Bakken Crude, DOT-111, Federal Regulation (U.S.), Light sweet crude, Oil stabilization, Volatility

Transp. secretary says ‘risk level is higher’ for Bakken crude transport

Repost from Dakota Resource Council
[Editor: Fascinating quotes from a variety of industry reps and North Dakota elected representatives, all scrambling to protect commercial interests.  They would like everyone to stop using the word “Bakken” to describe Bakken crude.  Wow, that should help a lot!  Secretary Foxx dances around the subject while maintaining the DOT’s finding that Bakken crude is more volatile and a higher risk.  – RS]

Transportation secretary says ‘risk level is higher’ for Bakken crude transport

By: Mike Nowatzki, Forum News Service, August 8, 2014

BISMARCK – U.S. Transportation Secretary Anthony Foxx said Friday that crude oil from North Dakota’s Bakken shale formation isn’t being singled out from other crudes in proposed new tank car standards, but he didn’t say definitively whether the Department of Transportation believes it’s more volatile than other light, sweet crudes.“

We’re seeing some light ends in the Bakken crude that suggests a higher level of volatility than we would see in typical crude,” Foxx said in a press conference after Friday’s meeting in Bismarck on national energy policy. “Of course, typical crude is a wide range of different, other types of crude.”

Earlier this week, industry representatives and members of the North Dakota Industrial Commission, including Gov. Jack Dalrymple, questioned why an analysis by the DOT’s Pipeline and Hazardous Materials Safety Administration singled out Bakken crude as being more volatile and riskier to transport than other U.S. crudes. A North Dakota Petroleum Council-commissioned study released Monday yielded similar data as the PHMSA study but found Bakken crude to be consistent with other types of light, sweet crude.

Dalrymple had said he planned to ask Foxx to explain, and the governor dove right into the topic when he took to the podium before Foxx during Friday’s Quadrennial Energy Review meeting at Bismarck State College.

“We are curious why the recent studies from the federal government have referred specifically to Bakken crude oil,” Dalrymple said to the crowd of more than 200 people at the National Energy Center of Excellence. “We think it’s important to classify crude oil by measurable characteristics” like vapor pressure and boiling point, “and not simply classify it by geographic source.”

Foxx told the audience that increased oil production in North Dakota — which now tops 1 million barrels per day — has led to a lot of DOT work on crude transportation. That work includes its crude testing program, Operation Classification, “which has showed us that the particular crude oil here finds itself on the higher end of volatility compared to other crude oils.”

“In addition to that, what we’re also finding is that because the oil is being transported over long distances, and in some cases in high numbers of trains back to back to back, that the risk level is higher than we have seen in some other parts of the country,” he said.

Last month, the DOT proposed enhanced tank car standards that would phase out the use of older DOT-111 tank cars for shipment of most crude oil within two years, Foxx said.

“And let me say specifically that we don’t single out Bakken oil from other oil,” he said.

Foxx said the DOT will continue researching crude characteristics.

Dalrymple said “we need to stop going around in this little circle about the word ‘Bakken,’” and noted the Industrial Commission will call a hearing, probably within the next month, to seek input on conditioning Bakken crude before storage and loading to try to lower its volatility.

Rep. Kevin Cramer, R-N.D., said a House oversight hearing is set for Sept. 9 in Washington, D.C., to review the industry report and “see just where Bakken crude falls in terms of characteristics.”

U.S. Energy Secretary Ernest Moniz also attended Friday’s meeting, the ninth of 11 meetings being held to help the Obama administration develop a national policy for energy infrastructure.

The administration is committed to an all-of-the-above energy strategy, and “North Dakota exemplifies that in so many ways,” Moniz said, noting he’d be driving by a wind-turbine farm on his way to tour the Great Plains Synfuels coal gasification plant near Beulah later in the day.

Moniz said it’s somewhat ironic that the nation is in an era of “energy plenty,” yet it’s developed so rapidly that infrastructure hasn’t had time to adjust, citing oil-by-rail challenges as one example.

U.S. Sen. John Hoeven, R-N.D., who sits on the Senate Committee on Energy and Natural Resources, said companies need regulatory certainty if they’re to invest in infrastructure such as pipelines and rail. He said U.S. oil production since 2009 is up 60 percent on private lands but down 7 percent on public lands.

“We’ve got to cut through these bottlenecks, the red tape,” he said, citing his proposed legislation to simplify regulations and give states primary responsibility to manage hydraulic fracturing, or fracking.

