Tag Archives: Canada

Repost from The Columbian
[Editor: An important local study, calling for better disaster preparedness. Significant quote – “…oil trains travel through three significant zones in Seattle: passing within blocks of two stadiums, through the downtown tunnel, and along the north end, which has limited access because of high banks along the waterfront.” – RS]

Oil trains called hazard in old Seattle tunnel

Report says railroad, city must prepare to limit a catastrophe

By PHUONG LE, Associated Press, September 16, 2014

A long line of rail tanker cars sits on tracks south of Seattle, Tuesday, Sept. 16, 2014. In a report to the Seattle City Council, city emergency planners say more must be done to lower the risk of a possible oil train accident and improve the city’s ability to respond. (AP Photo/Ted S. Warren) (Ted S. Warren/AP)

SEATTLE — With increasing numbers of trains carrying volatile crude oil through Seattle’s “antiquated” downtown rail tunnel, city emergency planners say more must be done to lower the risk of an oil train accident and improve the city’s ability to respond.

In a report to the Seattle City Council, emergency managers warned that an oil train accident resulting in fire, explosion or spill “would be a catastrophe for our community in terms of risk to life, property and environment.”

BNSF Railway can make immediate safety improvements in the mile-long 100-year-old rail tunnel that runs under downtown Seattle, including installing radio communication, a fire suppression system to release water and foam, and a permanent ventilation system, according to the report written by Barb Graff, who directs the city’s office of emergency management, and Seattle assistant fire chief A.D. Vickery.

About one or two mile-long trains a day carrying shipments of crude oil from the Bakken region of North Dakota, Montana and Canada through the city of about 630,000 residents.

Several refineries in the state are receiving shipments of crude oil, and the others are upgrading facilities to accept oil trains. Once refineries are able to accommodate additional shipments, three or more trains could pass through Seattle each day, the city report said.

Oil trains currently enter Washington state near Spokane, and travel through the Tri-Cities and along the Columbia River before traversing Seattle to refineries to the north. In the state, as many as 17 trains carry about 1 million gallons of crude oil a week through several counties, including Spokane, Benton and Clark, BNSF reported to the state in July.

“We know they can explode. We’ve seen the tragedy in Canada. We know they can derail. That happened two months ago in our own city,” said Councilor Mike O’Brien, whose committee scheduled a special meeting Tuesday night to discuss the report. “We have to treat this as a real threat.”

Oil-train derailments have caused explosions in North Dakota, Virginia, Alabama and Oklahoma, as well as in Quebec, where 47 people were killed when a runaway train exploded in Lac-Megantic in July 2013.

Two months ago in Seattle, three tanker cars derailed as an oil train bound for a refinery in Anacortes pulled out of a rail yard in Seattle. BNSF officials noted at the time that nothing spilled, and a hazardous materials crew was on the scene in 5 minutes, but the incident raised new concerns.

BNSF spokesman Gus Melonas said the railway has improved tracks and roadbed to ensure that trains travel the tunnel safely. He said the concrete-lined tunnel is inspected regularly and is “structurally safe.”

“We’ll review the (city) report further,” he said. “We take safety extremely seriously and the operation of trains is a top priority, and we’ll continue to enhance our safety process.”

The railway plans to locate a safety trailer with foam equipment and extinguishers in the Seattle area, and plans to continue to train Seattle firefighters and responders.

Seattle’s report notes that oil trains travel through three significant zones in Seattle: passing within blocks of two stadiums, through the downtown tunnel, and along the north end, which has limited access because of high banks along the waterfront.

“The tunnel runs under all of downtown. What happens if something goes wrong there?” O’Brien said. “We’ve heard the fire department say we aren’t sure we can send firefighters to fight if it’s too dangerous.”

Oil trains typically move at about 10 mph through the tunnel, less than the maximum speed of 20 mph, and do not operate in the tunnel at the same time as a passenger train, BNSF’s Melonas said.

A derailment and fire involving Bakken oil tank cars could stress fire department resources, the report said. It recommends limiting track speeds in high-density urban areas, and that the railroad company help pay for specialized training, sponsor annual drills to respond to tank car emergencies and provide a foam response vehicle to use in case of an oil train accident.

Eric de Place, policy director for Sightline Institute, an environmental think tank, said other local governments should be doing similar reviews.

“Railroads don’t carry near the rail insurance they need,” he said. “If there’s a meaningful risk, the railroads should have to be insured against it and they should have to find private insurance.”

