New Hampshire and Minnesota pass new laws on emergency response

Repost from Inside Climate News

2 States Beef Up Oil-by-Rail and Pipeline Safety After String of Accidents

Other states that have surging oil-by-rail traffic and pipelines carrying tar sands are expected to consider similar safety requirements.
By Elizabeth Douglass, InsideClimate News  |  Jun 16, 2014
Oil tankers on fire at the train derailment site in Lac-Megantic, Quebec, on July 10, 2013. Concern among the public and state lawmakers over the safety of oil transport has been building with each major oil pipeline spill and train derailment. Credit: Sûreté du Québec

Alarmed by a string of explosive and disastrous oil spills, two states recently passed laws aimed at forcing rail and pipeline companies to abide by more rigorous emergency response measures instead of relying on the federal government.

The moves by New Hampshire and Minnesota reflect a desire for more control over in-state hazards, as well as mounting frustration over gaps in federal law involving oil pipelines and oil trains, superficial federal reviews and the secrecy surrounding spill response plans submitted to U.S. regulators.

“At this point, lots of states are looking at oil-by-rail and thinking about how they would respond—whether they have the resources, whether their first responders have the resources, and whether their laws are sufficient to protect their communities,” said Rebecca Craven, program director at the Pipeline Safety Trust, a safety advocacy group based in Washington State.

It’s the same with pipelines. “States are becoming more aware of new pipelines being proposed in their states, or expansion of existing pipelines, or changes in [a pipeline’s] products,” Craven said. “As a result of public concerns being raised, they’re starting to respond by undertaking state-level spill response plans. I think it could be a trend.”

Under New Hampshire’s law, which the governor is expected to sign, the state gains the power to establish its own, more stringent requirements for inland pipeline spill response plans and equipment. Minnesota’s law creates tougher emergency preparedness standards for pipelines and oil-carrying railroads. It also charges rail and pipeline companies a fee to help equip and train local fire departments to handle oil accidents.

“I think it’s pretty much indisputable at this point that what exists at the federal level is not adequate,” said Sheridan Brown, legislative coordinator for the New Hampshire Audubon. “We’re happy that there’s going to be some state level oversight.”

The concern over the safety of oil transport has been building with each major oil pipeline spill and train derailment.

The most catastrophic incident was the July 6, 2013 accident in Lac-Mégantic, Quebec, where a train derailed, causing 63 railcars full of North Dakota light crude oil to explode and killing 47 people. Since then, a series of other oil train derailments have resulted in fires or explosions, including in Aliceville, Ala.; Casselton, N.D.; Plaster Rock, New Brunswick; and Lynchburg, Va.

Major pipeline spills have been in the public spotlight, too. The most notable of them is the July 2010 pipeline rupture in Marshall, Mich., where more than one million gallons of tar sands oil spilled, fouling the Kalamazoo River—a disaster that has yet to be fully cleaned up. In April 2013, a pipeline split open and dumped tar sands oil into a Mayflower, Ark., neighborhood.

Under pressure to provide better oversight, the Pipeline and Hazardous Materials Safety Administration (PHMSA) and the Federal Railroad Administration (FRA) have enacted  and proposed new rules for pipelines and trains and imposed voluntary restrictions for oil-laden trains.

But both agencies have a history of being too thinly staffed to carry out the oversight already required of them. And with industry lobbyists working to derail new regulations, critics worry that the necessary protections will never be enacted.

“Essentially, there’s no meaningful regulation or requirements or standards for oil spill response for railroads,” said Paul Blackburn, an attorney and consultant who helped push for Minnesota’s new law. “Instead, decades old federal regulations continue…[that] for all practical purposes exempt railroads from federal oil spill response standards.”

Urgency Felt in Wash., N.H.

Under the federal 1990 Oil Pollution Act, states are allowed to enact their own rules for spill preparedness as long as they are equal to or more rigorous than the federal regulations. Several, including California, Washington, and Oregon, did so years ago.

