FAIRFIELD – Solano County wants to let people know about its rail emergency plans and to identify weaknesses, even as a Valero pursues a controversial proposal to ship crude oil by rail through the region.
The county held a rail safety workshop on Monday billed as a “community conversation.” About 60 people attended the evening meeting in the county Board of Supervisors chamber.
This meeting came against the backdrop of a proposal by Valero to transport crude oil by rail on the Union Pacific tracks to its Benicia refinery. The tracks passed through the heart of Fairfield, Suisun City and Dixon, as well as the wetlands of Suisun Marsh. Crude rail derailments in other areas have caused explosions.
County Board of Supervisors Chairwoman Linda Seifert said there are already various hazardous materials that pass through Solano County by rail on the way to factories and other destinations. Local governments cannot regulate these freight rail trips because of interstate commerce laws, she said.
County Emergency Services Manager Don Ryan and Dixon Fire Chief Aaron McAlister talked about the local response system for emergencies. They talked about how local emergency responders work together, with a mutual aid system in place. Various fire departments and other emergency responders train together on possible disasters ranging from hazardous materials spills to shooter situations.
“The fire rescue system in California, the mutual aid system, is one of the finest in the country,” McAlister said.
Chris Howe of Valero Refinery talked about the crude-by-rail proposal and stressed the safety measures that Valero takes and the emergency resources that it has. He noted that Vallejo called on Valero to help respond to a major asphalt spill within that city.
“Preventing accidents is a top priority of ours and it’s something we focus on constantly in our business,” Howe said. “We handle flammable materials every day. That’s our business.”
Union Pacific spokeswoman Liisa Stark talked about the inspections done by her company by running equipment with computers and sonar over the tracks. She talked of detection boxes along tracks that can tell if a train has a hot wheel bearing or other problems.
“I just can’t say enough about how much we invest in time and energy to ensure we continue to run safely,” she said.
Investigative journalist Antonia Juhasz said that crude-by-rail trips have increased from 9,500 carloads in 2008 to 400,000 last year. Bakken crude oil coming from North Dakota is more flammable, volatile and dangerous than other crude, she said.
“This is a new phenomena,” she said. “This is a new problem.”
She showed a photo of a fireball in the sky from a crude oil derailment on Jan. 1 in Casselton, North Dakota. She showed a photo of a April 30 crude oil derailment in Lynchburg, Virginia that left an oil slick 17 miles long in the James River. Altogether, she showed photos of 10 derailments in the United States and Canada, all during 2013 or this year.
“We don’t know how to regulate it yet,” Juhasz said.
Danny Bernardini spoke on behalf of state Sen. Lois Wolk. Wolk has sent a letter to the U.S. Department of Transportation containing suggestions and recommendations for crude-by-rail shipments. Among other things, she recommended the speed of these trains within all cities be set at 30 mph and that shippers and carriers have sufficient insurance or financial means to cover the costs of crashes and spills.
Also speaking were Paul Hensleigh of the Yolo-Solano Air Quality Management District, Brandon Thomson representing Rep. John Garamendi and Solano County Resource Management Director Bill Emlen.
Then the gathering broke into three groups and members of the public talked about their concerns.
Karen Schlumpp of Benicia expressed concern about the time it might take for regulations to be passed and implemented to deal with the new crude-by-rail issues.
“After tonight, I’m feeling like we’re on a huge catchup on a train that’s already rolling,” Schlumpp said.
Katherine Black of Benicians for a Safe and Healthy Community expressed skepticism that crude-by-rail shipments can be done safely.
“This is too dangerous,” she said. “It’s like preparing for an atomic bomb.”
The meeting lasted for two-and-a-half hours. Participants wrote down their concerns and ideas and turned them into the county.
“This is an essential conversation that needs to happen,” Emlen told the gathering.