Bakken Crude, Crude By Rail, Oil conditioning, Oil stabilization, Volatile gases

Big debate in North Dakota: stabilize the oil before shipping?

August 25, 2014 Roger Straw

Repost from Prairie Business

Does ND crude need to be stabilized?

By April Baumgarten, Forum News Service, August 25, 2014

A train carrying crude oil tankers travels on the railroad bridge over the Missouri River on Aug. 16 in Bismarck. Dustin Monke/Forum News Service

DICKINSON, N.D. – What can be done to keep trains from becoming “Bakken bombs?”

It’s a question on the minds of many North Dakota residents and leaders, so much that some are calling on the state Industrial Commission to require oil companies to use technology to reduce the crude’s volatility. The words are less than kind.

“Every public official in America who doesn’t want their citizens incinerated will be invited to Bismarck to chew on the commissioners of the NDIC for failing to regulate the industry they regulate,” Ron Schalow of Fargo wrote in a Facebook message.

A train carrying Bakken crude derailed and exploded July 6, 2013, in Lac-Megantic, Quebec, killing 47 people. Another oil train crashed into a derailed soybean train on Dec. 30 near Casselton, N.D. No one was killed.

Schalow has started a campaign to require oil companies that drill in North Dakota to use stabilizers, a technology used in Texas to take natural gas liquids off crude to make it safer to ship. His online petition demands the Industrial Commission to force oil companies to remove all explosive natural gas liquids from crude before shipping it by rail. More than 340 people have signed the petition as of Saturday.

Schalow declined an interview, referring instead to his petition and Facebook page titled “The Bomb Train Buck Stops With North Dakota.”

Throughout North Dakota, residents have called on the state’s government to prevent future disasters like these, but some leaders say implementing stabilizers could cause more problems.

“Now you have to pipe from every one of these wells or you have to find a way to get it to this centralized location to be refined,” state Agricultural Commissioner Doug Goehring said. “That creates huge problems in itself.”

There is a difference between conditioning and stabilization, said Lynn Helms, the state’s Department of Mineral Resources director.

Oil conditioning is typically done at well sites in North Dakota, he said. The gases are first removed from crude. Then the water and hydrocarbons are removed with a heater treater. The crude oil is then put into a storage tank below atmospheric pressure, which reduces the volatility. Those gases can then be flared or transported to a gas processing plant.

“If crude oil is properly conditioned at the wellsite, it is stable and safe for transportation,” Helms said.

Oil that hasn’t been properly conditioned at the wellsite can be stabilized, Helms said, but that would include an industrial system of pipelines and processing plants.

Valerus, a company based in Houston, manufactures stabilizers for oil companies across the country, including in Texas, West Virginia and Canada. It’s a technology Texas has used at the wellhead for drilling the Eagle Ford shale since the early 2000s, said Bill Bowers, vice president of production equipment at Valerus. Recently, a centralized system with pipelines has been developed to transport the natural gas liquid safely.

“Most of that stabilization takes place at a centralized facility now,” he said. “There could be 100 wells flowing into one facility.”

The Railroad Commission of Texas has one rule that Helms has found regarding stabilization, he said. Rule 3.36 of the Texas Oil and Gas Division states operators shall provide safeguards to protect the general public from the harmful effects of hydrogen sulfide. This can include stabilizing liquid hydrocarbons

.Helms added he could not find any other rule requiring companies to use stabilizers, but the rule had an impact indirectly, Bowers said.

“I think what was happening is these trucking companies, either for regulation or just safety purposes, would not transport the crude if it was not stabilized,” Bowers said.

The process is relatively simple, he added.

“All we are really talking about is heating the crude, getting some of the more volatile compounds to evaporate and leaving the crude less volatile,” Bowers said.

The Industrial Commission has asked for public input on 10 items that could be used to condition oil. Though stabilization is not directly listed, it could be discussed under “other field operation methods to effectively reduce the light hydrocarbons in crude.”

The commission will hear testimony on Tuesday, Sept. 23, at the Department of Mineral Resources’ office in Bismarck. Written comment may be submitted before 5 p.m. Monday, Sept. 22.

New rules in North Dakota would regulate conditioning at well sites.

The hearing was brought on by a study from the North Dakota Petroleum Council and discussions held with U.S. Secretary of Transportation Anthony Foxx and Secretary of Energy Ernest Moniz regarding transportation issues.