Now, railroads carrying crude oil through Minnesota have to submit spill prevention and response plans to the state pollution control agency, carry out practice drills and comply with other requirements in an emergency. Companies that move oil in the state via rail or pipeline also have to pay a fee to fund training and buy equipment for emergency crews to respond to an oil-train explosion or pipeline rupture.

“Minnesota recognized that scores of its cities and towns are threatened by crude oil shipments by rail and pipeline, and that local first responders are almost always the first on the scene,” said Blackburn. “To respond to a major spill—such as from an oil unit train [of around 100 tank cars]—is well beyond the abilities of most rural fire departments.”

Blackburn said he expects other states that have growing oil-by-rail traffic to consider similar fees and requirements.

In New Hampshire, lawmakers were focused on preventing and cleaning up oil possible spills from just one pipeline: the Portland-Montreal Pipeline, the only hazardous liquids pipeline in the state. It is partly owned by Portland Pipe Line Corp.

“They have, by and large, been good neighbors, but you look around the country and you see some of the problems that have occurred,” said state Sen. Jeff Woodburn, who sponsored the New Hampshire bill. “I think it’s pretty important to take steps toward giving more authority, more autonomy, to the states to be more engaged in the potential of a spill.”

The 236-mile line consists of three separate pipes built to carry conventional crude oil from Maine, through New Hampshire and Vermont, and on to refineries in Montreal and Ontario. Two of the pipes are still carrying varying amounts of oil, while a third was retired in 1984.

What worries state officials and environmentalists is that the Portland-Montreal pipeline could be reversed and used to carry tar sands oil to Maine’s coast for export. Canada approved what could be the first part of this plan—a reversal on Enbridge Inc.’s Line 9b so it can deliver Alberta’s tar sands to Montreal.

The Portland-Montreal pipeline runs through New Hampshire’s picturesque northern region, crossing more than 70 streams and wetlands, including two major rivers, according to Brown, the legislative coordinator for New Hampshire Audubon. Brown and others are concerned that oil spills involving dilbit are harder to clean because globules tend to sink in water.

“Our North Country economy is primarily based on recreation, so to have something up there that damages wetlands and rivers would really be catastrophic for those communities,” said Brown.

“That got us looking at what [protections are] in place,” he said. “And there really isn’t a lot at the state level…there is a heavy reliance or faith in the federal government that it’s going to take care of things. But the spill in [Michigan] and some of these other spills have shown that that is not the case.”

Once the governor signs it, the New Hampshire law will give the state’s department of environmental services the authority to craft pipeline spill regulations to cover inland oil transit. Currently, that agency is in charge of marine spill prevention and response.

The catch is that the new law won’t come with any new funding—and least not yet. A proposed fee ran into opposition and was dropped from the legislation.

“Our department of environmental services was very generous to accept additional responsibility without additional money,” said Brown. “They saw enough urgency there to doing this, enough benefit to doing it that they said, ‘let’s go forward, and we’ll figure out the funding part of it some other time’…they were eager to have that tool to make sure the plans are better here in the state.”

Valero Canada: ‘We don’t want to pay for cleanup’

[Editor: I received the following document from a volunteer for Benicians For a Safe and Healthy Community.  It is a letter from Valero of Canada, addressed to a consultation in Canada nearly a year after the disaster in Lac-Mégantic.  Participants were scratching their heads about who is liable and who pays when a billion-dollar cleanup is necessary after a bomb train blows up.  Valero wanted everyone to know: “No, uh-uh, not us!”   Our Benicia volunteer wrote, “I found a letter dated April 24,2014 from VALERO energy with a subject: Stakeholder consultation on federal rail  liability and compensation regime.  In the letter on paragraph 4 it intones clearly that the liability in a spill is to be with the transporter.  … I think it should be in the record as it clearly states… their intent of a lack of responsibility in the case of a derailment, explosion and spill.”  – RS]
Valero letter of 4-24-2014, addressing a Canadian Stakeholder consultation on federal rail liability and compensation regime

 

California imposes 6.5-cent fee on oil companies for every barrel of crude that arrives by rail or pipeline

