Tag Archives: Burlington Northern Santa Fe (BNSF)

Bakken Crude, Crude By Rail, Derailment, Emergency Readiness & Response, Evacuation zone, Explosion, Oil stabilization, Rail inspection, Rail routing, Railroad crossings, Tank car design

Reroute oil trains? History suggests it’s a long shot

Repost from The Star Tribune, Minneapolis MN

Reroute oil trains? History suggests it’s a long shot

By Jim Spencer, March 21, 2015 – 8:22 PM

Industry says reinforced cars on current routes are better than trying to avoid heavily populated areas.

A train carried Bakken oil past St. Paul. Federal rules say a single tanker car spill and fire would require a half-mile evacuation. Photo: Star Tribune

WASHINGTON – Last week, U.S. Sen. Al Franken asked the Federal Railroad Administration to consider rerouting trains carrying volatile Bakken crude oil from North Dakota so they do not pass through Minnesota’s biggest cities.

For Franken, the possibility of rerouting is an integral part of a comprehensive response to a recent rash of fiery oil train derailments that also includes stabilizing Bakken crude before it is loaded into stronger tanker cars.

For the nation’s powerful railroad lobby, however, rerouting is an unwarranted intrusion into a rail safety system that the industry says works.

Government-ordered rerouting of private rail traffic is not exactly a snowball in hell. It is more like a blizzard in Bahrain — possible, but unprecedented.

In Minnesota and around the country, “rerouting issues ought to be high on everyone’s agenda,” said rail safety expert Fred Millar, who fought unsuccessfully against railroads to move chlorine trains out of the District of Columbia. “But rerouting has been pushed off the table.”

Congress created the Federal Railroad Administration in 1966. In nearly half a century it does not appear to have forced any railroads to reroute trains around big cities for safety reasons, despite computer modeling that estimates routing changes could lower citizens’ risks to hazardous materials derailments by 25 to 50 percent and reduce casualties in an actual derailment by half.

The Minnesota Department of Transportation (MnDOT) last week estimated that 326,170 state residents live within a half-mile of rail routes that carry oil from North Dakota across Minnesota. A half-mile is the federal emergency response evacuation zone required in the event of a single tanker car spill and fire. Multiple-car fires require up to a mile evacuation.

MnDOT data shows that 156,316 of the Minnesotans subject to evacuation in an oil train derailment live in the Twin Cities metro area. Most North Dakota oil trains enter Minnesota at Moorhead, then travel on BNSF Railway and Canadian Pacific Railway tracks into the Twin Cities before turning south along the Mississippi River and east across Wisconsin. A few oil trains travel through western Minnesota into Iowa.

Although the National Transportation Safety Board has backed rerouting in some circumstances, federal laws passed in 2007 grant private rail companies wide latitude in determining when and where trains should move, even trains carrying hazardous materials.

Canadian Pacific did not comment specifically on rerouting trains in Minnesota, but in an e-mail to the Star Tribune, the railroad said it has voluntarily complied with the federal government’s Crude by Rail Safety Initiatives and performed “route risk assessments.”

BNSF, the largest crude-by-rail hauler out of North Dakota, declined to comment on rerouting and referred questions to the rail industry’s major trade group, the Association of American Railroads.

An AAR spokesman said the industry opposes re-routing oil trains because the existing routes are the safest, even when they pass through urban areas. The industry supports more structurally secure tanker cars, track inspections and training of emergency response teams, said AAR media relations director Ed Greenberg.

BNSF also has invested heavily in track improvements to increase safety along its existing Minnesota oil train routes.

“We’re using routing technology called the Rail Corridor Risk Management System developed by the federal government,” Greenberg said. The technology measures 27 factors — including population density — to determine the safest route for moving hazardous materials, including crude oil, Greenberg said.

“Rerouting isn’t the answer,” he maintained. “All it has accomplished in the past is to force rail traffic through other communities on tracks not built to accommodate products like crude oil.”

The Federal Railroad Administration declined to discuss rerouting oil trains in Minnesota. In an e-mail statement, acting administrator Sarah Feinberg said of Franken’s request: “Over the past 18 months we have taken more than a dozen actions to enhance the safe transport of crude oil while working on a comprehensive rule that is now in its final stages of development.”

