Bakken Crude, Crude By Rail, Local Regulation

Vancouver City Council passes oil moratorium

Repost from The Columbian

Vancouver City Council passes oil moratorium

Unanimous vote approves emergency six-month measure
By Stephanie Rice, September 11, 2014
An oil train passes through Vancouver. The Vancouver City Council on Thursday unanimously passed an emergency six-month moratorium on new or expanded facilities that would accept crude oil. The moratorium won’t affect the oil transfer terminal proposed by Tesoro Corp. and Savage Companies that’s currently under review by the state. (Steven Lane/The Columbian)

The Vancouver City Council on Thursday unanimously passed an emergency six-month moratorium on new or expanded facilities that would accept crude oil.

The moratorium won’t affect the oil transfer terminal proposed by Tesoro Corp. and Savage Companies that’s currently under review by the state.

While the six-month moratorium was straightforward — a public hearing will be Oct. 20, and it will expire March 10, 2015, unless extended by the council — a last-minute filing muddied the issue.

The special council meeting was announced Wednesday in accordance with a state law requiring 24-hour public notice. It was meant to head off plans by NuStar Energy L.P. of San Antonio to apply to start storing crude oil at its two bulk tank terminals in Vancouver, one at the port and one at 5420 Fruit Valley Road.

At 3:30 p.m. Wednesday, a preliminary application was filed by NuStar with the city, said Brent Boger, an assistant city attorney.

Boger said he doesn’t know whether a pre-application qualifies the project as vested, and therefore exempt from the moratorium.

A pre-application signals interest to do a project in the city. During a pre-application conference, the applicant learns what the city would require before permits would be issued so the applicant can decide whether to go forward with an application.

Without a moratorium, NuStar would be allowed to store crude oil under current city zoning, Boger said.

Jon Wagner, a senior planner, told the council he hadn’t had enough time to thoroughly review the thick packet submitted by NuStar.

NuStar has handled jet fuel, antifreeze, diesel, methanol and other products at its Vancouver terminals, but not crude oil. In April, NuStar submitted an application for an air quality permit with the Southwest Clean Air Agency to convert a tank at each of its locations to handle crude oil.

The terminals would receive oil by rail, and then ship it out by barge.

NuStar spokesman Chris Cho said Thursday the potential crude-by-rail project at the Vancouver terminal is in the early stages of development, but a pre-application was submitted for a building permit to start the lengthy permitting process.

“If we receive regulatory approvals to build the facility, we anticipate it would handle an average of 22,000 barrels per day — approximately one-third the capacity of one unit train per day,” Cho said. “This project would provide revenue to the port, create jobs, bring more low-cost crude to the region, and further support U.S. energy independence. It would also be a state-of-the-art facility that would be operated safely, in accordance with NuStar’s very high safety standards,” Cho said.

Cho emphasized that NuStar operates rail facilities at many terminals and invests in safety equipment, technology and specialized training for employees and ensures trains comply with all regulatory safety standards.

Aside from the NuStar questions, the council focused on wanting the six months to discuss how crude petroleum facilities should be regulated. The proposed moratorium referenced Bakken crude oil, but Councilor Anne McEnerny-Ogle suggested the moratorium cover all crude oil facilities and other councilors agreed.

The only councilor who objected to the moratorium was Bill Turlay, but he changed his mind and voted with his six peers.

Initially, Turlay, speaking to the audience that filled the council chambers, said he remembers when many of them showed up to protest coal trains.

Now it’s oil trains, he said.

Critics of the Tesoro-Savage facility cite many concerns, including potential oil spills, the volatility of North Dakota Bakken crude and global climate change.

Turlay, who believes that carbon dioxide has only a negligible effect on climate change, said instead of rushing to a moratorium he wants a public debate about causes of climate change. His comments prompted laughter and groans from the audience.

Turlay said he does have concern about safety, but trusts the rigorous review by the Washington State Energy Facility Site Evaluation Council weeds out any dangerous proposals.

