All posts by Roger Straw

Editor, owner, publisher of The Benicia Independent
California Senate Bill 32 (SB32), California Senate Bill 350 (SB350), Climate Change, Oil industry lobby, State regulation

SF CHRONICLE EDITORIAL: California should lead way, again, on climate

Repost from the San Francisco Chronicle, Sunday Editorial

California should lead way, again, on climate

San Francisco Chronicle, August 28, 2015 5:53pm

By any clean-and-green measure, California zooms past the rest of the nation, requiring cleaner fuels, more alternative energy and cars that use less gas. As these policies have taken root, the state economy has strengthened, creating more jobs in a forward-looking marketplace.

The connection should be clear. California is not only plotting a new energy course, but it’s also prospering. The state law that set emission goals nearly a decade ago hasn’t harmed livelihoods or sent business fleeing.

This experience should teach Sacramento an important lesson as lawmakers face a decision on doing more about climate change. The state Legislature is on the verge of approving a sweeping measure, SB350, that would cut gas and diesel use by half, boost renewable sources of electricity from a third to 50 percent, and double energy efficiency in buildings, all within 15 years. A second measure, SB32, would widen a state cap-and-trade program that cuts other sources of emissions blamed for rising global temperatures.

These targets will put California far beyond President Obama’s plans to curb pollution from power plants and boost solar, wind and biofuels in the nation’s mix of energy sources. But SB350, which has passed the state Senate, could falter in the Assembly where more moderate, business-friendly Democrats hold power.

The forces are building to block the bill, sponsored by Senate President Pro Tem Kevin de León, a Los Angeles Democrat. The oil industry, a steady source of campaign funds, is putting pressure on Assembly Democrats to stop the bill or water it down. These foes predict gas rationing, extra fees and arbitrary directives from state bureaucrats if the law kicks in.

Walking away from the bill would be a mistake, a step backward that will deny California cleaner air, greener energy and an opportunity to lead a timid nation on an essential issue. Wavering lawmakers should consider a recent poll showing that two-thirds of the state believes a deepening drought is linked to climate change and supports Gov. Jerry Brown’s directives that match up with SB350.

Along with California’s welcoming politics on the topic, there is direct experience to consider. Tech breakthroughs ranging from cleaner-burning engines to cheaper solar panels are helping this state move forward. Growing numbers of high-mileage cars, including electric and hybrid models, are expected to provide nearly half of the gas savings needed to hit the 50 percent drop by 2030.

There are reasons to be cautious. Energy improvements often come with steep startup costs such as solar panels on the roof or the purchase of a gas-thrifty car. Low-income residents will need a break in tapping technology available only to well-off consumers. State regulators should be flexible in designing new programs to advance conservation.

But California has shown it can adapt and thrive as it heads in this direction. Climate change is a provable and genuine threat to the state’s future. It’s time to adopt genuine changes that guide the state in the right direction and serve as a model for the rest of the country.

How far should California go?
A sweeping bill would change the way residents drive, live and work. Here are the major ingredients of SB350, which has passed the state Senate and is up for a vote in the Assembly:

On the road: Cut petroleum use in half by 2030. Tailpipe emissions are a top source of carbon dioxide, the main factor behind climate change. Oil companies are lobbying heavily against the limit, saying it will bring angry lines at gas pumps in a car-crazy state. Higher-mileage cars including electric and hybrids will be key in making this directive work.

On the grid: Half of the state’s electricity would come from renewables, up from a one-third level in five years. Utilities have qualms but are not actively opposed.

In the home: Doubling the efficiency in buildings to conserve heating and cooling costs. No major opposition.

Bakken Crude, Crude By Rail, Oil Industry, Oil prices, Oil refineries

Does zero Bakken crude for Irving Oil indicate a trend?

Repost from Railway Age
[Reference:  see the 8/20/15 Wall Street Journal article, Canada’s Largest Refinery Shifts from Bakken Shale Oil to Brent Crudes.  – RS]

Does zero Bakken crude for Irving Oil indicate a trend?

By  William C. Vantuono, Editor-in-Chief, August 28, 2015
Irving Oil Ltd. Saint John, N.B. refinery
Irving Oil Ltd. Saint John, N.B. refinery

Irving Oil Ltd., operator of Canada’s largest crude oil refinery, has stopped importing crude oil sourced from the Bakken shale formation in North Dakota and shipped by rail in favor of cheaper crudes from such producers as OPEC, “reflecting a shift in crude costs affecting East Coast refiners during a global slump in oil prices,” the Wall Street Journal recently reported.