Repost from The Wall Street Journal [Editor: A good summary of recent history and market players in the emergence and future of crude by rail. Interesting quote: “…if all the railcars loaded with crude on one day were hitched to a single locomotive, the resulting train would be about 29 miles long.” – RS]
Dangers Aside, Railways Reshape Crude Market
Shipping Crude by Rail Expands as New Pipelines Hit Headwinds and Train Companies Reap Revenue
By Russell Gold and Chester Dawson, Sept. 21, 2014
Railroad tank cars are filled with oil at the Musket Corp. Windsor Crude Terminal in Windsor, Colo. | Bloomberg
In May 2008, a locomotive with a grizzly bear painted on its side pulled into a railroad siding next to an abandoned grain elevator in the ghost town of Dore, N.D. The engine, property of the Yellowstone Valley Railroad, hitched up a couple of tank cars of crude from nearby oil wells and set off on a thousand-mile journey to Oklahoma.
Dore would never be the same—and neither would the U.S. energy industry. Until then, most oil pumped in North America moved around the continent in pipelines. Suddenly, and just as the oil industry began a period of unprecedented growth, there was an alternative: “crude by rail.”
Today, 1.6 million barrels of oil a day are riding the rails, close to 20% of the total pumped in the U.S., according to the Energy Information Administration, chugging across plains and over bridges, rumbling through cities and towns on their way to refineries on the coasts and along the Gulf of Mexico. If all the railcars loaded with crude on one day were hitched to a single locomotive, the resulting train would be about 29 miles long.
Initially conceived of as a stopgap measure until pipelines could be constructed, and plagued by high-profile safety problems, crude by rail has nevertheless become a permanent part of the nation’s energy infrastructure, experts say. Even pipeline companies have jumped into the rail business, building terminals to load and unload crude.
Behind the new industry are powerful economics. While it costs a bit more to ship petroleum on trains than through pipelines, railroads have the flexibility to deliver it to wherever it will fetch the highest prices. And capital expenses are far lower. Major railroads’ revenue for hauling crude has jumped from $25.8 million in 2008 to $2.15 billion in 2013, according to federal data.
The oil and rail industries have developed “a mutual dependence likely to continue for a long time,” said Ed Morse, global head of commodities research for Citigroup.
It is a similar story in Canada: the amount of crude moving by rail has quadrupled since 2012, and is forecast to more than triple between now and 2016.
The swift growth of crude by rail has been embraced by drillers in new oil fields in North Dakota, Texas and Colorado eager to move their product to the highest bidders. It was also welcomed, at least initially, by railroads looking for new customers after the recession sent traditional shipments tumbling.
But it has frightened communities across the country where first responders fear the fireballs that have erupted in the past year after some oil-train derailments. Federal regulators recently proposed new rules to require sturdier cars to carry oil, lower speed limits on some shipments and testing of the volatility of the crude transported by train.
Pipelines still carry most of the 8.5 million barrels of oil pumped every day in the U.S. And safety experts say pipelines have the best record of transporting crude without accident, despite a few big leaks like the one that left Mayflower, Ark., awash in heavy crude last year.
But pipelines, especially new pipelines, face a lot of problems these days. They draw protests from communities worried about spills and unhappy with the use of eminent domain to take rights of way from local landowners.
Activists opposed to the use of fossil fuels have focused on blocking pipelines in hopes of keeping oil in the ground. The Keystone XL pipeline, which requires federal approval because it crosses the U.S. border from Canada, has been seeking a permit since 2008 amid fierce political fighting, pro and con.
Railroads, by contrast, already own 140,000 miles of track in the U.S., according federal statistics, in a system that can send cargo from coast to coast, north to Canada and south to Mexico. By law, railroads don’t have the ability to turn down cargo, even if they want to, so all oil shippers had to do is to figure out how to get oil on and off the trains.
A big loading terminal might cost about $50 million—equal to the estimated cost of building just one mile of the Keystone pipeline.