But among those who submitted public comments Friday were Dakota Resource Council members who called for a slowdown of oil permitting to allow natural gas gathering infrastructure to catch up and reduce flaring. North Dakota burned off 28 percent of its natural gas produced in May, according to a DOE memo.

Linda Weiss of Belfield, who serves as DRC board chairwoman and can see a gas flare about a quarter-mile from her home, said members also want more consideration given to landowners and planning to determine the best routes for pipelines and other infrastructure.

“They usually pit landowners against each other. They don’t do their due diligence to find the best route,” she said.

The volunteer ambulance service member also said more training is needed for emergency responders.

“What if something like Casselton or Quebec (happens)?” she said, referring to the derailment and explosion of train cars carrying Bakken crude that killed 47 people on July 6, 2013, in Lac-Megantic, Quebec, and the train derailment Dec. 30 near Casselton, N.D., that produced spectacular fireballs, but no injuries. “There is no way any of these small towns are prepared.”

Air Quality, Bakken Crude, Crude By Rail, Draft EIR, Noise pollution, Positive Train Control, Risk Assessment, Take Action, Tar sands crude, Valero Benicia Refinery, Volatile gases

Lynne Nittler of Davis, CA: Take Action!

Repost from The Davis Enterprise

Exercise the power of public comment

by Lynne Nittler, August 10, 2014
oil train
Oil tanker cars travel by rail through Davis on a recent evening. Valero oil refinery in Benicia wants to expand its oil shipments to 100 tank cars per day. Jean Jackman/Courtesy photo

The story of crude-by-rail in California is not a done deal. As new developments unfold almost daily in this remarkable drama, it is clear that public input can make a significant impact.

For example, last January, fierce community opposition — plus a letter from state Attorney General Kamala Harris urging further scrutiny on air quality and the risk of accidental spills — led city leaders in Pittsburg to reopen the public comment period on its draft environmental documents.

The WesPac Petroleum project had called for an average of 242,000 barrels of crude — the equivalent of 3.5 trains per day — to be unloaded daily and stored in 16 tanks before being piped to the five Bay Area refineries. Now, it appears WesPac may never reapply. An alert public can bring about change.

Valero in Benicia is a long way from giving up on the rail terminal that will allow it to import 100 tank cars of crude by rail daily, most likely from the tar sands of Alberta, Canada, and the Bakken Crude shale of North Dakota. These two extreme forms of crude — Bakken crude is highly volatile and proven explosive and tar sands bitumen is toxic and impossible to clean up in a spill (Kalamazoo spill, July 2010) — are already being processed in some Bay Area refineries.

The California Energy Commission predicts within two years that California will receive 25 percent of its crude by rail, mostly from these two extreme crudes that emergency workers currently are not prepared to deal with in the event of a spill or accident. For the Sacramento region, that will mean five to six trains of 100 cars per day by the end of 2016!

Your input now may make a significant difference. The draft environmental impact report for the Valero proposal is open for public review until Sept. 15. A printed copy is at the Stephens Branch Library, 315 E. 14th St. in Davis, and is available online at www.benindy.wpengine.com. Every letter submitted becomes part of the public record and must be addressed in the final EIR.

Frankly, the draft EIR focuses on impacts to Benicia, and just glances at uprail communities like Davis. But two 50-car trains coming across the Yolo Causeway and the protected Yolo Basin Wildlife Area; passing high-tech businesses along Second Street; rolling into town through residential neighborhoods, where the vibrations will be felt from each heavy car; following the unusual and therefore dangerous 10 mph crossover just before the train station; passing through the train station, putting the entire downtown within the blast zone; and skirting the edge of UC Davis, including the Mondavi Center for the Performing Arts; puts many people at serious risk.

If you have concerns such as whether the tank cars are safe enough, whether the volatility of the Bakken crude should be reduced before it is loaded into tank cars, who is liable in the event of an accident, whether the trains will be equipped with positive train control to improve braking, how Valero plans to mitigate the increased air and noise pollution, how Valero can claim that accidents happen only once in 111 years, etc., then you can help.

While our city of Davis, Yolo County, Sacramento, Roseville, Fairfield, the Sacramento Area Council of Governments and the Sierra Club Yolano Group are writing their own responses to the Valero draft EIR, letters from private citizens are equally powerful.

Public workshops are planned in August and September to help residents craft their letters. They workshops will provide background on the oil train situation, discuss the California Environmental Quality Act and EIR process and offer helpful resource materials. Participants will find topics, gather evidence, write their letters and then share drafts for feedback.