Councilor Jack Burkman pointed out to Turlay that smaller projects need city, not state, approval. Those smaller projects don’t have to be reviewed by the state evaluation council, and that’s the point of enacting a moratorium.

Councilor Alishia Topper told Turlay the council was doing what he said he wanted, which was to slow down and carefully weigh the pros and cons of additional regulations.

When it came time for roll call, Turlay said he changed his mind and voted “yes.”

In June, the City Council voted to formally intervene in the EFSEC process, a legal maneuver giving the city the right to present evidence and appeal.

The council also approved a broad policy statement opposing any proposal that would result in an increase of Bakken crude oil being hauled through Clark County.

Tesoro-Savage wants to build an oil-by-rail terminal that would receive an average of 360,000 barrels of crude per day at the port.

Eventually, the evaluation council will make a recommendation to Gov. Jay Inslee, who will approve or deny the project.

While the city’s moratorium won’t stop the Tesoro-Savage project, Vancouver resident Jim Luce, a former chairman of EFSEC who opposes the oil terminal, said it could influence Inslee.

“It sends a signal to the state — and the governor — that the Vancouver City Council is not enthusiastic about siting oil terminals in its backyard,” Luce said Thursday.

Erin Middlewood contributed to this article.

Crude By Rail, DOT-111, Local Regulation, Tank car design

New Jersey town council presses for moratorium on use of older tank cars

Repost from NORTHJERSEY.COM
[Editor: Significant quote by Teaneck Town Councilman Mark Schwarz: “‘If we’re all going to sit here and wait for our [Legislative] District 37 leadership and Congress’ to act, ‘then we’re going to die of old age.'”  – RS]

Teaneck Council presses for moratorium on use of older tank cars on oil trains through town

SEPTEMBER 11, 2014, BY AARON MORRISON

TEANECK — Local officials are pushing for a moratorium on the use of old tankers to carry millions of gallons of highly explosive materials on rail tracks through town.

Tank cars lining the CSX tracks near Cedar Lane in Teaneck in May. Fifteen to 30 oil trains pass each week through 11 Bergen County towns.
Tank cars lining the CSX tracks near Cedar Lane in Teaneck in May. Fifteen to 30 oil trains pass each week through 11 Bergen County towns. | CHRIS PEDOTA/STAFF PHOTOGRAPHER

Residents and members of the Township Council have expressed concern about the safety risks posed by crude oil traveling in substandard railcars that federal regulators have cautioned against.

The Record has reported that at least 7 million gallons per day of highly combustible Bakken crude oil comes through 11 Bergen County towns — Northvale, Norwood, Harrington Park, Closter, Haworth, Dumont, Bergenfield, Teaneck, Bogota, Ridgefield Park and Ridgefield – on the CSX River Line.

Concerns over the crude on the railways have mounted in recent months after a series of fiery accidents and derailments in North Dakota, Alabama and Virginia. Last summer, 47 people were killed when a train carrying Bakken crude derailed in a small Quebec town.

The Teaneck Council passed a resolution Tuesday night calling for the temporary ban until federal regulators have deemed the tankers adequate. Though ceremonial, the council hopes neighboring North Jersey communities will join in amplifying the message.

“The transportation of this material in such close proximity to homes, businesses and our water supply, raises serious public safety concerns and requires that we take immediate action to eliminate this hazard,” the resolution states.

Mayor Lizette Parker on Tuesday night said the township should hold federal lawmakers accountable, while other members of the council asked for development of a township emergency response plan, in the event of a derailment.

“This is a safety issue that needs to be important to them,” Parker said. “We do have the power of influence. And I don’t mean the seven of us” on the council. “I mean the 39,000 of us.”

Councilman Jason Castle urged his colleagues to consider an emergency management plan he said he circulated “two sessions ago.”

“My daughter just started school at the Rodda Center — she’s at the preschool there and the tracks run right by the Rodda Center,” he said.

