Kinder Morgan halts shipment of crude in Bay Area

Repost from The Martinez News-Gazette
[Editor: See also KPIX: Bay Area Crude Oil-By-Rail Shipments Halted After Price Per Barrel Drops Sharply.  – RS]

Kinder Morgan halts shipment of crude

Rick Jones | February 26, 2015

Cost-based suspension safer, but temporary

The falling price of oil has made Bay Area railways and highways a little more safe for the time being.

Kinder Morgan has halted shipments of volatile Bakken crude to its oil transfer station in Richmond. Kinder Morgan had been receiving shipments of Bakken crude oil from North Dakota several times a month on 100-car trains. One such train travels through Martinez along Highway 4. Trucks would then send that Bakken crude to Tesoro.

However, last November those shipments stopped as the freefall drop in the price of a barrel of oil made transporting Bakken crude by rail economically unviable.

“There is a cost of transporting crude. When demand is reduced and price will be reduced, it becomes not economically viable to ship (by rail),” said Martinez Councilmember Mark Ross.

Ross, a member of the Bay Area Air Quality Management District, said the cost of transporting the light Bakken crude is approximately $12 a barrel.

“We have to find a way to reduce demand for oil,” Ross said. “And when we do that, other good things happen. Cleaner air, less dangerous trains coming through our communities.”

The last train carrying Bakken crude oil passed through the Bay Area on Nov. 22. The oil was transported via rail from Stockton to Richmond.

A train carrying more than 3 million gallons of crude oil from North Dakota’s Bakken shale derailed in a snowstorm in an unincorporated area near Mount Carbon, West Virginia, on Feb. 16, shooting flames into the sky and evacuating hundreds of nearby residents from their homes.

The train, which was carrying crude to an oil depot in Yorktown, Virginia, derailed in a small town 33 miles southeast of Charleston, causing 20 tank cars to catch fire. All the oil tank cars on the 109-car train were CPC 1232 models, CSX Corp. said.

The CPC 1232 is the newer, supposedly tougher version of the DOT-111 car manufactured before 2011, which was faulted by regulators and operators for a number of years. U.S. and Canadian authorities, under pressure to address a spate of fiery accidents, are seeking to phase out the older models. The U.S. Transportation Department has recommended that even these later models be updated with improved braking systems and thicker hulls.

The fires, which destroyed one house and resulted in the evacuation of two nearby towns, were left to burn out, CSX said in a statement. No serious injuries were reported.