Tag Archives: Bakken crude

Valero will soon have fifth refinery processing 100 percent North American crude

Repost from the San Antonio Business Journal
[Editor: Note brief reference to Valero’s Benicia Refinery at end of this article.   – RS]

Valero will soon have fifth refinery processing 100 percent North American crude

By Sergio Chapa, Sep 11, 2015, 6:44pm CDT
File photo Valero Energy Corporation's Jean Gaulin Refinery in Quebec City
File photo – Valero Energy Corporation’s Jean Gaulin Refinery in Quebec City

San Antonio-based Valero Energy Corp. is expected to have its fifth refinery capable of processing nothing but North American crude by the end of the year.

Valero (NYSE: VLO) revealed in an investors’ presentation released earlier this week that its Jean Gaulin Refinery in Quebec will be processing 100 percent North American crude oil by the end of the year.

Company figures show that the refinery was 100 percent dependent on foreign crude oil in first quarter 2013, but production from the tar sands region of Canada and the shale plays of the United States has dramatically changed the situation.

The Jean Gaulin Refinery is processing about 80 percent North American-sourced crude oil but will be at 100 percent once a project to modify the Enbridge Line 9B Pipeline is completed in the fourth quarter. The project will reverse the flow of the pipeline to enable oil from the tar sands region of Alberta to flow east to Valero’s refinery in Quebec.

Most refineries were built decades ago and were configured to process to Middle Eastern oil, but Valero spokesman Bill Day told the San Antonio Business Journal that the Jean Gaulin Refinery is lined up to be the fifth of the company’s refinery capable of processing 100 percent North American crude oil.

Day said Valero’s Ardmore, McKee, Memphis and Three Rivers refineries can already process 100 percent North American crude oil, while other plants are processing an increasing amount of North American crude.

The investors presentation shows that Valero is expanding its capacity to process a total of 185,000 barrels per day of light sweet crude from the Eagle Ford and other shale plays at the company’s McKee, Houston and Corpus Christi refineries in Texas.

Day said that the addition of the Keystone XL Pipeline would enable Valero to replace foreign heavy crude with heavy crude from Canada. He also noted that a proposed rail terminal at the company’s Benicia refinery in California, would enable Valero to offset foreign crude brought in by ship with North American crude brought in by rail.

Told to fix leaky oil train cars in 2 months, owners sought 3 years

Repost from McClatchyDC
[Editor:  Significant quote: “This year is already the second worst for oil spilled from trains since the federal government began collecting data 40 years ago….trains spilled about 1 million gallons in 2013 alone, vs. 800,000 in all the prior years combined….More than 600,000 gallons of oil has spilled from trains so far this year….”  – RS]

Told to fix leaky oil train cars in 2 months, owners sought 3 years

By Curtis Tate and Samantha Wohlfeil, September 2, 2015 

HIGHLIGHTS
• Washington state spills led to March order from federal agency
• Industry group asked for three-year extension
• Regulators gave owners until end of 2015

The wreckage of an oil train derailment in Mount Carbon, W.Va., still smolders 48 hours after the crash, on Wednesday, Feb. 18, 2015.

WASHINGTON  |  Railroad tank cars equipped with defective valves still will be allowed to transport crude oil and other hazardous materials through the end of the year, despite a March directive from federal regulators requiring their replacement within 60 days.

The Federal Railroad Administration order followed a Bellingham (Wash.) Herald story about a leaking oil train reported in Washington state in January. The Railway Supply Institute, trade group representing tank-car owners, wrote the agency in April asking for a three-year extension to replace the faulty valves on tank cars that carry hazardous materials.

About 6,000 tank cars were affected by the recall, issued on March 13. On May 12, the day of the original deadline, regulators wrote back to the trade group that the agency found no basis to give tank car owners until 2018 to comply, but nonetheless gave them until Dec. 31, an extension of more than six months.

Officials from the Railway Supply Institute couldn’t be reached to comment.

60   Number of days tank car owners had to comply
with March directive.

The federal order came about a month after crews discovered tank cars leaking from their top fittings while hauling crude oil through Washington state.

In mid-January, a 100-car train loaded with Bakken crude had 16 leaking cars removed at four different stops between northern Idaho and the Tesoro refinery in Anacortes, Wash.

As the train traveled west along the Columbia River, leaking cars were pulled as they were discovered; at each stop, the entire train was inspected before continuing on to the next location.

BNSF Railway, the train’s operator, said a total of 26 gallons of oil from 14 of the leaking cars was found only on the tops and sides of the cars, and no oil was found on the ground, in a report to the U.S. Department of Transportation.