With a terminal, “You can build it and have it under contract in 12 months and pay it off in five years,” said Steve Kean, president and chief operating officer of Kinder Morgan Inc., thtte operator of 80,000 miles of pipeline in North America and a growing network of rail terminals. The company has spent $290 million to date building up a crude-by-rail business.
To justify the massive investments needed for pipelines, their builders usually require drillers and refiners to sign long-term shipping contracts before they start laying pipe. That has been a problem for new oil fields without a track record, and for the mostly independent energy companies that developed those fields using hydraulic fracturing, said Adam Sieminski, who runs the federal government’s Energy Information Administration. Railroads don’t require such lengthy contracts.
The new way of moving crude was born out of frustration and need. In 2006, North Dakota faced what it called, in a report, a “crude oil transportation crisis.” Oil production was rising, but the few pipelines that served the state were full.
Enter Musket Corp., a privately held Houston company owned by the family that also owns Love’s Travel Stops & Country Stores. Musket bought inexpensive diesel from refineries along the Gulf Coast and moved it by rail to locations close to the Love’s service stations, developing and patenting a portable pump for loading and unloading the fuel.
In 2007, Musket tried using its pump to load a couple of tank cars with crude oil rather than diesel. When that worked, the company sent employees driving around North Dakota with binoculars to find an unused railroad siding to lease. They spotted Dore.
“Pretty soon, we knew it was going to be big,” said J.P. Fjeld-Hansen, a managing director of Musket. Trains could deliver Bakken crude to wherever it could fetch the highest prices, including Philadelphia, California, Louisiana or the giant Houston petrochemical complex.
The first loads from Dore were carried to Oklahoma, home to a giant oil-trading hub, by BNSF Railway Co., now owned by Berkshire Hathaway Inc. It picked up the cars from Yellowstone Valley Railroad, a so-called short line railroad that now operates on just one mile of track — specializing in hauling freight from shippers’ yards to connections with the bigger railroads. The company that owns the railroad, Watco Companies Inc., didn’t respond to requests for comment.
“Crude is a growing part of our business,” said Michael Treviño, a spokesman for BNSF, which now moves more oil than any other major North American railroad and spent $200 million last year on crude-by-rail projects.
The Dore project caught the attention of EOG Resources Inc., a big oil and gas company based in Houston. By the end of 2009, EOG had built an industrial-scale rail-loading terminal in Stanley, N.D., including a 1.3-mile loop of track where trains could be loaded with 60,000 barrels a day.
“We brought the project to fruition in an eight-month period,” Mark Papa, the former chairman of the company, said in a conference call with analysts in 2010. The company declined to comment.
The terminal cost $50 million, according to Wilson & Company Inc., an engineering firm involved in the project. Its chairman, Kenny Hancock, said his firm needed to work out kinks with this first-of-its-kind facility.
One problem was that when tank cars were loaded, hydrocarbon fumes would leak out and, since they were heavier than air, settle in the long open-ended loading shed. “The first seal we tried didn’t work and our explosive limit alarms went off,” he said. New seals and ventilation fans eventually solved the problem, the company said.
The relative ease and low cost of building loading and unloading terminals soon attracted a range of companies. Great Western Railroad, a Saskatchewan short line mostly owned by the province’s farmers in a cooperative agreement, hauled more carloads of crude last year than carloads of grain.
In 2011, Dakota Plains Holding Co. built a loading terminal, acquired a Utah tanning salon business that traded on the OTC Bulletin Board, renamed the business and issued shares to raise funds to expand.
There was also a surge in facilities for unloading oil and transferring it to refineries; such terminals are operating or planned in nearly two dozen states and Canadian provinces. Mile-long trains of oil tankers became familiar sights in cities across the country.
The crude-by-rail phenomenon has spread beyond the Bakken Shale in North Dakota and Montana to the Permian Basin in Texas, the Niobrara in Colorado and to western Canada. In July, Global Partners said they planned to build a rail terminal in the heart of the Gulf Coast petrochemical complex that can handle more than 100,000 barrels a day of crude, including Canadian oil sands.