Installing equipment at the wellhead for conditioning oil takes several weeks, Helms said. Stabilization, on the other hand, could take more than a year to install equipment – if not longer.

Helms said he couldn’t comment on the economic process.

“I do know that a large-scale industrial process would have a big imprint,” Helms said. “It would really exasperate our transportation problems because tens of thousands of barrels of oil would have to be trucked or piped to (a processing plant) and from it.”

Since there is a centralized system in Texas, companies can make a profit off the natural gas liquids. In North Dakota, companies would have to stabilize at the wellhead before pipelines are put in place.

“Given their preference, they won’t buy this equipment,” Bowers said. “They really don’t want to do it.”

There is no pipeline infrastructure to transport natural gas liquids from wellsites, meaning it would have to be trucked or shipped by rail. That could be more dangerous than shipping oil without stabilizing it, Goehring and Helms said.

“By themselves, they are more volatile and more dangerous than the crude oil with them in it,” Helms said. “The logical thing to do is to properly condition them at the wellsite.”

The crude could also shrink in volume, along with profits, Bowers said.

“It seems to me that in the Bakken people are quite happy with the arrangement,” he added. “They don’t believe necessarily that stabilization will change the safety picture.”

Schalow has criticized the Industrial Commission for not acting sooner, stating officials have had 10 years to address the issue.

Goehring said he was made aware of the process recently.

“I don’t believe anybody is withholding information or is aware of anything, nothing diabolical,” Goehring said.

Officials agreed that the process needs to be dealt with on multiple levels, including oversight on railroad safety. Public Service Commissioner Julie Fedorchak outlined a proposal on Thursday for a state-run rail safety program. If approved, the Public Service Commission would hire three staff members for the program.

The commission has been working on the proposal since before the Casselton derailment.

“I share (Schalow’s) concern about having a safe method of transportation, and I think everyone does,” Fedorchak said. “How we get there is the challenge and I think there is a number of different steps. I don’t think there is one solution.”

Many trains carrying Bakken crude travel through Fargo, where Schalow and Democratic Sen. Tim Mathern live.

Mathern follows Schalow’s Facebook page and said he did so out of his concern for transporting oil safely.

“My perspective is that we must preserve and protect our quality of life today and in the future,” Mathern said. “We must be careful that we don’t do kind of a wholesale of colonization of our resources in sending them out. … It’s almost like how do we make sure that we don’t have an industrial waste site as a state?

“In many of our larger cities, we have a section of town that is kind of an industrial waste site. Eventually, someone has to clean that up. Eventually, that is a cost to society, and I am concerned that we don’t let that happen to North Dakota.”

Mathern said safely transporting oil is no longer a western North Dakota or even a state issue; it’s a national issue that must be taken seriously because the oil is being transported throughout the country.

“There is enough responsibility to go around for everybody, including policy makers,” he said. “It’s not just one industry; it’s many industries. It includes the public sector. It includes governors and legislators, and people that are supposed to be attentive to citizens, and to be attentive to the future. We all have responsibility in this.

“This has worldwide consequences. This is an oil find that even affects the balance of power, even politically.”

Mathern said he doesn’t know what Schalow’s motivation is, but it isn’t just Schalow raising the questions.

“I don’t think this is a matter of blaming oil.” Mathern said. “This is a matter of being respectful for our citizens and being a good steward of this resource and a good steward of our future.”

Public comment

Residents unable to attend the North Dakota Industrial Commission on oil conditioning practices set for 9 a.m. on Tuesday, Sept. 23, in Bismarck may submit written comments to brkadrmas@nd.gov. Comments must be submitted by 5 p.m. CDT on Monday, Sept. 22.

Alon USA Energy, Bakersfield CA, Crude By Rail

Oil-by-rail project for shut California refinery near approval

August 16, 2014 Roger Straw

Repost from Reuters
[Editor: Significant quote: “…proposals have faced lengthy delays for comprehensive environmental reviews, public input, and revisions. Valero Energy Corp, the largest U.S. refiner, postponed its plans to send crude by rail to its San Francisco-area refinery because of such delays, and withdrew permit applications for a similar project at its Los Angeles plant….’I think Bakersfield is probably the best place to build a rail facility in California, because it’s not sitting in San Francisco or LA, and it has access to pipes going north and south. It just seems like it’s going to be a struggle to develop rail in other locations,’ Plains’ Chief Operating Officer Harry Pefanis told analysts in May.” – RS]

Oil-by-rail project for shut California refinery near approval

Kristen Hays, August 15 2014

(Reuters) – The first new crude-by-rail project at a California refinery is likely to win approval next month after more than a year of scrutiny, the head of the Kern County planning division told Reuters, and it could help reopen the shuttered plant.