Separately, the Federal Railroad Administration fined the owner of a North Dakota oil loading terminal $10,000 for a spill from a tank car that was discovered in November in Washington state. When the car arrived at a refinery for unloading, inspectors found it coated in oil and measured about 1,600 gallons missing.

State officials first learned of the spill a month after it happened, and no local officials were notified. In March, the Washington Utilities and Transportation Commission recommended $700,000 in fines against BNSF for failure to report 14 hazardous materials spills within the 30 minutes required by state law.

BNSF has disputed the state regulator’s findings. A hearing is scheduled for January.

Six major oil train derailments this year across North America have demonstrated the continued risks of large volumes of crude oil moving by rail.

Four of those derailments occurred in just four weeks in February and March: two in Ontario, one in West Virginia and another in Illinois. All involved large spills, fires and explosions, but no serious injuries.

Two less serious oil train derailments have occurred since, in North Dakota in May and Montana in July.

600,000   Number of gallons of oil spilled from trains
so far this year.

The rail industry and its regulators have been under pressure from lawmakers and the public to fix tank car vulnerabilities and take more steps to prevent derailments from happening.

The U.S. Department of Transportation issued its final rule on tank car standards for trains carrying oil, ethanol and other flammable liquids on May 1.

The new rule requires a tougher design for the tank cars, including thicker shells, more puncture resistance and thermal insulation to protect against prolonged exposure to fire.

It also requires existing tank cars be retrofitted to meet the new standards, depending on the level of hazard, within two to 10 years. Industry groups have challenged the new rule in court, saying it doesn’t give them enough time to complete the retrofit. Environmental groups have sued as well, saying it gives the industry too much time.

This year is already the second worst for oil spilled from trains since the federal government began collecting data 40 years ago.  A McClatchy analysis of the data last year found that trains spilled about 1 million gallons in 2013 alone, vs. 800,000 in all the prior years combined.

More than 600,000 gallons of oil has spilled from trains so far this year, according to a new analysis of data from the Pipeline and Hazardous Materials Safety Administration.

Wohlfeil writes for the Bellingham Herald and reported from Bellingham, Wash.

BENICIA HERALD LETTER: Thanks for opposing views of Valero Crude-by-Rail Project

Repost from the Benicia Herald
[Editor:  No link is provided for this letter because the Benicia Herald does not publish Letters in its online edition. – RS]

Thanks for opposing views of Valero Crude-by-Rail Project

By Georgia Taylor Benedict, September 1, 2015, Benicia Herald

Thank you for two thought-provoking columns in the Sunday, Aug. 30 (“Benicia: Not exactly a smart, green city,” by Grant Cooke and “Crude by rail can be solution to Benicia’s budget woes,” by Dan Broadwater).  Mr. Cooke and Mr. Broadwater presented opposing view of the Valero Crude-by-Rail Project.  What was obvious was that Mr. Cooke’s analysis was far more inclusive than that of Mr. Broadwater.

The most obvious point Mr. Broadwater (writing in favor of crude by rail) failed to address was the inherent and demonstrated danger to communities, waterways, wildlife and natural habitats caused for transporting highly volatile Bakken crude over thousands of miles.  Trains derail, leak, and spill fuel and highly toxic crude oil with what appears to be alarming frequency.

The risk to the city of Benicia of a deadly explosion or highly polluted air if this project is approved is not a matter of if but when.  To support this project because it may create 20 long-term jobs is laughable.

I sincerely hope that our elected city officials will deny Valero’s proposal after due consideration.  To fail to do so could be catastrophic for our lovely town.

BENICIA HERALD: Long-awaited reissue cites ‘significant’ environmental impacts; public given 45 days to comment

Repost from the Benicia Herald

Revised, expanded crude-by-rail report released

Long-awaited reissue cites ‘significant’ environmental impacts; public given 45 days to comment

By Nick Sestanovich, September 1, 2015

“Because no reasonable, feasible mitigation measures are available that would, if implemented, reduce the significance below the established threshold, this secondary hazards- and hazardous materials-related impact would be significant and unavoidable.”  – The Recirculated Draft Environmental Impact Report on Valero’s Crude-by-Rail Project

The long-awaited revision of the draft Valero Crude-by-Rail Project Environmental Impact Report was released Monday, almost a full year after California’s attorney general and others publicly challenged the scope and accuracy of the document.

The new report cited additional negative environmental effects of the project pertaining to air quality, greenhouse gases, protected species and more, expanding its scope to cover impacts for more “uprail” communities — and finding “significant and unavoidable” effects that would result from approval of the project.