Repost from The Sacramento Bee
[Editor: Significant quote: “The resulting funds, estimated at $11 million in the first full year, will be allocated for oil spill prevention and preparation work, and for emergency cleanup costs. The efforts will be focused on spills that threaten waterways, and will allow officials to conduct response drills.”  Of course, we won’t need this fund if we simply STOP crude by rail and move toward clean energy.  – RS]

California to impose fee on crude oil rail shipments; funds to be used for spill prevention, cleanup

By Tony Bizjak, The Sacramento Bee  |  Jun. 16, 2014
A crude oil train operated by BNSF travels just outside the Feather River Canyon in the foothills into the Sacramento Valley. Jake Miille / Special to The Bee

California leaders have included several safety provisions in this year’s state budget with the aim of preventing toxic spills and fires as oil companies ship more crude oil on trains through cities and wildland areas.

Beginning in the coming fiscal year, the state will apply a 6.5-cent fee on oil companies for every barrel of crude that arrives in California on rail, or that is piped to refineries from inside the state. The resulting funds, estimated at $11 million in the first full year, will be allocated for oil spill prevention and preparation work, and for emergency cleanup costs. The efforts will be focused on spills that threaten waterways, and will allow officials to conduct response drills.

The budget also separately includes funds to hire seven more rail safety inspectors for the California Public Utilities Commission, PUC spokeswoman Terrie Prosper said.

The 6.5-cent shipping charge will be administered by the state Office of Spill Prevention and Response. “We consider this a great victory,” office administrator Tom Cullen said Monday. Until now, the office’s scope has been confined mainly to coastal areas. “We weren’t positioned in California to prepare for and respond to oil spills on the interior of the state.”

Cullen and others negotiated the shipping charge over the weekend with oil industry officials. The charge, an extension of an existing marine fee, may be the first of several steps California officials take in coming months to improve the state’s ability to minimize oil spills and handle them more effectively when they happen.

Tupper Hull, spokesman for the Western States Petroleum Association, said his organization will work with the state on the issue.

“The new revenues, the first place they should go, is to make sure local responders are adequately equipped,” Hull said. “We recognized from the beginning that this is a legitimate issue.”

The safety efforts have taken on urgency as oil companies reveal plans for hundreds of crude-by-rail shipments in California, including a proposal by the Valero Refining Co. to ship 100 crude oil tank cars a day through downtown Sacramento and downtown Davis to Benicia. Details of that plan are expected to be released by Benicia officials Tuesday.

Federal officials have warned that one of the crude oils being shipped into the state, from the Bakken region of North Dakota, appears to be more flammable than typical crude oils. Three recent train crashes and explosions, including one that killed 47 people in the Canadian city of Lac-Megantic last year, prompted federal transportation officials last month to require that railroads notify state emergency officials of large Bakken shipment times and routes.

Central to the state’s safety efforts will be keeping a closer watch on the tracks themselves. The state budget includes seven new rail inspector positions to help the California Public Utilities Commission fulfill its mandate to inspect every mile of rail in the state annually. PUC deputy director of rail safety programs Paul King said his agency has failed in that task some years because of lack of personnel.

With rail crude oil shipments on the rise, it’s critical that the state steps up now, King said. “The Bakken crude in particular is a big problem. This is a lot of volatile material coming in on routes where it hasn’t come in before.”

The state Senate on Monday passed a resolution urging the U.S. Department of Transportation and other federal agencies to write tougher standards for train tank cars and to “prioritize safety over cost effectiveness” in dealing with rail crude shipments. Federal officials have said they intend to improve design standards for rail cars hauling crude oil, but haven’t set a date.

Sens. Jerry Hill, D-San Mateo, and Lois Wolk, D-Davis, introduced a bill last week that would impose a second shipping fee on oil companies to be used to train and equip “first responders,” such as fire departments and hazardous materials crews, to deal with major spills and fires on railroad lines. The authors have not yet determined the fee amount.

“It’s not a matter of will (a spill) happen, it’s when,” Hill said. “We have to be prepared. We need to provide the resources for first responders to address the emergency.”