The state has little say in the rerouting debate. “The railroads are regulated by the federal government,” Minnesota Department of Transportation spokesman Kevin Gutknecht said. “The state does not have the authority to move, or reroute, rail lines.”

Rerouting trains away from the Twin Cities is not part of a rail safety initiative unveiled March 13 by Gov. Mark Dayton. That proposal calls for spending $330 million over 10 years, much of it in greater Minnesota, mainly to make road-rail crossings safer and to improve emergency response.

Bakken Crude, Crude By Rail, Oil Industry, Oil producers, Rail industry

Crude oil joins rail industry staples as key revenue producer

Repost from Reuters

Crude oil joins rail industry staples as key revenue producer

By Jarrett Renshaw, Mar 16, 2015 2:05pm EDT

(Reuters) – U.S. railroads generated almost as much money last year hauling crude oil and sand, largely used in hydraulic fracturing, as they did moving industry staples like field crops and motor vehicles, according to a Reuters’ analysis of newly released federal data.

The previously unreported company data submitted to the U.S. Department of Transportation provides the latest piece of evidence of the blossoming marriage between the energy and rail industries, forged on the back of the U.S. shale oil boom.

Led by Berkshire Hathaway-owned BNSF Railways, the seven largest railroads operating in the United States generated $2.8 billion in gross revenue from hauling crude oil in 2014, up nearly 30 percent from 2013, according to company data filed with the federal government and released earlier this month.

The $2.8 billion figure puts crude oil in sixth place among similarly classified products, trailing industry standards like coal, field crops and motor vehicles, the analysis shows. Sand and gravel, an often overlooked winner in the shale boom, generated $2.7 billion last year in gross revenue.

Crude oil provides the biggest return on a per-carload basis, drawing $5,700 in gross revenue for each car that originated on the network, more than double than what coal brings.

The continuing financial success comes as the industry faces threats from a massive drop in oil prices and impending new U.S. regulations aimed at public safety that could impose additional costs.

“Will the major carriers go belly up? No,” said Barton Jennings, a professor of supply chain management at Western Illinois University. However, short-line cariers that rely upon crude for the bulk of their business may be exposed, he said.

Overall, the seven major carriers reported U.S. profits of $14.4 billion last year, led by Union Pacific and BNSF, which combined accounted for 67 percent of the industry’s U.S. profits, the analysis shows.

KING CRUDE

The biggest player in the U.S. crude rail business is BNSF, which dominates North Dakota, home to the Bakken shale.

BNSF’s gross revenue from crude oil rose to $1.48 billion from $63 million in 2010. Gross revenue from hauling sand and gravel climbed to $651 million last year, a more than 300 percent jump from 2010.

The growth in crude and sand hauling helped BNSF boost profits, which climbed from $2.6 billion in 2010 to $4.4 billion last year.

(Reporting By Jarrett Renshaw; Editing by Jessica Resnick-Ault and Jonathan Oatis)
Bakken Crude, Crude By Rail, DOT-111, Oil Industry, Rail industry

Refiners’ Association sues railroad over fee on oil loaded in older tank cars

Repost from McClatchy DC
[Editor:  Incredible: The complaint says, “Despite BNSF’s distaste for the DOT-111 cars, (emphasis added) they are authorized bulk packaging for crude oil service.”  “Distaste?”  Really!  Oh, and … the BNSF surcharge would suggest that $1000/car will help exactly whom if/when the next explosion occurs?  Surely not those whose bodies and livelihoods are incinerated.  See this story also at Bloomberg Business News and Courthouse News Service.  – RS]

Refiners sue BNSF over fee on oil loaded in older tank cars

By Curtis Tate, McClatchy Washington Bureau, March 16, 2015

A trade group representing oil refiners has sued the nation’s largest hauler of crude oil in trains over a surcharge for oil loaded into older tank cars that have punctured and ruptured in numerous derailments.

The American Fuel & Petrochemical Manufacturers, a trade association for producers of gasoline, jet fuel, home heating oil and other refined products, sought an injunction last week in U.S. District Court in the Southern District of Texas to block BNSF Railway from imposing a $1,000 surcharge for every DOT-111 model tank car loaded with crude oil.

