Tag Archives: Crude by Rail

Benicia Community Forum & Update, January 18, 1-4pm, Benicia Library

ANNOUNCING . . .
Community Forum & Update, Sunday, January 18, 1-4pm, Benicia Library

FacebookStopCrudeByOil_cover(267)Learn more about Valero’s crude by rail project and how it might affect Benicia residents at a Community Informational Forum on Sunday, January 18, 2015, from 1:00 to 4:00 pm at the Benicia Public Library, 150 East L Street, Doña Benicia Room. The Forum is sponsored by Benicians for a Safe and Healthy Community (BSHC), a grassroots organization advocating responsible environmental action and currently working to STOP crude by rail in Benicia.

You’ll hear from guest speakers:

  • Antonia Juhasz, oil and energy analyst, award-winning author and investigative journalist, and
  • Diane Bailey, Senior Scientist in the Health and Environment Program for the Natural Resources Defense Council.

Members of BSHC will also provide an update on our work.

  • Marilyn Bardet will discuss the history and status of the project’s Draft Environmental Impact Report (DEIR).
  • Andrés Soto will discuss the local, regional and cumulative impacts of transporting crude oil by rail. There will be plenty of time for questions, discussion and brainstorming.

For more information about the Community Forum or BSHC, please call (707) 742-3597, or email info@SafeBenicia.  For more information about Valero Crude by Rail check out  SafeBenicia.org.  Of course, you can find lots of info here on BeniciaIndependent.org.

The Fight to Stop a Boom in California’s Crude by Rail

Repost from The Huffington Post
[Editor: Our friend here in Benicia, Ed Ruszel, has been featured in numerous online blogs and news outlets in this story by Tara Lohan.  This is an abbreviated version.  The article mistakenly gives a link to The Benicia Independent rather than Benicians for a Safe and Healthy Community.  BSHC can be found at SafeBenicia.org.  – RS]

The Fight to Stop a Boom in California’s Crude by Rail

By Tara Lohan, 01/08/2015

Ed Ruszel’s workday is a soundtrack of whirling, banging, screeching — the percussion of wood being cut, sanded and finished. He’s the facility manager for the family business, Ruszel Woodworks. But one sound each day roars above the cacophony of the woodshop: the blast of the train horn as cars cough down the Union Pacific rail line that runs just a few feet from the front of his shop in an industrial park in Benicia, California.

Most days the train cargo is beer, cars, steel, propane or petroleum coke. But soon, two trains of 50 cars each may pass by every day carrying crude oil to a refinery owned by neighboring Valero Energy, which is hoping to build a new rail terminal at the refinery that would bring 70,000 barrels a day by train — or nearly 3 million gallons.

And it’s a sign of the times.

Crude-by-rail has increased 4,000 percent across the country since 2008 and California is feeling the effects. By 2016 the amount of crude by rail entering the state is expected to increase by a factor of 25. That’s assuming the industry gets its way in creating more crude-by-rail stations at refineries and oil terminals. And that’s no longer looking like a sure thing.

Valero’s proposed project in Benicia is just one of many in the area underway or under consideration. All the projects are now facing public pushback–and not just from individuals in communities, but from a united front spanning hundreds of miles. Benicia sits on the Carquinez Strait in the northeastern reaches of the San Francisco Bay Area. Here, about 20 miles south of Napa’s wine country and 40 miles north of San Francisco, the oil industry may have found a considerable foe.

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Photo by Sarah Craig

A recent boom in “unconventional fuels” has triggered an increase in North American sources in the last few years. This has meant more fracked crude from North Dakota’s Bakken shale and diluted bitumen from Alberta’s tar sands.

Unit trains are becoming a favored way to help move this cargo. These are trains in which the entire cargo — every single car — is one product. And in this case that product happens to be highly flammable.