“It is not a layup to build a pipeline to the Gulf Coast,” said Mark Romaine, chief operating officer of Global Partners, a Waltham, Mass., fuel logistics firm. “Look at the Keystone XL.”
But a year ago, those strings of black train cars took on an ominous look after an unattended oil train in Lac-Mégantic, Quebec, derailed and exploded, killing 47 people. Several other derailments were followed by fireballs as Bakken crude burst into towering flames.
Those accidents have given railroads second thoughts about hauling crude, said consultant Anthony Hatch. While companies don’t break out the data, hauling crude is believed to be very profitable for railroads, so “they were excited” at first, he said. But now that business, which makes up only about 3.5% of rail shipments, according to federal data, has attracted unwelcome attention in communities that previously ignored the freight trains rumbling through town. And even some of the largest North American railroads are concerned they might not survive the costs of cleanup and lawsuits if a train exploded in a crowded city.
Regulators are imposing new rules that industry executives fear could slow the entire rail system, cut capacity and cause congestion. Federal regulators recently concluded that Bakken oil contains a high level of combustible compounds, known as light ends, as The Wall Street Journal reported earlier this year. The U.S. Department of Transportation’s proposed new rules on crude by rail will require companies to test crude before putting it into appropriately sturdy tank cars, among other measures being imposed on the little-regulated industry.
Harold Hamm, chairman and chief executive of Continental Resources Inc., a leading exploration and production company in the Bakken, said that the problem isn’t with the oil, but with railroad safety. “There would not be any problems with oil movements in America as long as Mr. Buffett keeps the trains on the track,” said Mr. Hamm, referring to Warren Buffett, the chairman and chief executive of Berkshire Hathaway, the owner of BNSF.
Mr. Treviño, the BNSF spokesman, said that “the facts are that 99.997% of rail industry shipments of hazardous materials reach their destination without a release caused by a train accident,” and that BNSF had a lower percentage of derailments last year than anytime in company history.
Two BNSF trains were involved in a derailment near Casselton, N.D., in 2013 that released more than 400,000 gallons of crude and set off a several-story tall explosion, leading to the evacuation of 1,400 people from Casselton.
The Association of American Railroads said it has increased inspections, decreased speeds and is using more technology to prevent derailments.
But Mr. Hamm said he thinks the situation will be short lived. “Rail is still a temporary thing,” he said. “If rail hadn’t been available, there would have been pipelines built.”
And some are in the works. Enbridge Inc. recently received approval form North Dakota regulators to start construction on a $2.6 billion, 225,000-barrel a day and 600-mile project called the Sandpiper pipeline, which would move oil from Tioga, N.D., to Wisconsin.
In Dore, Musket says it isn’t worried about business drying up with the addition of pipelines. The company’s terminal in the town can now handle 60,000 barrels a day and employs 50 people; the company has built another rail-loading facility in Dickinson, a two-hour drive to the south, and one in the Niobrara Shale in Colorado.
“I don’t think it’s either/or,” Mr. Fjeld-Hansen said. “I think rail and pipe will coexist for a long time.”
—Betsy Morris and David George-Cosh contributed to this article.
by John Light, September 2, 2014
In this July 16, 2013, photo, railroad oil tankers are lined up at the Port of Albany, in Albany, NY. (AP Photo/Mike Groll, File)
If you reside in the US, there’s around an eight percent chance that you live in an oil train’s blast zone. And there’s a fight going on at the state and federal levels, between monied interests and regulatory agencies, over efforts to ensure that these trains — which have shown a tendency to burst into flames — will be relatively safe.
The increased use of hydraulic fracturing — fracking — has made oil that was previously inaccessible available to drillers. The crude then has to make its way to refineries, and while the boom in pipeline projects has received quite a bit of attention, roughly 60 percent of it travels by rail.
