Tag Archives: Bakken crude

Bakken Crude, Crude By Rail, Derailment, Emergency Readiness & Response, Oil spill, Rail defect, Rail infrastructure, Rail inspection, Rail Safety, Sun kink

Buckled tracks: heat caused 2 Montana oil train derailments

Repost from the Billings Gazette
[Editor:  Note the industry terminology: “BNSF attributes the July 16 incident…to ‘thermal misalignment,’ also known as sun kink, which occurs when rail tracks expand when heated and buckle.”  …Will we see more of this with global warming?  – RS]

Heat caused Montana train derailments, BNSF says

By Amy Dalrymple, Forum News Service, Nov 4, 2015
Culbertson derailment
Derailed tanker cars lie off track near Culbertson on July 17. The tank cars were hauling fuel from North Dakota and derailed Thursday in rural northeastern Montana, authorities said. Associated Press

CULBERTSON — Two July train derailments in Eastern Montana, including one that spilled 35,000 gallons of Bakken crude, were caused by tracks that buckled in the heat, according to BNSF Railway.

BNSF attributes the July 16 incident that caused 22 oil tankers to derail east of Culbertson to “thermal misalignment,” also known as sun kink, which occurs when rail tracks expand when heated and buckle.

The company also attributes the same cause to the July 14 train derailment about 10 miles west of Culbertson, said BNSF spokesman Matthew Jones.

The Federal Railroad Administration said Tuesday the agency’s investigation into the derailments is still ongoing.

BNSF reported to the FRA that the two derailments caused $3.2 million in damage, including nearly $2 million in equipment damage and more than $1.2 million in track damage.

In the July 16 incident, a westbound train containing 106 crude oil tankers that had been loaded in Trenton, N.D., derailed about five miles east of Culbertson. Twenty-two tankers derailed, with five cars releasing oil, according to information submitted to the FRA.

BNSF and contractors recovered the spilled oil and removed and replaced about 3,900 cubic yards of contaminated soil, Jones said.

On July 14, nine cars on an eastbound mixed merchandise train derailed west of Culbertson, but the cars remained upright and did not cause a spill.

BNSF inspects tracks and bridges more frequently than required by the FRA, including visual inspections and inspections using rail cars equipped with advanced technology, Jones said.

Meanwhile, a legislative audit released last week highlights weaknesses in Montana’s oversight of rail safety, calling attention to a lack of emergency response resources in northeast Montana.

The report by the Montana Legislative Audit Division said the state’s rail safety inspection program is not adequate and first-responders are not adequately trained and equipped to respond to incidents involving hazardous materials.

Northeast Montana does not have a regional hazmat team, primarily due to a lack of hazmat trained and equipped firefighters and the lack of a full-time, salaried fire department, the report said. The closest hazmat team is in Billings, 300 miles from Culbertson.

When a new oil transloading facility in East Fairview, N.D., is at full capacity, Montana may see as many as 40 oil trains each week, the report said.

Montana’s Public Service Commission, which discussed the audit during a meeting Tuesday, would need statutory authority and resources from the state Legislature to expand its oversight of rail safety, said Eric Sell, a spokesman for the agency. Sell noted that the Federal Railroad Administration has primary oversight of rail safety.

BNSF train derailments that were caused by the tracks occurred at a rate of 0.38 incidents per million train miles last year, Jones said, noting the rate is 50 percent better than 10 years ago.

Another recent train derailment involving Bakken crude near Heimdal, N.D., remains under investigation by the National Transportation Safety Board. Six oil tankers derailed and four caught fire in May.

Bakken Crude, Crude By Rail, Derailment, Evacuation, Explosion, Fire

North Dakota Town Moving Forward After Oil Train Derailment, Explosion

Repost from KFYR-TV, Bismarck, ND

Heimdal Residents Move Forward After Oil Train Derailments

By Megan Mitchell, Nov 03, 2015 9:55 AM

Six months ago Heimdal, N.D., made headlines for a oil train derailments. The accident forced the evacuation of the entire town. The National Transportation Safety Board (NTSB) continues to investigation the incident and is focusing on wheel fragments recovered at the scene.

No cause for the crash has been identified at this point.

The NTSB has sent the evidence the collected to a metallurgy testing lab in Washington, D.C. Metallurgists specialize in the physical and chemical behavior of metals. Their examination could take another year to complete. In the meantime, residents of Heimdal have returned to their homes and routines.

Sparky is an affectionate 9-year-old border collie cross. His friendly disposition is second only to the loyalty he has for his owners Arden and Linda Georgensen.