This is one of the things that has Ed Ruszel concerned. He doesn’t think the tank cars are safe enough to transport crude oil in the advent of a serious derailment. If a derailment occurs on a train and every single car (up to 100 cars long) is carrying volatile crude, the dangers increase exponentially. In 2013, more crude was spilled in train derailments than in the prior three decades combined, and there were four fiery explosions in North America in a year’s span, the worst being the derailment that killed 47 people and incinerated half the downtown in Lac Megantic, Quebec in July 2013.

Public Comments

In Benicia, a Draft Environmental Impact Report (DEIR) regarding the Valero project was released in June 2014 and promptly slammed by everyone from the state’s Attorney General Kamala Harris to the local group Benicians for a Safe and Healthy Community because it left out crucial information and failed to address the full scope of the project.

One of the biggest omissions in Valero’s DEIR was Union Pacific not being named as an official partner in the project. With the trains arriving via its rail lines, all logistics will come down to the railroad. Not only that, but the federal power granted to railroad companies preempts local and regional authority.This preemption is one of the biggest hurdles for communities that don’t want to see crude-by-rail come through their neighborhoods or want better safeguards.

The DEIR also doesn’t identify exactly what kind of North American crude would be arriving and from where. Different kinds of crude have different health and safety risks. Diluted bitumen can be nearly impossible to clean up in the event of a spill and Bakken crude has proved more explosive than other crude because of its chemical composition. It’s likely that some of the crude coming to Valero’s refinery would be from either or both sources.

Public comments on the DEIR closed on Sept. 15, and now all eyes are on the planning department to see what happens next in Benicia.

But the Valero project is just the tip of the iceberg in California.

In nearby Pittsburgh, 20 miles east of Benicia, residents pushed back against plans from WestPac Energy. The company had planned to lease land from BNSF Railway and build a new terminal to bring in a 100-car unit train of crude each day. The project is currently stalled.

But Phillips 66 has plans for a new rail unloading facility at a refinery in Nipomo, 200 miles south of the Bay Area in San Luis Obispo County, that would bring in five unit trains of crude a week, with 50,000 barrels per train.

Further south in Kern County in the heart of oil country, Plains All American just opened a crude by rail terminal that is permitted for a 100-car unit train each day. Another nearby project, Alon USA, received permission from the county for twice as much but is being challenged by lawsuits from environmental groups.

Closer to home, unit trains of Bakken crude are already arriving to a rail terminal owned by Kinder Morgan in Richmond. Kinder Morgan had been transporting ethanol, but the Bay Area Air Quality Management District allowed Kinder Morgan to offload unit trains of Bakken crude into tanker trucks.

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Photo by Sarah Craig

With all this crude-by-rail activity, some big picture thinking would be helpful. As Attorney General Kamala Harris wrote about the Benicia project, “There’s no consideration of cumulative impacts that could affect public safety and the environment by the proliferation of crude-by-rail projects proposed in California.”

A longer version of this story appeared on Faces of Fracking.

La Crosse Emergency Management reflects on training exercise

Repost from WXOW News19, La Crosse, Wisconsin
[Editor: At least the local officials in La Crosse didn’t issue the usual dum-de-dum-we-are-all-so-safe review like the ones following an event here in Benicia.  See  the Benicia Herald’s two part series on last October’s emergency training at Valero (click HERE and HERE), and my own view on our local heros’ dilemma.  Apologies for the commercial ad in the video.  – RS]

La Crosse Emergency Management reflects on training exercise

By Ginna Roe, Jan 06, 2015 

La Crosse, WI (WXOW) – La Crosse Emergency Management is reflecting on a training exercise they completed in October.

The goal was to develop response in the event of a crude oil spill.

The hypothetical scenario, a Burlington Northern Santa Fe train derailment carrying 150 thousand gallons of Bakken crude oil dumping directly into the Mississippi.

The 3-day simulation included rehabilitation drills for wildlife covered in oil along with communication drills for emergency responders.

