Bakken Crude, Crude By Rail, Insurance Industry, Oil Industry, Rail industry, Tar sands crude

Railroads & oil industry must insure against costs of clean-up after catastrophic accidents

Repost from The Times Union, Albany, NY

Editorial: A cost of rail oil profits

Thursday, June 5, 2014

First, 47 people were killed and a town flattened last summer when a crude oil-filled freight train exploded in Lac-Megantic, Quebec. Then, as residents mourned the death and destruction, the railroad at fault declared bankruptcy, leaving the Canadian government holding a nearly $3 billion bill.

The Canadian tragedy has helped fuel a national cry on this side of the border for greater scrutiny of what has become a boom in crude oil rail transport. Capital Region residents need look no farther than the continual ring of tanker cars around downtown Albany for reason to worry that a disaster could happen here, and to wonder: If it does, who will be held responsible?

As we wait for the White House’s release of new federal rules regarding the railroads themselves, state Assemblywoman Patricia Fahy, an Albany Democrat, has proposed that terminal operators also be required to have some responsibility in controlling this surge.

Since the Quebec disaster, at least eight significant accidents have occurred in North America, involving trains carrying either tar sands crude oil or Bakken crude oil, which is the source for the tankers bound for the Port of Albany. Ms. Fahy, pointing to the bankruptcy of the railroad company involved in the Lac-Megantic accident and the failure of its insurance to cover the billions in damage, suggests “terminal operators should put up enough financial security to cover expenses after something happens.”

That makes sense. In the same way General Electric is being held responsible to clean up PCBs from the Hudson River, the railroads and terminal operators profiting from crude oil transport should be required to invest in upgrades to safeguard against accidents, as well as surety for when an accident happens. This is a cost of doing dangerous business.

With Global Companies and Buckeye Partners seeing twofold increases in just a couple of years to 3 billion gallons of crude flowing through their terminals annually, and with railroad profits surging nearly 20 percent since 2009, these modern-day rail magnates can handle the expense.

Ms. Fahy’s bill would apply to all bulk storage facilities in the state that handle crude oil, and require financial security to meet all the responsibilities for cleanup and decontamination associated with any release of the oil.

She notes that, as freight railroads went from just 9,500 carloads of crude in 2008 to more than 434,000 carloads in 2013, the storage needs have increased accordingly.

According to the Times Union’s Brian Nearing, Lac-Megantic officials have estimated it will cost $2.7 billion to rebuild the shattered town, where more than 30 buildings were destroyed, and another $200 million to clean up oil-contaminated land, the sewer system and nearby bodies of water like the Chaudiere River.

We can’t let that happen here. Ms. Fahy’s bill is a step in the right direction.

Crude By Rail, DOT-111, Rail routing, Train speed

Oil tank cars pose a hazard when moving and when parked

Repost from  The Post-Standard, Syracuse, NY (Letters to the Editor)

Oil tanker rail cars pose a hazard when moving and when parked

To the Editor:

Every sports person knows that a moving target is harder to hit than a stationary one. When you can read graffiti on oil tanker cars parked in the train yards in Minoa, and other areas around Syracuse, you know you have a serious safety problem.

Interstate commerce allows Bakken crude-oil rail shipments from North Dakota to “pass” through Central New York State. U.S. Sen. Charles Schumer, D-N.Y., wants the U.,S. Department of Transportation and the Association of American Railroads to reduce the speed limit of these oil tanker trains from 50 mph to 40 mph through Syracuse and other heavily populated areas. Between 200 to 300 tanker cars “pass” through the Syracuse area daily. Presently, the 40 mph speed limit only applies to Buffalo and the New York City area.

These antiquated, poorly designed DOT-111 tanker cars pose a potential danger to the populace and the environment regardless of their speed! This was evidenced by the recent CSX derailment of crude oil tanker cars in Lynchburg, Va.

It doesn’t make one iota of difference if these trains travel at speeds of 40 or 50 mph, as long as they keep “passing” through the Syracuse area. Parking, however, for indefinite periods in small populated communities, like Minoa, is not acceptable.

Are we, Minoa residents, considered collateral damage – dispensable, if an accident, man-made or otherwise happens?

Come on, CSX … move these hazardous oil tankers out of my village; my front yard is not a bomb depot.

M. Claire Crull
Minoa

Bakken Crude, BNSF Railway, California Energy Commission, California Environmental Quality Committee, California Regulation, Massive increase in crude-by-rail, Union Pacific Railroad

California legislators offering bills to prevent oil by rail accidents – Union Pacific & BNSF react

Repost from The Los Angeles Times, via The Columbian

California moves to prevent spills of oil shipped by trains

By Marc Lifsher, Los Angeles Times, June 6, 2014

SACRAMENTO, Calif. – Although most people think of oil spills in California as potential beachfront disasters, there is new anxiety in Sacramento about the surge of crude oil now coming through the state each day by train.

Gov. Jerry Brown and lawmakers want to avoid the sort of fiery disaster that killed 47 people in July in southern Quebec when tank cars exploded as they carried oil from the booming Bakken oil fields of North Dakota through Canada. Other less spectacular oil tanker car derailments occurred in Aliceville, Ala.; Casselton, N.D.; and Lynchburg, Va., during the past 12 months.

With a steady increase of oil now being shipped into California from out of state, policymakers are scrambling to come up with spill-prevention programs to lower the risk of potentially deadly accidents. Proposals under consideration include hiring new state railroad inspectors, developing better spill-response plans and improving communications between rail carriers and emergency services agencies.