Arden Georgensen is a resident of Heimdal and says the dog never leaves his wife’s side.

“If I can’t find her in the yard I can find the dog. He’s always with her,” Arden said.

On May 6, 2015 neither Linda or Arden could find Sparky when they were forced to evacuate their home without their beloved dog.

“I saw this big plume I thought it was a tornado the way it looked because it was swirling,” Arden said.

An oil train derailed just half a mile from their farm, spewing 60,000 gallons of Bakken crude. That’s when firefighters came knocking.

“They said you need to get out right now ’cause if those tanks explode it’s hard to say what’ll happen out here,” Arden said.

It was a long night wondering whether Sparky would be there when they returned.

Linda went back the next morning and was overjoyed.

“It was a good feeling to see him laying there ’cause when we got home here he was by the door like usual,” Linda said.

Oil production in the Bakken has drastically declined, but tanker trains continue to roll through Heimdal every day. Despite what happened there, residents say they’re not overly concerned when they hear an engine whistle sound.

Curt Benson saw the oil train derail and was the first person to contact emergency management.

“It’s still a concern, but yeah, if you’re only getting five trains a day instead of 20 trains a day sure it’s a little less of a concern,” Benson said.

Other residents aren’t sidetracked by worry.

“You just have that risk. There’s a certain amount of risk just being alive,” Bill Ongstad said.

BNSF is still cleaning up the site, but it appears the landscape around Heimdal is almost restored.

“I have to say they did a pretty bang up job. I think seeing all of them come out here with all the equipment and the time they put in, it certainly makes you feel confident that they probably did a good job,” Benson said.

The 22 residents of Heimdal and Sparky are living in the moment and moving on.

The NTSB said the wheel fragments from the accident were sent to those metallurgy labs two and a half weeks ago.

The agency says they look at everything associated with this accident and no conclusions have been drawn.

Flag as irrelevant

 

Bakken Crude, Crude By Rail, Oil imports, Oil prices

East coast refineries slash deliveries of Bakken crude oil

Repost from Reuters
[Editor:  Significant quote: “EIA data shows PES imported more than double the amount between January and July, with cargoes from Nigeria, Chad and Azerbaijan.”] 

U.S. oil refiners look abroad for crude supplies as North Dakota boom fades

By Jarrett Renshaw and Catherine Ngai, November 3, 2015 12:52pm EST
Gasoline-making unit at a PBF Energy Inc refinery in Delaware City, Delaware August 21, 2015. REUTERS/Charles Mostoller - RTX1P4UV
Gasoline-making unit at a PBF Energy Inc refinery in Delaware City, Delaware August 21, 2015. REUTERS/Charles Mostoller

PBF Energy Inc, one of the largest independent oil refiners in the United States, spent heavily in recent years to build the rail terminals at its Delaware City complex that it needed to take delivery of large loads of crude coming from North Dakota’s Bakken oil fields.

But now it is considering eliminating those deliveries altogether, and replacing them with foreign crude imports, according to two sources familiar with the situation. It has even closed its small Oklahoma City office that was only opened in 2013 and had served as a hub for the company’s trading in North Dakota’s oil, the sources said.

The sudden lack of interest in Bakken crude by PBF, which is run by Thomas O’Malley, one of the biggest names in the U.S. oil refining industry, reflects a dramatic recent change in the way East Coast refineries are sourcing the crude that they turn into everything from gasoline to heating oil and jet fuel.

The boom in the output of oil from North Dakota’s shale has ebbed as producers have begun to cut back in the face of the plunge in prices by nearly 60 percent since the summer of 2014.

North Dakota’s Bakken production peaked at 1.153 million barrels per day in June, and had fallen to 1.13 million barrels per day by August, according to state data.

The supply restraint has made Bakken crude relatively more expensive after transport costs than oil shipped from Latin America, the Middle East and Africa, prompting East Coast refiners to return to a foreign crude diet they derided as unprofitable five years ago.

Three companies that resuscitated failing oil refineries on the East Coast less than five years ago with the promise of cheap domestic oil are now looking overseas instead, four sources familiar with the plans told Reuters.

Together, PBF, Philadelphia Energy Solutions Inc and Delta Airline’s Monroe Energy are expected to cut their Bakken crude intake to the lowest levels since 2013, according to two oil traders who are familiar with East Coast rail arrangements.

