect to operate our business as usual throughout this process and to emerge as a financially stronger company.”

According to 2012 reports, Samson had 400,000 acres in the Bakken. Later that year, it would sell 116,000 acres, primarily in Divide and Williams counties, to Continental Resources for $650 million. No other sale of assets has been reported by the company since then.

And no substantial plans have been announced as to the fate of what does remain, Maddox said.

“We are planning on a Dec. 3 emergence date,” he said of bankruptcy proceedings.

Between June and late September, 10 oil and gas companies have filed for bankruptcy — 19 have filed in the past year since mid-October.

American Eagle Energy, which buys and develops oil wells in the Bakken, was the fourth, filing in mid-May.

American Eagle missed an interest payment on its debt. It listed assets of $222 million and liabilities of $215 million at the time of filing.

American Eagle held 54,262 acres in the Bakken in late 2014. In early 2015, it sold 1,185 leasehold acres in Divide County for $9.5 million.

American Eagle could not be reached for comment.

Outside of those companies filing for bankruptcy, Occidental Petroleum Corp. agreed to sell all of its North Dakota shale oil acreage and assets to private equity fund Lime Rock Resources for $500 million, according to the Reuters news agency. The sale includes 300,000 acres and a recently built, 21,000-square-foot regional office building in Dickinson.

Locally based MDU Resources Corp. is also trying to sell off its oil and gas exploration subsidiary, Fidelity Exploration and Production Co., but has not announced a deal to date.

MDU is scheduled to report its most recent quarterly results next week.

 

LATEST DERAILMENT: Crude oil train derails in Saint John, New Brunswick

Repost from CBC News

Minor train derailment in east Saint John leaves some uneasy

Several cars carrying crude oil slipped off the tracks but there was no spill

CBC News, Nov 06, 2015 6:17 PM AT
A minor train derailment in east Saint John on Thursday has some people concerned about what could happen should a major accident occur.
A minor train derailment in east Saint John on Thursday has some people concerned about what could happen should a major accident occur. (Timothy Pennell/CBC)

NB Southern Railway was still on scene in east Saint John on Friday, making repairs after a minor derailment.

On Thursday, three cars loaded with crude oil slipped off the tracks around 10:20 a.m.

While there was no spill, it did have some thinking about the potential for damage.

hi-train-derailment-saint-john
A piece of broken track at the site of a minor train derailment in east Saint John. (Timothy Pennell/CBC)

Area resident Chris Likourgiotus said, “I think it would scare anybody having any kind of leak close to any residential or business anywhere in Canada.

“I think this is one reason why it might not be a bad idea to have Canada East pipeline.”

For some businesses next to the tracks, news of the derailment was disconcerting.

Todd Fougere owns a graphics and signs business.

“You know, you do see them time to time come through and put some new boards under and that sort of thing.   But again, I don’t know the rules and regulations so you just hope somebody is looking out,” he said.

hi-Sharon-Murphy
Environmentalist Sharon Murphy says she’s concerned about crude being stored in the middle of the city. (CBC)

However, environmentalist Sharon Murphy says trust shouldn’t have to be earned, especially since there was no consultation over storing so much crude oil in the middle of the city.

“Heaven forbid there’s an explosion, when that happens the citizens don’t have a clue what to do,” she said.

“We are working and living directly beside this very dangerous area in the city, and never were we consulted.”

NB Southern Railway says it will conduct its own investigation into the cause of the derailment.

Because this isn’t a federal line, the Transportation Safety Board will not be conducting an investigation.

The province says the severity of the derailment does not warrant its own investigation.