“California is seeing a huge shift in the way we import oil,” said state Sen. Fran Pavley, D-Agoura Hills, one of two lawmakers pushing oil-by-rail safety bills this session in the Legislature. “We need to address the new and unique hazards of crude-by-rail transportation.”

The threat to California communities is particularly dire, environmental justice groups contend, because many of the state’s busiest rail lines run through densely populated areas, and refineries often are in low-income neighborhoods, such as Wilmington in southern Los Angeles County and Richmond in Northern California’s Contra Costa County.

Railroads question the need for new state regulations that could conflict with the federal government’s historic oversight of all aspects of rail safety, operations and working conditions. Rail companies say they have “a 99.997 percent safe delivery record of hazardous materials” and they are eager to cooperate with state officials to ensure even safer operations.

Oil imports by rail account for just about 1 percent of total shipments to California refineries. Most of the crude arrives by ship or by pipelines from in-state production fields.

But that mix is changing fast. Last year, railroads brought 6.3 million barrels of crude into the Golden State, mostly from North Dakota and Canada, according to the California Energy Commission. That’s up from 1.1 million barrels in 2012 and just 498,000 in 2010. A barrel contains 42 gallons of crude oil.

Shipments to Southern California accounted for most of last year’s almost sixfold jump in crude-by-rail activity, the commission reported. Tank-car transportation, it estimates, could reach about a quarter of all state imports in 2016 if the trend continues.

Volume went “from nothing to massive, a huge expansion,” said Julia May, a senior scientist at Communities for a Better Environment, a Huntington Park group that advocates for low-income people living near pollution sources. “It’s a major concern.”

Three proposals for protecting the state against rail-related oil spills are under consideration.

As part of his annual budget, Brown wants to expand an existing prevention-and-response program for ocean oil spills to cover inland areas. The initiative would be funded by a proposed 6.5-cent-per-barrel fee on all crude oil delivered by rail to refineries. Additionally, Brown is asking lawmakers to approve hiring new track inspectors.

Separately, Pavley last week steered a similar spill-response measure, SB 1319, through the state Senate, winning approval on a 23-11 vote.

In the lower house, Assemblyman Roger Dickinson, D-Sacramento, recently amended a bill that would require railroads to report to the state Office of Emergency Services information about hazardous materials, including crude oil, being transported into the state.

His proposal, AB 380, which was unanimously approved by the Senate Environmental Quality Committee on Wednesday, also would require rail carriers to maintain live, 24-hour communications lines that would enable local first-responders to contact them.

“We want to make sure that in California we get the information we need,” Dickinson said.

Meanwhile, the federal government, which is ultimately responsible for railroad safety regulation, recently issued an emergency order to railroads to notify states of the specific routes they will use when transporting more than 1 million barrels of Bakken crude. Such oil “may be more flammable than traditional heavy crude,” the U.S. Department of Transportation warned.

“The number and type of petroleum crude oil railroad accidents … that have occurred during the last year is startling,” the department said in its May 7 order, referring to recent accidents in Quebec, Alabama, North Dakota and Virginia.

The Brown administration plans and the Pavley legislation are opposed by the two principal railroads that haul crude oil to California: Union Pacific and BNSF.

“The railroads understand the questions and concerns that California has regarding crude oil shipped into the state by rail,” the two companies said in a May 22 letter to Pavley.

They also warned that the proposed California rules may be unworkable, preempted by existing federal laws and harmful to national security concerns.

Union Pacific and BNSF also cautioned policymakers to be skeptical of official projections of an extremely rapid increase of crude shipments to California.

The oil industry in a May 28 “alert” to state senators called the Pavley bill “excessive” and “not narrowly focused on areas where there may be a real risk from potential oil spills by rail.”

The prospect of more and bigger accidents is real if immediate changes are not made, warned Jayni Foley Hein, executive director of the Center for Law, Energy and the Environment at the University of California-Berkeley School of Law.

“The danger is not so much the oil itself as a commodity,” Hein said, “but the sheer number of cars carrying this oil . combined with aging infrastructure.”

California Energy Commission, California oil industry, Crude By Rail

California Energy Commission workshop in Berkeley on changing trends in sources of crude oil & transport

Circulated by email…

Save the date!  The California Energy Commission will be holding a public meeting on changing trends in sources of crude oil & transport at the Berkeley City College auditorium on Wednesday, June 25 at 9am (details below).    An opportunity to give the CEC an earful about what they modestly term “market changes.”  See p. 3 of the downloadable PDF for public comment instructions, background, etc.   Basic info follows below.

California Energy Commission Workshop
RE: Crude Oil

Notice of Lead Commissioner Workshop on Trends in
Sources of Crude Oil

The California Energy Commission Lead Commissioner on the Integrated Energy Policy Report will conduct a workshop to highlight changing trends in California’s sources of crude oil with emphasis on the potential growth of crude oil transport to California by rail, and the impacts of these trends on the transportation energy market and existing government policies. The discussions will focus on existing and possible new roles of federal, state, and local government to address market changes.

Commissioner Janea A. Scott, Chair Robert Weisenmiller, and Commissioner Karen Douglas will be in attendance.  CPUC President Michael R. Peevey will also be in attendance.  Commissioner Scott is the Lead Commissioner for the 2014 IEPR Update and the Lead Commissioner on Transportation.  Other Commissioners of the California Energy Commission and the California Public Utilities Commission may attend and participate in the workshop.  The workshop will be held:

June 25, 2014, 9:00 AM
Berkeley City College Auditorium
2050 Center Street, Berkeley, California 94704
(Wheelchair Accessible)
Remote Access Available by Computer or Phone via WebEx™
(Instructions background, agenda, etc  here)