Tens of thousands of DOT-111 cars have carried a surge in domestic energy production, but their poor safety record in oil and ethanol train derailments has drawn fresh scrutiny from regulators, lawmakers and the National Transportation Safety Board.

BNSF hauls 600,000 barrels a day of crude oil, mostly from North Dakota’s Bakken region, to refineries on the east and west coasts. In October, the railroad announced it would impose a $1,000 surcharge on oil shipped in DOT-111 tank cars, effective Jan. 1.

But the trade group, which represents more than 400 companies, said in its complaint that BNSF asserted “unlawful regulatory authority” when it began imposing the surcharge.

The U.S. Department of Transportation regulates rail transportation, and until regulations require tank cars of a different design for oil shipments, the group’s complaint says that BNSF and other railroads are obligated by law to accept them in whatever cars the government currently allows.

“Despite BNSF’s distaste for the DOT-111 cars,” the complaint says, “they are authorized bulk packaging for crude oil service.”

One DOT-111 tank car holds about 30,000 gallons, or 700 barrels of oil. The complaint says the $1,000 surcharge adds $1.50 per barrel in rail transportation costs.

The trade group’s complaint says that BNSF’s surcharge causes “direct and substantial harm” to its clients and “breaches BNSF’s common carrier duty to ship hazardous materials.” By law, railroads must provide rail transportation on reasonable request.

The Pipeline and Hazardous Materials Safety Administration submitted a new design for tank cars to the White House Office of Management and Budget for review in January.

Four crude oil trains have derailed and caught fire across North America since mid-February. One of them was a BNSF train that derailed earlier this month near Galena, Ill.

In all four derailments, the tank cars were a modestly improved version of the DOT-111.

Bakken Crude, Crude By Rail, Public safety funding, Rail infrastructure

Minnesota Gov. Dayton pressures railroads to pony up for safety upgrades

Repost from The Mineapolis StarTribune

Dayton pressures railroads to pony up for safety upgrades across Minnesota

By: Kyle Potter, Associated Press, March 13, 2015 – 3:45 PM

ST. PAUL, Minn. — Gov. Mark Dayton gave railroad companies and Republicans a public tongue-lashing Friday for their resistance to his tax plan to fund safety improvements across Minnesota’s railroad network.

Seven trains haul North Dakota crude across Minnesota daily — an influx that has contributed to backlogs of agricultural shipments and raised safety concerns after a string of recent explosive derailments.

With a throng of officials from towns dealing with the headaches of heavier train traffic behind him, Dayton called it “totally unacceptable” that railroads would oppose contributing more money to the state’s safety efforts. The governor and other fellow Democratic lawmakers have proposed a series of tax increases and annual fees on railroads to upgrade railroad crossings and ease congestion across Minnesota.

“That is the responsibility of the railroad,” Rep. Paul Marquart, DFL-Dilworth, said of improvements.

By taxing train cars and levying an annual fee on Minnesota’ four major freight railroads, the state would net $330 million over the next decade, mostly for improvements at railroad crossings. Dayton’s plan would also fund increased training for first responders, including a new statewide training facility.

The governor is also planning to carve out $76 million from a bonding bill this year to build underpasses or overpasses in Moorhead, Prairie Island, Coon Rapids and Willmar, where passing trains block crossings for hours every day.

Railroad companies such as BNSF Railway, the state’s largest freight railroad and a major shipper of Bakken crude, balked at the governor’s proposal. In a statement, spokeswoman Amy McBeth said the company believes Dayton’s proposed taxes violate federal law “because they single out railroads for discriminatory taxation.”

The other three major freight railroads operating in Minnesota are Canadian Pacific, Union Pacific and Canadian National.

Majority House Republicans have also signaled they’re not on board with the tax increases.

“While the governor and I agree that our railroad crossings need improvements, the funding source is still the main issue,” said Rep. Tim Kelly, the Republican chair of the House Transportation Finance committee.

Dayton criticized Republicans for not supporting his plan, but he saved his strongest words for the railroad companies.

The governor said state officials believe they’re on solid legal ground to foot railroads with a larger tax bill. And he remained defiant in the face of a possible lawsuit from railroads if his proposal goes ahead.

“We’re going to do what we know is right for Minnesota. If they want to take us to court, that certainly shows their true colors,” Dayton said.