Councilmen Henry Pruitt and Mark Schwartz said the township should find other strategies that don’t rely on action from officials in Trenton and Washington.

“If we’re all going to sit here and wait for our [Legislative] District 37 leadership and Congress” to act, “then we’re going to die of old age,” Schwartz said.

Enlisting other towns

While New Jersey officials declined to reveal the number of trains that travel on the rail line, citing security risks, documents provided by New York State officials showed between 15 and 30 oil trains are entering Bergen County from Rockland County each week. The trains also travel through Hudson, Essex, Union, Middlesex, Somerset and Mercer counties, according to a map on CSX’s website.

Rail executives this year agreed to more track inspections and a reduction in train speeds in highly populated areas, but they haven’t been swapping out their fleet of old tanker cars. Even though the National Transportation Safety Board has called the tankers inadequate for transporting such flammable materials, federal officials are only recommending that railway companies stop shipping crude in the old cars.

Two weeks ago, the Teaneck Council asked Township Manager William Broughton to send letters to the other Bergen County municipalities along the CSX line. Broughton told the council he had not received any responses as of Tuesday.

The manager also said the township is already working with CSX “on this issue of preparedness and response.” This week, CSX paid for one of the township’s deputy fire chiefs to attend safety training in Pueblo, Colo. The course deals specifically with fires from crude oil, Broughton said.

Residents at Tuesday’s meeting praised the council’s attention to the issue. Some even vowed to take drastic measures to stop the trains from coming past their homes and businesses and force federal reforms.

“I will personally sit on those tracks, and anyone else who wants to can join me,” said Paula Rogovin, who organized a protest at one of the railway bridges in town.

Bakken Crude, Crude By Rail, Pipeline transport

Kern County approves California’s first big oil train project

Repost from Reuters
[Editor: Significant quote: “The company can ship railed-in crude Alon doesn’t process to other refiners via pipeline.”  Presumably this would be a Benicia Valero alternative to receiving direct rail shipments of Bakken crude?  – RS]

Alon USA Energy’s California oil-by-rail project approved

By Kristen Hays, September 9, 2014

The first substantial oil-by-rail project at a California refinery won approval on Tuesday despite a last-minute push for more scrutiny by some environmental groups.

The facility at Alon USA Energy Inc’s shuttered Bakersfield refinery in Kern County, home to about 65 percent of California’s heavy oil output, will push crude offloading capacity to as high as 150,000 barrels per day (bpd) from the current 13,000 bpd.

The Kern County Board of Supervisors approved the $100 million project after a lengthy environmental review. Alon Chief Executive Officer Paul Eisman told the board the project could start up by the third quarter next year.

“Now go put our people to work,” board Chairman Leticia Perez said.

The refinery, which has been operating as a terminal, will receive crude in railcars that meet the latest safety standards with thicker hulls and reinforced valves.

Some residents and environmental groups including Earthjustice and the Sierra Club opposed the project, citing dangers of crude trains and “plumes of toxic smoke” emitting from the plant.

Other residents, unions and economic development leaders want the refinery and rail project jobs and are satisfied with planned safety measures.

“That plant’s been a fixture in this town since way before I was born. Alon is ready to put it back to work at full capacity,” local contractor Sam Ackerman said.

The company can ship railed-in crude Alon doesn’t process to other refiners via pipeline. Credit Suisse said in a note to investors this week that the project could add $7 per share in value to shareholders.

Alon’s facility will be the second oil-by-rail terminal in Bakersfield, where pipeline company Plains All American will start up a 70,000 bpd project in October.

Both seek to increase California refiners’ access to booming inland U.S. and Canadian output, which is cheaper than imports that make up more than half of all crude processed in the state. Other refiners trying to do the same have faced delays as well as opposition in light of a string of fiery crude train crashes elsewhere in the last year.

The Alon project at the 70,000 bpd Bakersfield plant also includes upgrades to several units at the refinery to enable processing of light crude, including output from Texas and North Dakota’s Bakken shale, as well as equipment to offload undiluted Canadian bitumen.