The “recirculated” report (RDEIR) is just the latest development in Valero’s three-year battle to bring crude oil deliveries to its Benicia refinery by train. The proposal for a use permit to extend Union Pacific Railroad lines into its property so crude oil could be delivered by rail car, initially submitted to Benicia Planning Commission in late 2012, triggered an uproar over environmental and safety concerns, which prompted the drafting of an Environmental Impact Report.

The document, released in 2014, was criticized by many, including Attorney General Kamala Harris and state Sen. Lois Wolk, D-Davis, who felt the report’s focus on the 69 miles of rail between Benicia and Roseville didn’t adequately convey the scope of the project’s potentially negative impacts.

The RDEIR addressed these concerns by expanding the range of its focus beyond Roseville to three new routes: the Oregon state line to Roseville; the Nevada state line to northern Roseville; and the Nevada state line to southern Roseville.

In the process, the report uncovered more significant environmental impacts.

The refinery has said it expected 50 to 100 additional rail cars to arrive up to twice a day, brought in at a time of day when there would be little impact on traffic. The trains would carry 70,000 barrels of North American crude each day, replacing shipped barrels from foreign sources, the refinery said in its use permit application.

The DEIR had initially noted that greenhouse gas emissions generated by the Crude-by-Rail Project would be “less than significant.” The RDEIR updated the risk level of direct and indirect greenhouse gas emissions to “significant and unavoidable,” specifically if trains used the line from Oregon to Roseville, which would travel a round-trip distance of 594 miles per day.

Additionally, the RDEIR found that the project would conflict with Executive Order S-3-05, signed by Gov. Arnold Schwarzenegger in 2005, which aims to reduce greenhouse gas emissions to 80 percent below 1990 levels by 2050.

The revised report also found that nitrogen-oxide levels would increase in the Yolo-Solano region, among other areas, and that nitrogen emissions in Placer County “would exceed the cumulative 10-pounds-per-day significance threshold.”

Biological resources are another area of concern. According to the report, crude-by-rail trains could have “potential impacts to biological resources along any southern route,” that “could include collision-related injury and mortality to protected wildlife and migratory bird species.”

Finally, the RDEIR said, other hazards exist: If a train were to crash and result in a small oil spill, there would be a 100-percent chance of 100 gallons or more being released. Similarly, should a train crash in a high fire danger area, the risks would be inevitable.

As the report notes, “Because no reasonable, feasible mitigation measures are available that would, if implemented, reduce the significance below the established threshold, this secondary hazards- and hazardous materials-related impact would be significant and unavoidable.”

Conversely, other areas of concern such as noise pollution and earthquakes, were found to have little or no significant impact.

“Valero’s effort to rush through their dangerous project and their long record of constant violations and fines of Bay Area Air Quality Management District emissions rules give many of us pause to reflect on the many risks associated with this project,” said Andres Soto, a Benicia resident and member of Benicians for a Safe and Healthy Community, a group formed to opposed the Crude-by-Rail Project.

“It is only due to the volume and detail of scope of all of the public comments received on the original Draft Environmental Impact Report (DEIR) that Benicia chose to recirculate a seriously flawed DEIR. California Attorney General Kamala Harris and many uprail communities, as well as many Benicians, including BSHC, identified many critical shortcomings with the original DEIR.

“Valero has shown nothing but intransigence and misinformation in the face of this opposition to its flawed proposal, thus we do not expect much to have changed in the RDEIR from the DEIR that would convince us that Valero and Union Pacific Railroad can make this project safe enough for Benicia. The risk of catastrophic explosions along the rail line and in Benicia, and the plan to process dirtier extreme crude oils strip-mined from Canadian tar sands and fracked in the Bakken shale formation is just too dangerous for our safety and our environment.

“We hope that after thoroughly reviewing the RDEIR, our Planning Commission and City Council will have the wisdom to deny this project for the good of Benicia, our neighboring communities and the good of our planet.”

A Valero representative was asked to comment on the newly released report but did not respond by press time Monday.

Copies of the RDEIR are available at Benicia Public Library, 150 East L St.; at the Community Development Department at Benicia City Hall, 250 East L St.; and as a PDF download on the city’s website, www.ci.benicia.ca.us.

Public comments on the RDEIR will be accepted by the city until Oct. 15 at 5 p.m. Comments may be submitted in writing to Amy Million, principal planner of the Community Development Department, 250 East L St., Benicia, CA 94510; or they may be given at formal public hearings on the project by Benicia Planning Commission, the first of which will be at 6:30 p.m. Sept. 29 at City Hall.

Additional Planning Commission meetings to receive comments on the RDEIR are scheduled for Sept. 30, Oct. 1 and Oct. 8.