The facility at independent refiner Alon USA Energy Inc’s Bakersfield plant would increase crude offloading capacity to 140,000 barrels per day from its current 13,000 bpd and open up significant access to cheaper inland U.S. and Canadian crudes.

Alon’s Bakersfield plant is in Kern County, home to about 65 percent of all California oil production, where crude has been produced for more than a century.

Alon shut the 70,000 bpd Bakersfield refinery in late 2012 because its reliance on more expensive imports and lack of access to other crudes without significant rail rendered the plant unprofitable.

Other California refiners also struggle with profitability because of reliance on expensive imported crude and costly fuel manufacturing regulations in the biggest gasoline market in the country.

“We’re supportive of what Alon is doing with this refinery,” said Lorelei Oviatt, director of the county’s planning and community development department. “This refinery is not operating at full capacity. We would like to see this refinery operating at full capacity.”

Alon didn’t respond to requests for comment.

The Alon project is among several proposed at California refineries, some of which face growing opposition in light of a spate of crude train crashes in the past year as the U.S. oil boom sent amounts of crude moving by train soaring.

The worst by far was in Quebec in July last year when a runaway crude train exploded in the town of Lac-Megantic, killing 47 people.

Several California refiners, largely isolated by the Rocky Mountains from the growing cheap bounty from oilfields in Texas, North Dakota and Canada, want to tap those sources via rail because no major pipelines carry crude from those areas into the Golden State, nor are any planned.

More than half of the 1.7 million barrels of crude processed by California refiners each day is imported.

But proposals have faced lengthy delays for comprehensive environmental reviews, public input, and revisions.

Valero Energy Corp, the largest U.S. refiner, postponed its plans to send crude by rail to its San Francisco-area refinery because of such delays, and withdrew permit applications for a similar project at its Los Angeles plant.

Kinder Morgan Energy Partners operates the state’s most substantial oil-by-rail facility at a terminal in Richmond, which handles up to 72,000 bpd. Local planners last year approved, without an environmental review, a revised ethanol offloading permit to allow the terminal to handle crude. But opponents are suing to temporarily shut it down and force that kind of review.

Tesoro Corp faces similar growing opposition for a 360,000-bpd railport project in southwest Washington state that could ship crude to California refineries by tanker.

That could let California refiners – which includes Tesoro’s Los Angeles-area plant – replace more than 40 percent of more expensive imported oil with North American crudes if all of it were shipped to the state.

Alon is considering possibly leaving the Bakersfield refinery shut and running the facility as a rail and logistics terminal.

If the refinery remains shut, the rail operation would be similar to a separate 70,000-bpd oil-by-rail facility Plains All American plans to open in October and eventually expand to 140,000 bpd. That project was approved two years ago before it was acquired by Plains.

Alon bought the Bakersfield plant out of bankruptcy in 2010 from Flying J Inc, which had shut it in early 2009 shortly after seeking bankruptcy protection. Alon restarted the hydrocracker in the summer of 2011, but operational problems led to more shutdowns and startups.

David Hackett, president of Stillwater Associates, a refining consultancy in Irvine, California, said the refinery’s spotty operational history may better support a future as a rail hub.

“They haven’t run it as a refinery in a long time. I don’t think they’ll restart Bakersfield, and I don’t understand why they didn’t pull this off two years ago,” he said.

ESTABLISHED OIL HUB

Bakersfield sits in the center of the state’s oil production where the oil industry is long established. Plains executives have said its crude-friendly climate and existing infrastructure make the area more attractive for such projects.

“I think Bakersfield is probably the best place to build a rail facility in California, because it’s not sitting in San Francisco or LA, and it has access to pipes going north and south. It just seems like it’s going to be a struggle to develop rail in other locations,” Plains’ Chief Operating Officer Harry Pefanis told analysts in May.

Alon had hoped to have its Bakersfield rail project up and running by the end of 2013, but it, like others in the state, underwent a lengthy environmental review and public comment.

Oviatt said the Kern County planning department had considered all issues during that review, including safety and spill preparedness.