On Friday, California legislators passed a bill that would require railroads to tell emergency officials when oil trains filled with explosive Bakken crude — oil from a particularly productive region in western North Dakota — would pass through the state. The law reflects growing concern, across America, about the dangers of these trains moving through dense communities, including Sacramento, California’s capital.
Oil tanker cars move along a web of routes that crisscross the United States. In 2013, about 400,000 cars made the journey, a 4,000 percent increase over the previous five years. The boost in oil cars has been so great that less lucrative industries are having trouble finding rail transport for their products. In March, General Mills announced that it had lost 62 days of production on such favorites as Cheerios because the trains that had shipped agricultural products were being leased by the fossil fuel industry.
Most oil reaches its destination without any problems, but as production has skyrocketed, the railroads have become increasingly taxed. Those who live near railways have noticed the uptick, with trains rumbling through towns much more frequently, and at much higher speeds.
Last July, a tanker train filled with North Dakota crude derailed in the middle of the night in Lac-Mégantic, a small Canadian town near the border with Maine; the resulting inferno killed 47 people. Since then, derailments in Casselton, North Dakota, and Lynchburg, Virginia, have led to evacuations. The Lac-Mégantic disaster spurred protests from fire chiefs and town officials who said that they were ill-equipped to deal with a possible derailment.
In the year since, officials have moved to formalize several safety measures. This July, the Obama administration proposed a plan that involves banning certain older tank cars, using better breaks on car, restricting speeds and possibly rerouting trains.
That first point, phasing out old tank cars, is a key area of contention. For the most part, the opposition isn’t coming from the railroads; it’s the oil companies that lease the tank cars that are fighting the new regulations. As Bloomberg Businessweek’s Matthew Philips explained earlier this summer:
It’s helpful to understand the three industries with something at stake here: railroads, energy companies, and tank-car manufacturers. The railroads own the tracks but not the tank cars or the oil that’s inside. The oil often belongs to big energy companies such as refiners or even trading firms that profit from buying it near the source—say, in North Dakota—and selling it elsewhere. These energy companies tend to lease the tank cars from large manufacturing companies or big lenders such as General Electric (GE) and CIT Group (CIT).
Although it is never their oil on board, the railroads usually end up in the headlines when something goes wrong. That’s why they have been eager for a rule to make energy companies use stronger tank cars. Meanwhile, the oil industry has been busy issuing studies trying to prove that the oil coming out of North Dakota is safe enough to travel in the existing tank cars. The energy lobby also thinks railroads need to do a better job of keeping the trains on the tracks. Tank-car manufacturers, meanwhile, simply want some clarity around what kind of cars they need to build.
Canada, following the Lac-Mégantic disaster, announced plans to phase out one older tank car that has been linked to several accidents over the next three years; the Obama administration proposal would do it in two.
But the oil industry doesn’t want that. Leading the charge is the American Petroleum Institute, an organization that, so far in 2014, has spent $4 million lobbying regulators and Congress. They’ve pushed back against labeling Bakken crude as more hazardous than other crude oil, even though many studies have found that it is.
Environmental groups blame this lobbying effort for several weaknesses in the proposed rules. For one, they would only apply to trains that have 20 or more carloads of Bakken crude. “If the rule is approved as drafted, it would still be legal to transport around 570,000 gallons (the equivalent of the fuel carried by seven Boeing 747s) of volatile Bakken crude in a train composed of 19 unsafe, [aging] tank cars—and none of the other aspects of the new rules, including routing, notification, train speed, and more would apply,” wrote Eric de Place of the sustainability think-tank Sightline Institute, who also criticized the proposal for not immediately banning older tankers.