The 320,000-barrel-a-day refinery in Saint John, N.B., one of the biggest by volume in North America, had been receiving 100,000 barrels a day by rail, a high reached two years ago that was only temporarily affected by the Lac Mégantic disaster. (The Montreal, Maine & Atlantic crude oil train that derailed on July 6, 2013, claiming 47 lives, was bound for the refinery). Today, CBR shipments the refinery are zero, a move “that reflects shifting economics in the energy industry even as the price of oil—including Bakken crude—has slumped to six-year lows,” said the WSJ. “About 90% of the crude oil Irving currently buys is shipped by sea from such producers as Saudi Arabia and those in western Africa, with the remainder coming by rail from such western Canadian oil-sands operators as Syncrude Canada Ltd. and Royal Dutch Shell PLC. A year ago, Bakken crude made up about 25% of Irving’s feedstock and in 2013 it supplied nearly one-third of its procurement volume, or about 100,000 barrels a day. ‘The Bakken price has gone up’ relative to other crudes when CBR costs are factored in,’ [an Irving Oil executive] said.”

“A once-yawning gap, between the cost of oil produced in North America and overseas crudes priced at the Brent global benchmark, has narrowed since 2013,” the WSJ noted. “Refiners on North America’s east coast can now import crude shipped by sea for less than the cost of shipping it by rail from shale oil producers in North Dakota and elsewhere in the U.S.”

Production of U.S. shale oil, especially that from the Bakken, led to CBR shipments increasing exponentially due to a lack of pipelines. CBR is more expensive than by shipping by pipeline and even by ship, and fewer refiners are willing to pay a premium for CBR. <p< Whether Irving Oil’s decision to abandon Bakken crude for a single refinery reflects a broader trend that will affect CBR movements remains to be seen. Two other refiners have followed suit, but the situation may not be permanent.

“Refiners PBF Energy Inc. and Phillips 66 both said they increased procurement of overseas crudes at the expense of CBR in the second quarter, though they signaled it is unclear if that will continue throughout the rest of the year,” the WSJ reported. “‘Our ability to source sovereign waterborne crudes was far more economic to the East Coast facilities, and that’s what we did,’ PBF Energy CEO Tom Nimbley said in late July. Phillips 66 CEO and Chairman Greg Garland told investors last month, ‘We actually set [crude-by-rail] cars on the siding. We brought imported crudes in the system.’ But, he added, ‘I’d say given where our expectations are for the third quarter, I’d say cars are coming off the sidings, and we’re going to import less crude.’”

CBR traffic has dropped substantially compared to last year, “reflecting both the worsening economics of CBR and better pipeline access to refineries on the Gulf of Mexico,” the WSJ noted. According to Association of American Railroads figures, U.S. Class I railroads originated 111,068 carloads of crude oil in the second quarter of 2015, down 2,201 carloads from the first quarter and some 21,000 fewer carloads than the peak in 2014’s third quarter.

 

California Regulation, California Senate Bill 32 (SB32), California Senate Bill 350 (SB350), Climate Change

Major Climate Change Bills PASS Critical Committee Vote in California Legislature, ACTION needed!

From a League of Conservation Voters email Alert
[Editor:  Here’s an excellent Fact Sheet on SB350: SB 350: Golden State Standards 50-50-50, by Senators Kevin de León and Mark Leno.  – RS]

BREAKING NEWS: Major Climate Change Bills PASS Critical Committee Vote in California Legislature

August 28, 2015, 11:09am PDT
Send your message!
Send a message! – click here

…two major climate change bills just passed critical committee votes in the California Assembly: Senate Bills 32 and 350. Today’s victory in the Appropriations Committee is a win for Californians like you over the profit-driven interests of Big Oil, but the battle for these bills isn’t over yet.