A recent state report found that 40 percent of local firefighters in the state are volunteers whose departments generally lack the training and equipment to deal with major hazardous materials spills.

Assemblyman Roger Dickinson, D-Sacramento, also has authored a bill requiring rail carriers to communicate more closely with state emergency officials about crude oil rail movements.

Read more here: http://www.sacbee.com/2014/06/16/6488137/california-to-impose-fee-on-crude.html#storylink=c

 

US “Not Immune” to Oil Price Hike

Repost from Oil Change International
[Editor: Significant quote: “Put simply the oil boom has not insulated American consumers from the price spike that the violence in Iraq will cause. And Iraq is not the only major oil producer with ongoing political instability. Think about recent events in Nigeria, Venezuela and Libya, to name just three.”  – RS]

US “Not Immune” to Oil Price Hike

Andy Rowell, June 16, 2014

Crisis_in_Iraq_leading_to_higher_gas_pricesFor years the American oil industry has argued that the ongoing U.S. oil boom will bring about “energy independence” and drive gasoline prices  down. Americans are supposed to be enjoying an era of cheap, plentiful energy.

As the oil industry has set about fracking America, decades of declining production has been reversed in just a handful of years. The US is now the world’s largest producer of oil and gas.

The oil industry has persuaded or forced communities across North America to compromise their water supplies and their health to allow the fracking revolution with the promise of lower prices and energy security.

So American consumers should apparently be appreciating the impact of the country’s shale revolution as crude oil and condensates production has just surpassed its previous peak, reached way back in 1970. A 44-year old record has just been broken.

Not so. As the Energy Policy Information Centre pointed out, at the end of last month. “Despite all the promise of the oil boom, for most Americans, its economic benefits remain an abstract concept in the absence of relief at the gas station.”

The sad truth is that despite the US economy being half as “oil intense” compared to the 1970s – as measured by barrels of oil consumed per $1,000 of GDP –  American households and businesses still spend a staggering 900 billion dollars annually on petroleum.  The average American household dedicates around 5.3% of its spending to petroleum, with the burden felt much more heavily by low income households.

And here comes the real irony. Despite the US reaching a record production peak, last week the price of Brent crude rose 4 per cent, its biggest one-week rise since July last year. Wholesale US gasoline rose with it and thus US consumers will notice higher pump prices probably as soon as this week (see chart).

FT RBOB Gasoline 10 days to June 16Source: Financial Times

And the reason is the ongoing turmoil in Iraq. The escalating violence there is threatening supplies from OPEC’s second largest producer, which produces in excess of 3 million barrels of oil a day.

Bloomberg is quoting Societe Generale saying that if the violence escalates and production is affected, Brent crude may jump from its current position of $113 to $120 or even $125. It may go even higher.

“This is a serious situation in terms of the global oil market,” Victor Shum, a vice president at IHS Energy Insight in Singapore, told Bloomberg. “This situation in Iraq really threatens potential supply growth going forward.”

So far the fighting has not spread to the south, where the US Energy Information Administration estimates that three-quarters of Iraq’s crude output is produced. But if the Southern oil fields fall, the global oil price could skyrocket to unprecedented levels.

What this shows, as Ed Crooks, points out in today’s Financial Times is that, despite its own fracking revolution, “the US is not immune to the effects of disruption in world markets.”

Put simply the oil boom has not insulated American consumers from the price spike that the violence in Iraq will cause. And Iraq is not the only major oil producer with ongoing political instability. Think about recent events in Nigeria, Venezuela and Libya, to name just three.

The boom that is needed in order to truly insulate the American economy from the relentless turmoil in oil producing countries is a boom in efficiency, public transit, smart growth and electric vehicles. These technologies and policy initiatives are here now and ready to go, but the political and financial weight behind them has been overshadowed by the lure of oil boom riches.

Instead of “All of the Above“, we need energy policies that will help American’s reduce the amount of oil they need to buy, at any price.

For safe and healthy communities…