And even if the regulations were to be put in place despite the API’s attempts to weaken them, there’s the distinct possibility that regulators will fall short. The government has often taken a hands-off approach in determining what gets shipped, and how — and in enforcing existing rules requiring that officials in the cities it passes through be informed that potentially hazardous shipments are coming. In These Times reported that government inspections to make sure railroads are properly labeling the product they are shipping (the Bakken crude was improperly labeled in the Lac-Mégantic disaster) are supposed to be unannounced, but are sometimes pre-arranged. Meanwhile, railroads are cutting back on the number of crew members manning trains, a move that some workers feel will lead to less safe travel.
“No one would permit an airliner to fly with just one pilot, even though they can fly themselves,” wrote John Previsich, the president of the Sheet Metal, Air, Rail and Transportation union’s transportation devision. “Trains, which cannot operate themselves, should be no different.”
John Light blogs and works on multimedia projects for Moyers & Company. Before joining the Moyers team, he was a public radio producer. His work has been supported by grants from The Nation Institute Investigative Fund and the Alfred I. duPont-Columbia Awards, among others. A New Jersey native, John studied history and film at Oberlin College and holds a master’s degree in journalism from Columbia University
Our fight to stop the bomb trains traveling through our backyards
By Suma Peesapati, August 28, 2014
Bruce Crummy/2013 AP file photo | An oil train derailed on Dec. 30 in Casselton, N.D. It was one of a handful of recent incidents of rail cars carrying crude oil exploding and going up in flames.
“This issue needs to be acted on very quickly. There is a very high risk here that hasn’t been addressed. We don’t need a higher body count before they move forward.”
It was a mark-my-words moment from National Transportation Safety Board Chairwoman Deborah Hersman at her farewell appearance before stepping down from the position in April.
She was speaking about the explosive growth of the use of unsafe tanker cars to haul crude oil extracted from the Bakken reserve in North Dakota and Montana to refineries across our nation. When involved in derailments, many of these cars carrying the highly volatile fossil fuel are vulnerable to puncture and explosion upon impact. They were the cars that were involved in explosions in Aliceville, Alaska, in November, Casselton, N.D., a month later and, of course, last summer’s horrific reckoning in Lac Megantic, Quebec.
Not two weeks after Hersman made her remarks, a train carrying Bakken crude derailed in Lynchburg, Va., igniting a roaring blaze and prompting the evacuation of the entire downtown. The tankers involved, however, weren’t the cars that the former chairwoman was warning about. They were a tougher, supposedly safer car tank car that the rail and oil industry is slowly moving toward adopting. It begs the question, though, are these newer cars going to be safe enough?
This question recently hit home when a local news station exposed a clandestine crude by rail-loading operation in Richmond, here in the Bay Area, that had been flying under the radar for months. After making a backroom deal with the local air district, Kinder Morgan secured approval to introduce this highly explosive fracked crude through urban Bay Area neighborhoods without any public notice or environmental review.
Within two weeks after the story broke, Earthjustice sued the air district and Kinder Morgan, demanding a full public airing of the project’s risks to public health and safety. A hearing on the merits of this case is scheduled for Sept. 5 in San Francisco Superior Court. While we await our day in court, Kinder Morgan is unloading its crude just a half-mile from Washington Elementary School, in a low-income community of color that the air district recognizes as already overburdened by the very same carcinogenic toxic air contaminants released by handling Bakken crude.
Piling on to this environmental injustice, this crude is being loaded onto tanker trucks that are not certified by California. Those trucks then travel on Bay Area roadways until this dangerous commodity reaches its ultimate destination — the Tesoro refinery in Martinez.
Tesoro Martinez is also accepting Bakken crude from similar rail-to-truck crude transfer operations in Sacramento, thereby compounding the risk of accident. With some of the most treacherous mountain passes in the country, and a dilapidated railway system that was never designed or upgraded to transport such dangerous cargo, these trains are ticking time bombs.
The anemic response from state and federal regulators has been disappointing. Fortunately, our state and federal environmental laws gives private citizens a voice demand more than “business as usual.”
Suma Peesapati is an attorney for San Francisco-based Earthjustice.