Part of the goal was to learn more about the nature of crude oil and damage it can cause.

The take-away after the exercise was that emergency responders still have a lot of work to be prepared for a catastrophic spill.

“No community is every really going to be fully prepared for a massive catastrophic train derailment with a million gallons of crude oil spilling or igniting or getting into the sewers and streams, you just can’t be. But there are things that you can be doing to get yourself better prepared to take care of people and get them out of harms way,” Keith Butler, Emergency Management Coordinator said.

Butler said still have a long way but emergency training is constantly improving.

The next exercise drill will focus on evacuation plans.

Th biggest issue, he said, is communicating across the river.

ABC News: Low Oil Prices Unlikely to Hurt Railroads Much

Repost from ABC News
[Editor: Significant quote: “…even with oil prices falling off a cliff, industry analysts and railroad executives point out that crude shipments still make up just a sliver of the overall freight delivered by rail. What’s more, because fuel is such a huge cost in the industry, railroads are a direct beneficiary of those falling prices.”  – RS]

Low Oil Prices Unlikely to Hurt Railroads Much

By Josh Funk, AP Business News, Jan 5, 2015

The stunning collapse in oil prices over the past several months won’t derail the railroads’ profit engine even if it does slow the tremendous growth in crude shipments seen in recent years.

Carloads of crude oil spiked well over 4000 percent between 2008 and last year — from 9,500 carloads to 435,560 — as production boomed and the cost for a barrel of oil soared into the triple digits.

Those prices have tumbled severely, to just above $50 per barrel Friday, and that has rattled some of the investors who have plowed money into companies like Union Pacific, Norfolk Southern and CSX.

All three of those companies have seen their stock prices slip over the past month, along with major U.S. stock markets.

But even with oil prices falling off a cliff, industry analysts and railroad executives point out that crude shipments still make up just a sliver of the overall freight delivered by rail. What’s more, because fuel is such a huge cost in the industry, railroads are a direct beneficiary of those falling prices.

Crude oil shipments remain less than 2 percent of all the carloads major U.S. railroads deliver. Sub-$60 oil might force producers to rein in spending but railroads ? which spend hundreds of million of dollars every quarter on fuel? will see their costs fall away.

Those falling energy prices have also proven to be the equivalent of a massive tax cut for both consumers and businesses, and railroads stand to benefit from that as well.

Fueled by a rebounding employment as well as rising consumer and business confidence, U.S. economic growth reached a sizzling 5 percent annual rate last quarter, the government reported this month. The rebounding economy is likely to drive even greater demand for shipping.

Edward Jones analyst Logan Purk says the importance of crude oil shipments by rail seems to have been inflated by investors.

“It seems like whatever loss in business they see will be offset by the drop in fuel costs,” Purk said.

The crude oil business has provided a nice boost for railroads at a time when coal shipments were declining. Profits at the major U.S. railroads have been improving steadily along with the economy, reaching $13.4 billion in 2013, up from $11.9 billion in 2012 and $10.9 billion in 2011.

Officials from Union Pacific Corp, Norfolk Southern Corp., CSX Corp. and Canadian Pacific all tried to reassure investors about crude oil shipments during their latest investment conferences.

“I don’t think that we are going to see any knee-jerk reaction. I don’t think we are going to see anything stopped in the Bakken,” said Canadian Pacific CEO Hunter Harrison said of the massive oil and gas fields that stretch from North Dakota and Montana into Canada.

The Bakken region is one of the places where railroads are hauling the majority of the oil because pipeline capacity hasn’t been able to keep up with production.

Through the fall, North Dakota oil drillers remained on pace to set a sixth consecutive annual record for crude oil production.

Justin Kringstad, director of the North Dakota Pipeline Authority, said the lower prices will prompt oil companies to look for ways to reduce costs, but he’s not yet sure how much of an effect it will have on production in the region.

“It’s still a little early to make any firm assessments,” Kringstad said.