The plant is already built to process California’s heavy crude, 65 percent of which is produced in Kern County.

The project’s approval comes nearly two years after the company shut down the plant because it was unprofitable.  Alon said reopening the refinery will bring 100 jobs as well as 30 more for the rail operation.

(Reporting By Kristen Hays; Editing by Ken Wills)
Bakken Crude, Blast zone, Crude By Rail, Federal Regulation (U.S.), Oil stabilization, State regulation

Safety of Citizens in Bomb Train Blast Zones in Hands of North Dakota Politicians

Repost from Desmogblog

Safety of Citizens in Bomb Train Blast Zones in Hands of North Dakota Politicians

2014-09-05, Justin Mikulka
Lac Megantic train explosion
Lac Megantic train explosion

When North Dakota Congressman Kevin Cramer was asked recently if it was scientifically possible to make Bakken crude oil safer by stripping out the explosive natural gas liquids with a process like oil stabilization, his response was quite telling.

“So scientifically can you do it? Sure, but you have to look at it holistically and consider all of the other elements including economics, and is the benefit of doing something like that does that trump other things like speed of trains, and what kind of cars,” he said.

This is very similar to the comments made by Lynn Helms of the North Dakota Department of Mineral Resources according to the July 29 meeting minutes provided to DeSmogBlog by the Industrial Commission of North Dakota.

“In response to a question regarding other mechanisms besides oil conditioning in the field, Mr. Helms stated there are other mechanisms — none of them without a significant downside….It makes sense to do the conditioning in the field. There are other options to do it downstream somewhere in a very large and very expensive operation.”

In a June 24 e-mail obtained by DeSmogBlog through a freedom of information request, Helms identified himself as “the primary contact for Governor Dalrymple’s team on the crude safety issue” in response to an inquiry from the Department of Energy about who would be working on the issue of Bakken crude oil safety.

As the point person on this issue for North Dakota, Helms’ opinions carry significant weight. And just like Congressman Cramer, Helms is pointing out the “significant downside” of stabilization, which is that it is an expensive operation.

It is well established that stabilization works and would make oil trains much safer. Not even North Dakota politicians are arguing that point anymore. But the industry doesn’t want to pay for it. And right now, the only ones who could mandate them to stabilize the oil via new regulations are the three members of the Industrial Commission of North Dakota.

What About The Feds’ Oil-By-Rail Regulations?

The reason North Dakota politicians are discussing this issue at all is because the federal government has essentially punted the question.

In the 200 pages of new proposed oil-by-rail regulations released in July, there is not a single line about requiring the oil or rail companies to stabilize the oil prior to shipping.

Stabilization is a process that removes the explosive natural gas liquids from the oil and is required by pipeline companies. This process would turn the current Bakken “bomb trains” into simple oil trains. They would still pose a threat of oil spills, but would no longer threaten to kill people in massive explosions like the one in Lac-Megantic, Quebec, or be a target for terrorism.

While the proposed regulations don’t require stabiliazation, they do include three questions that indicate lawmakers are aware that stabilizing or “degassifying” the crude makes it safer and that producers have the ability to reduce the volatility of crude oil prior to shipping it by rail.

Is the current exception for combustible liquids sufficient to incentivize producers to reduce the volatility of crude oil for continued use of existing tank cars?

Would an exception for all PG III flammable liquids further incentivize producers to reduce the volatility of crude oil prior to transportation?

What are the impacts on the costs and safety benefits of degasifying to these levels?

As previously reported by DeSmogBlog, the regulators in charge of finalizing the new proposed oil-by-rail regulations are big believers in cost-benefit analysis. And looking at their questions, it is clear they know the oil can be made less volatile. But they want to hear more from the industry about the costs of doing this before doing anything. And instead of requiring stabilization, they are looking for ways to “incentivize” the producers to do it.