Only 2 weeks are left in this year’s legislative session, and both SB 32 and SB 350 face serious challenges that must be overcome before time runs out – or they won’t make it to the governor’s desk this year. Take advantage of the momentum from today’s victory and speak out now! Tell lawmakers: We can’t afford to let another year slip by without bold climate action in California! >>

California League of Conservation Voters

Bakken Crude, Crude By Rail, Derailment, Emergency Readiness & Response, Federal Regulation (U.S.), Fire, Funding for emergency response, Hazmat notification, Massive increase in crude-by-rail, Per-barrel tax, Public safety funding, Rail inspection, Rail Safety, Spill, State regulation, Track maintenance, Volatility

States Step Up Scrutiny of Oil Train Shipments

Repost from GOVERNING The States and Localities

States Step Up Scrutiny of Oil Train Shipments

Some states are looking to prevent more derailments and spills, but the freight industry doesn’t want more regulation.
 By Daniel C. Vock | August 26, 2015
In 2014, several CSX tanker cars carrying crude oil derailed and caught fire along the James River near downtown Lynchburg, Va. (AP/Steve Helber)

When it comes to regulating railroads, states usually let the federal government determine policy. But mounting concerns about the safety of oil trains are making states bolder. In recent months, Oregon, Pennsylvania and Washington state have taken steps to strengthen oversight of the freight rail industry.

The three join several other states — mostly led by Democrats — in policing oil shipments through inspection, regulation and even lawsuits. Washington, for example, applied a 4-cent-per-barrel tax on oil moved by trains to help pay for clean-ups of potential spills. The new law also requires freight rail companies to notify local emergency personnel when oil trains would pass through their communities.

“This means that at a time when the number of oil trains running through Washington is skyrocketing, oil companies will be held accountable for playing a part in preventing and responding to spills,” said Democratic Gov. Jay Inslee when signing the measure this spring.

The flurry of state activity comes in response to a huge surge in the amount of oil transported by rail in the last few years. Oil from the Bakken oil fields in North Dakota and nearby states must travel by train to refineries and ports because there are few pipelines or refineries on the Great Plains. The type of oil found in North Dakota is more volatile — that is, more likely to catch on fire — than most varieties of crude.

Public concerns about the safety of trains carrying oil have increased with the derailments in places like Galena, Ill.; Mt. Carbon, W. Va.; Aliceville, Ala.; Lynchburg, Va.; Casselton, N.D.; and especially Lac-Megantic, Quebec, where 47 people died in 2013.

Federal regulators responded to these incidents by requiring railroads to upgrade their oil train cars, to double check safety equipment on unattended trains, and to tell states when and where oil trains would be passing through their borders. This last requirement was hard won. This summer, the Federal Railroad Administration tried to encourage states to sign nondisclosure agreements with railroads about the location of oil trains. After several states balked, the agency relented.

California, Louisiana, New Jersey, Ohio and Oklahoma have all signed nondisclosure agreements, while Idaho, Illinois, Montana, North Dakota, Washington and Wisconsin have refused to do so, according to the Reporters Committee for Freedom of the Press.

A Maryland judge earlier this month ruled against two rail carriers, Norfolk Southern and CSX, that wanted to block the state’s environmental agency from releasing details of their oil shipments. The railroads have until early next month to decide whether to appeal.

“The ruling isn’t the first time railroads have lost their bid to keep the oil train reports secret,” wrote reporter Curtis Tate of McClatchy, one of the news organizations that requested the records, “but it is the first court decision recognizing the public’s right to see them.”

Many states want this information so that fire departments and other emergency personnel can prepare for a potential derailment. California passed a law last year imposing clean-up fees on oil shipped by rail. The railroad industry challenged the law in court, but a judge ruled this summer that the lawsuit was premature. Minnesota passed a similar law last year, and New York added rail inspectors to cope with the increase in oil train traffic. A 1990 federal law lets states pass their own rules to prepare for oil spills, as long as those rules are at least as rigorous as federal regulations.

In Pennsylvania, which handles 60 to 70 oil trains a week, Democratic Gov. Tom Wolf asked a University of Delaware expert to help to improve safety of oil trains traveling through the state. The professor, Allan Zarembski, produced 27 recommendations for the state and the railroads. He called on the state to improve its inspection processes of railroad tracks, particularly for tracks leading into rail yards, side tracks and refineries that often handle oil trains. The professor also encouraged the state to coordinate emergency response work with the railroads and local communities.

Zarembski’s suggestions for the railroads focused on how they should test for faulty tracks, wheel bearings and axles. Most major derailments in recent years were caused by faulty track or broken equipment, not human error, he noted in his report.