PES, which bought a 335,000 barrel-a-day Philadelphia refinery that was slated for closure in 2012, has slashed its Bakken deliveries to just 17 trains in November from a peak of 100 trains a month during the summer, according to two sources familiar with the plant’s operations.

The planned deliveries mark the lowest monthly volume since the company built a new rail terminal to take advantage of the Bakken revolution. EIA data shows PES imported more than double the amount between January and July, with cargoes from Nigeria, Chad and Azerbaijan.

LOCKED INTO PAYING

The price of Bakken hasn’t fallen as much as other oil, nearly wiping out the entire $6 a barrel discount to the U.S. benchmark that it traded at in January and sending refiners scrambling for other sources. Meanwhile, a glut of other crudes has made importing – including transport costs of $2 to $3 a barrel – much more attractive.

Because bringing crude by rail from North Dakota to an East Coast refinery usually costs about $10 to $11 a barrel, without a deep discount for the oil, moving it across the country becomes unprofitable. As a result, Bakken crude is used in the U.S. Midwest and Canada where lower transportation costs make it a profitable option.

East Coast refineries accounted for about 10 percent of nationwide imports of crude in July, according to the latest data from the U.S. Energy Information Administration. That is expected to rise as the Bakken shipments fall further, analysts and traders say.

PBF had poured over $50 million into upgrading its Delaware City rail terminal and signed long-term volume commitments to unload at least 85,000 barrels per day from trains at a fixed $2 a barrel cost, regardless of whether it takes the oil. As a result, the company is locked into paying $170,000 a day.

In a conference call late last week, PBF disclosed that it is only budgeting to take 25,000 barrels a day of Bakken oil delivered by rail at its East Coast refineries in 2016.

The company’s spokesman Michael Karlovich said in an email that the company was transferring its single employee in the Oklahoma office to its headquarters in New Jersey, but declined to provide additional detail about the company’s Bakken strategy.

PBF’s Delaware City refinery imported about twice as much crude in July as in January, bringing in cargoes from Colombia and Peru, according to data from the U.S. Energy Information Administration. The company’s Paulsboro, New Jersey, refinery increased its imports by 50 percent in the same period.

PES declined to comment on the shifting crude slate, while Monroe Energy did not respond to requests for comment.

The refiners had previously found that relying on crude from the likes of Colombia, Mexico and Saudi Arabia was unprofitable. But now it may be different provided Bakken crude remains relatively expensive and the U.S. economy doesn’t head into a downturn.

That’s because the refiners are buoyed by increased U.S. fuel demand, partly because of the low oil prices. In 2010, demand was shrinking.

Additionally, they are supported by the closure of underperforming refineries in the Atlantic Basin during the last downturn. And then there is the current availability of deeply discounted crude oil from overseas.

“They are looking for the lowest cost supplies,” said Sandy Fielden, an analyst with RBN Energy. “A few years ago, that was North Dakota, but not today.”

(Reporting By Jarrett Renshaw and Catherine Ngai; Editing by Jessica Resnick-Ault and Martin Howell)
Bakken Crude, Clean-up costs, Derailment, Explosion, Oil prices, Pipeline infrastructure, Pipeline rupture, Pipeline transport, Tar sands crude

Dangerous energy gamble: Pipelines vs. rail

Repost from the Washington Examiner
[Editor: One significant quote among many: “In the last five years, 423 oil trains have crashed in the U.S. Since 2010, those crashes have cost about $45 million in damages. In just the first six months of 2015, 31 oil train crashes cost almost $30 million in damages…. It’s 5.5 times more likely that oil will be spilled during rail transport than from a pipeline, according to a study by the Fraser Institute, an independent Canadian think tank. The risk of deaths, injuries and spills are higher with rail and trucks since vehicles can hit other vehicles, they travel through population centers and the drivers can err. None of those factors exist for pipelines.” – RS]

Dangerous energy gamble: Pipelines vs. rail

By Kyle Feldscher, 11/2/15 12:01 AM
Fire burns at the scene of a train derailment, near Mount Carbon, W.Va., on Feb. 16. Fires burned for nearly nine hours after the train carrying more than 100 tankers of crude oil derailed in a snowstorm. (AP Photo/WCHS-TV)

Energy companies increasingly have turned to rail to ship crude oil during the fracking boom, but with train crashes becoming more frequent, they are pushing for construction of more pipelines beyond the Keystone XL.

However, that effort is being stymied by the collapse of oil prices and concerns about pipeline safety.