Oil Conditioning vs. Oil Stabilization

The North Dakota Industrial Commission is holding a hearing on September 23rd during which it is requesting input on how to make the Bakken crude oil safer for transport. The headline of its press release, “Hearing set on oil conditioning practices,” almost ensures that oil stabilization will never be required in North Dakota.

Oil conditioning is not the same as oil stabilization. Oil conditioning can be done with all of the existing equipment already in the field in North Dakota and thus the cost is minimal. However, in situations where the industry needs to ensure it strips out all the volatile natural gas liquids from the oil, as in the Eagle Ford formation in Texas, they use a different process called stabilization.

Helms and the members of the Industrial Commission like to cite the North Dakota Petroleum Council Study on Bakken Crude Properties when claiming that Bakken crude is no different than other crude oils and thus doesn’t require stabilization. However, that very report makes it clear that conditioning, done with the equipment currently available, is insufficient and was never designed to achieve the type of results expected from stabilization.

From the report, prepared by industry consultant Turner and Mason:

The data consistency [sic] indicates that field equipment is limited in its ability to significantly impact vapor pressure and light ends content.

This is consistent with the expected capabilities of the equipment.

The field equipment is designed to separate gas, remove water and break emulsions to prepare crude for transport, and not remove significant levels of dissolved light ends from the crude.

Meanwhile, at the August 26 meeting of the North Dakota Industrial Commission, Helms once again acknowledged the effectiveness of stabilization, as reported by Petroleum News: “This is very routinely done with high gravity condensate — oil that condenses out of a gas well as it is produced,” Helms said. “That has to be stabilized before it can move through the system.”

Helms word choice is telling. Oil that “has to be stabilized before it can move through the system.” Oil that is moved by pipeline has to be stabilized before it can be moved because pipeline companies require it. The rail companies do not.

Despite his acknowledgement of how stabilization is routine in the pipeline business, at the August meeting, Helms was also sure to point out that in North Dakota they expected to choose conditioning as their solution, as reported by Petroleum News.

Helms agreed, saying conditioning is likely more suitable for North Dakota since the equipment is already in place on well sites but he’d like to hear from others at the upcoming hearing.

“We haven’t closed the door to (stabilization),” Helms said. “We want to hear what people have to say.”

However, if the North Dakota Industrial Commission actually wanted to hear what people have to say about stabilization, the press release about the September 23rd hearing probably should have actually mentioned stabilization. It doesn’t.

The North Dakota Industrial Commission

If there is going to be any regulation requiring stabilization of the Bakken crude it will require the three members of the North Dakota Industrial Commission to make it happen.

Governor Jack Dalrymple is one member of the commission. And his point man on this issue, Helms, has already made it clear he supports conditioning over stabilization.

North Dakota Attorney General Wayne Stenehjem is another member. When a report by the Pipeline and Hazardous Safety Materials Administration recently concluded that Bakken oil was more flammable than most other crude oils, Stenehjem responded to the science by saying, “It seems like they are picking on us.”

The third member of the commission is Agricultural Commissioner Doug Goehring. At the August 26th meeting of the commission, Petroleum News reported that Goehring opposed stabilization for an unlikely reason for someone who helped oversee the massive expansion of the Bakken oil production.

Agriculture Commissioner Doug Goehring voiced his concern with dotting the landscape with stabilizer units.

“We’ve been trying hard to shrink that footprint out there on the landscape, and that’s going to make that awfully difficult.”

So in all likelihood, stabilization is off the table and conditioning will be the new regulation. Helms and others often say conditioning is already being done because the equipment is already in the field. Yet, according to the minutes from the July meeting of the Industrial Commission, Governor Dalrymple said: “Right now we are assuming producers are doing conditioning but we do not have a mechanism to verify that.”

So, let’s get this straight. It is more than a year after the explosion of a Bakken crude train in Lac-Megantic that killed 47 people. And it’s been more than eight months since a train of Bakken crude exploded in Casselton, ND. And the best the regulators can do is hold a hearing to talk about how to do regulate a practice that’s inadequate and they already assume is being done?

For safe and healthy communities…