Now the project is slated to go before the county’s board of supervisors for a vote at a Sept. 9 public hearing. Oviatt, who is not one of the five members of the board, said she expected a final decision at that time.

The planning department has signed off on it, and Oviatt said the board tended to be supportive of business.

“I can’t say how the board would vote, but I do believe that given their business-friendly attitude, they’re going to take all of this into serious consideration.”

(Reporting by Kristen Hays in Houston; Editing by Terry Wade, Lisa Shumaker, Jessica Resnick-Ault and Phil Berlowitz)

Emergency Readiness & Response, Insurance Industry, Tank car design, Tank car retrofit

Ca-ching: Oil-by-rail surge to benefit three commercial sectors

August 11, 2014 Roger Straw

Repost from Benzinga
[Editor: Quick & dirty on the 3 sectors: Freight Car Designers And Refitters, Insurance Providers, and Emergency Services And Safety Training. UNLESS … if we stop crude by rail in its tracks, the only CA-CHING will be in the alternative energy fields. – RS]

3 Sectors Expected To Benefit From The Oil-By-Rail Surge

Bruce Kennedy, Benzinga Staff Writer, August 11, 2014

It’s been just over a year since a freight train carrying crude oil from the Bakken shale fields in North Dakota derailed and exploded in a Quebec town near the U.S.-Canadian border, killing 47 people.

That accident, along with several others in its wake, drew attention to the enormous increase in shale oil now being transported from North Dakota and Canada by rail – and the vulnerabilities of that form of transport.

“More crude oil is being shipped by rail than ever before, with much of it being transported out of North Dakota’s Bakken Shale Formation,” Department of Transportation Secretary Anthony Fox pointed out in a press conference last month. “In 2008, producers shipped 9,500 rail-carloads of oil in the U.S.; by just last year, that number skyrocketed to 415,000 rail-carloads — a jump of more than 4,300 percent.”

At that same press conference, Fox announced a rule-making proposal to improve the safe transportation of large quantities of flammable materials by rail – crude oil and ethanol in particular.

The increase in oil being transported by rail, as well as the new safety measures, might also be a windfall for companies in some related fields.

Freight Car Designers And Refitters

The proposed new safety rules for oil freight cars means a potential bonanza for firms like The Greenbrier Companies (NYSE: GBX). The Oregon-based group is a leading manufacturer and marketer of railroad freight car equipment in both North America and Europe.

Along with retro-fitting existing oil rail cars, Greenbrier is also designing a new genreration “Tank Car of the Future,” with a thicker tank and bigger welds to ensure greater safety.

The new design, according to the Rigzone oil and gas industry web site, is “intended to meet anticipated new industry and government standards for tank cars transporting certain hazardous material.”

Insurance Providers

The Wall Street Journal reports that most, big North American railroads usually carry about $1.5 billion in liability insurance – but notes that accidents like last year’s deadly derailment and explosion in Lac-Mégantic, Quebec, can end up costing billions of dollars more in cost, especially if that accident happens in a populated area.

“Even if it happens outside of town, the massive damage to property and the environment — you’re stymied when you have these kind of crude oil fires burning hot and big for days,” Karen Darch, president of Barrington, Illinois, told the newspaper.

This could lead to an increase in the need for insurance.

“With experts predicting that oil spill derailments may increase in frequency over the next decade, the insurance industry must be prepared to address this new coverage threat,” says the law industry tracker web site Law360 earlier this year, “including the coverage issues and potential exposure which may arise from these disasters.”

Emergency Services And Safety Training

Earlier this year, Minnesota’s state legislature passed an oil transport law. The measure, reportedly worth more than $6 million, took fees generated in part from oil and railroad companies and put that funding towards tanker and pipeline disaster training, as well as more state transportation safety inspectors.

As former National Transportation Safety Board Chairwoman Deborah Hersman pointed out in a letter written this past January to the head of the Federal Railroad Administration, there is no mandate for the railroads to come up with comprehensive disaster response plans for oil train derailments

This means the rail carriers “have effectively placed the burden of remediating the environmental consequences of an accident on local communities along their routes,” the letter said.

According to the Association of American Railroads, the industry is providing $5 million to develop and fund specialized training for first responders handling a crude-by-rail accident, as well as developing “an inventory of emergency response resources and equipment for responding to the release of large amounts of crude oil along routes over which trains with 20 or more cars of crude oil operate.”