On Wednesday, Shell announced it would stop construction on a site in Alberta, Canada, that potentially holds 418 million barrels of bitumen oil. The company blamed the project’s expense in a time of cheap oil as well as a lack of pipeline infrastructure.

It’s one example of low prices and lack of pipelines prompting companies to reconsider drilling for oil, especially in the Canadian tar sands, where it’s more expensive to drill. Pipeline transportation is typically cheaper than rail, which costs about $30 a barrel more.

Fifty pipelines have been proposed to the Federal Energy Regulatory Commission this year. They would carry the light, sweet crude from shale regions as well as the natural gas that has helped make the U.S. the world’s energy leader. ”

Because of the costs associated with [rail], it’s going to drive up the cost of oil and it’s going to be significantly higher than pipelines on a per barrel basis,” said Dan Kish, senior vice president for policy at the conservative Institute for Energy Research.

Another calculation oil companies must make is the safety of their highly flammable product.

In the last five years, 423 oil trains have crashed in the U.S. Since 2010, those crashes have cost about $45 million in damages. In just the first six months of 2015, 31 oil train crashes cost almost $30 million in damages, mostly due to a major crash in West Virginia.

It’s 5.5 times more likely that oil will be spilled during rail transport than from a pipeline, according to a study by the Fraser Institute, an independent Canadian think tank. The risk of deaths, injuries and spills are higher with rail and trucks since vehicles can hit other vehicles, they travel through population centers and the drivers can err. None of those factors exist for pipelines.

The August study also found oil and natural gas production is rising faster than existing American and Canadian pipelines can handle. Those pipelines would be even busier if production increased in the Canadian tar sands.

Keystone XL, proposed by TransCanada in 2007, would be able to transport 830,000 barrels per day from the tar sands to the Gulf Coast to be refined. Due to the viscous nature of bitumen oil, it’s much easier to transport it by pipeline than by rail, experts say.

When a train carrying oil derails, it’s often catastrophic.

In West Virginia, oil burned for days after 26 oil tanker cars derailed in February. Nineteen of those cars caught on fire and oil spilled into a nearby river. The damages from that crash totaled more than $23 million.

A train derailment in a Quebec community that killed 46 people in July 2013 prompted calls for better rail safety and led some to question whether to transport highly flammable oil at all.

The State Department estimates rail transportation of oil is responsible for 712 injuries and 94 deaths per year, while oil pipelines are responsible for three injuries and two deaths per year.

“For our society, we have to evaluate the value we place on human life and we should make that a priority,” said Diana Furtchgott-Roth, a conservative economist who is the director of the Manhattan Institute’s e21 program.

“The families of those 46 people killed in Lac-Megantic would have been happy to have less oil and having the lives of their family members back.”

Dangerous derailments led the Obama administration to introduce new regulations to make tanker cars safer. The rule, announced in May, requires improvements to braking systems, making tanker cars thicker and more fire resistant and new protocols for transporting flammable liquids.

The number of crashes steadily increased during the last five years, as more trains shipped crude and natural gas, rising from nine crashes in 2010 to 144 crashes in 2014. But as the price of oil plummeted, the amount of crude oil being drilled and shipped leveled off in 2015, according to the Energy Information Administration.

If drilling in the Canadian tar sands in Alberta were to pick up in earnest, State Department officials believe rail transport would lead to 49 more injuries and six more deaths per year. If that oil were to be moved by the Keystone XL pipeline, there would be one additional injury and no fatalities.

Environmentalists, who have been fighting the Keystone XL, point to the State Department’s finding that pipeline spills are often bigger than those from trains and trucks.

They also point to declining oil use and the collapse of prices as great excuses to leave it in the ground.

Zach Drennen, legislative associate at the League of Conservation Voters, said with oil prices as low as they are, it’s economic folly for oil companies to drill in the Canadian tar sands. Without high oil prices, companies can’t afford to build pipelines. They also can’t afford to ship by rail.

That is why green groups think oil companies could be willing to leave the oil in the earth.

“If you look right now, a lot of oil companies are just deciding that’s not where they want to put their money at,” Drennen said.

To Kish, environmentalists’ goal is to make it too expensive to drill.

“They’re going to try and fight against every damn pipeline they can,” he said, “because if they can choke off production and delay construction of pipelines, it causes disruptions.”

But Ken Green, senior director of natural resource studies at the Fraser Institute, said environmentalists’ dream of keeping oil in the ground isn’t feasible.

“The oil in the ground has a market value and everyone knows what the market value is,” he said. “It’s not hard to calculate that market value … My assumption is sooner or later, that value will be sought.”