Workshops are planned from 10 a.m. to noon Saturday, Aug. 9; 7 to 9 p.m. Thursday, Aug. 21; and 2 to 4 p.m. Sunday, Sept. 7. All will take place in the Blanchard Room at the Stephens Branch Library, 315 E. 14th St. in Davis. The room is accessible to people with disabilities.

The draft EIR and mailing directions are posted at www.benindy.wpengine.com. For more information, contact me at lnittler@sbcgloball.net or 530-756-8110.

Bring a friend! Every letter adds to the impact!

— Lynne Nittler is a Davis resident.

Emergency Readiness & Response, Insurance Industry, Tank car design, Tank car retrofit

Ca-ching: Oil-by-rail surge to benefit three commercial sectors

Repost from Benzinga
[Editor: Quick & dirty on the 3 sectors: Freight Car Designers And Refitters, Insurance Providers, and Emergency Services And Safety Training.  UNLESS … if we stop crude by rail in its tracks, the only CA-CHING will be in the alternative energy fields.  – RS] 

3 Sectors Expected To Benefit From The Oil-By-Rail Surge

Bruce Kennedy, Benzinga Staff Writer, August 11, 2014

It’s been just over a year since a freight train carrying crude oil from the Bakken shale fields in North Dakota derailed and exploded in a Quebec town near the U.S.-Canadian border, killing 47 people.

That accident, along with several others in its wake, drew attention to the enormous increase in shale oil now being transported from North Dakota and Canada by rail – and the vulnerabilities of that form of transport.

“More crude oil is being shipped by rail than ever before, with much of it being transported out of North Dakota’s Bakken Shale Formation,” Department of Transportation Secretary Anthony Fox pointed out in a press conference last month. “In 2008, producers shipped 9,500 rail-carloads of oil in the U.S.; by just last year, that number skyrocketed to 415,000 rail-carloads — a jump of more than 4,300 percent.”

At that same press conference, Fox announced a rule-making proposal to improve the safe transportation of large quantities of flammable materials by rail – crude oil and ethanol in particular.

The increase in oil being transported by rail, as well as the new safety measures, might also be a windfall for companies in some related fields.

Freight Car Designers And Refitters

The proposed new safety rules for oil freight cars means a potential bonanza for firms like The Greenbrier Companies (NYSE: GBX). The Oregon-based group is a leading manufacturer and marketer of railroad freight car equipment in both North America and Europe.

Along with retro-fitting existing oil rail cars, Greenbrier is also designing a new genreration “Tank Car of the Future,”  with a thicker tank and bigger welds to ensure greater safety.

The new design, according to the Rigzone oil and gas industry web site, is “intended to meet anticipated new industry and government standards for tank cars transporting certain hazardous material.”

Insurance Providers

The Wall Street Journal reports that most, big North American railroads usually carry about $1.5 billion in liability insurance – but notes that accidents like last year’s deadly derailment and explosion in Lac-Mégantic, Quebec, can end up costing billions of dollars more in cost, especially if that accident happens in a populated area.

“Even if it happens outside of town, the massive damage to property and the environment — you’re stymied when you have these kind of crude oil fires burning hot and big for days,” Karen Darch, president of Barrington, Illinois, told the newspaper.

This could lead to an increase in the need for insurance.

“With experts predicting that oil spill derailments may increase in frequency over the next decade, the insurance industry must be prepared to address this new coverage threat,” says the law industry tracker web site Law360 earlier this year, “including the coverage issues and potential exposure which may arise from these disasters.”

Emergency Services And Safety Training

Earlier this year, Minnesota’s state legislature passed an oil transport law. The measure, reportedly worth more than $6 million, took fees generated in part from oil and railroad companies and put that funding towards tanker and pipeline disaster training, as well as more state transportation safety inspectors.

As former National Transportation Safety Board Chairwoman Deborah Hersman pointed out in a letter written this past January to the head of the Federal Railroad Administration, there is no mandate for the railroads to come up with comprehensive disaster response plans for oil train derailments

This means the rail carriers “have effectively placed the burden of remediating the environmental consequences of an accident on local communities along their routes,” the letter said.

According to the Association of American Railroads, the industry is providing $5 million to develop and fund specialized training for first responders handling a crude-by-rail accident, as well as developing “an inventory of emergency response resources and equipment for responding to the release of large amounts of crude oil along routes over which trains with 20 or more cars of crude oil operate.”

For safe and healthy communities…