Tag Archives: Crude by Rail

Bakken Crude, Crude By Rail, Marine transport, Monterey Shale, Pacific Northwest

Reuters Exclusive: California getting more Bakken crude by barge than rail

Repost from Reuters
[Editor:  At the 9/11/14 Benicia Planning Commission meeting, John Hill, vice president and general manager of the Valero Benicia Refinery, stated that Bakken crude has been refined at Valero.  Commissioner Steve Young asked Hill to confirm his statement, which he did.  Young then asked the means of transport, and Hill replied “by barge.”  Our communities might well ask when, how much, and with what new volatile emissions output, etc….  – RS]

Exclusive: California getting more Bakken crude by barge than rail

By Rory Carroll, SAN FRANCISCO, Oct 23, 2014
A pumpjack brings oil to the surface in the Monterey Shale, California, April 29, 2013. REUTERS/Lucy Nicholson
A pumpjack brings oil to the surface in the Monterey Shale, California, April 29, 2013. REUTERS/Lucy Nicholson

(Reuters) – Shipments of Bakken crude oil from North Dakota to California by barge have quietly overtaken those by train for the first time, showing how the state’s isolated refiners are using any means necessary to tap into the nation’s shale oil boom.

While tough permitting rules and growing resistance by environmentalists have slowed efforts to build new rail terminals within California itself, a little-known barge port in Oregon has been steadily ramping up shipments to the state, a flow expected to accelerate next year.

From January through June, California received 940,500 barrels of the North Dakota crude oil from barges loaded at terminals in the Pacific Northwest, the highest rate ever, Gordon Schrempf, senior fuels analyst for the California Energy Commission, told Reuters.

Bakken crude transported to California on railcars, which has gained widespread attention after a series of fiery train derailments in North America, accounted for just 702,135 barrels over the same time period, according to published figures.

“We’re seeing marine transport of Bakken crude outpace rail for the first time,” Schrempf said. In 2013, rail shipments of 1.35 million barrels exceeded barge shipments of 1.33 million barrels. The year before, almost no crude arrived by barge.

Bakken shipments by barge and rail may only comprise a tiny portion of the crude California imports, at about 5,200 and 4,000 barrels per day respectively, with Alaska supplying over 20 times as much crude.

But companies, including refiner Tesoro Corp and logistics company NuStar Energy LP, have plans to significantly expand that volume with new terminals along the Pacific Northwest that would unload trains from North Dakota and pump the oil onto tankers.

They would help make California a major destination for Bakken oil, a trend that has drawn objections from environmental groups who have been seeking to stem the tide, often by blocking local permits to built oil-train offloading terminals.

“Bringing it in by barge gets you around cumbersome permitting and the growing citizen opposition to crude-by-rail,” said Lorne Stockman, research director of Oil Change International, a research and advocacy organization working on energy, climate and environmental issues.

To be sure, their objections may differ. The principle concern over transporting Bakken by rail is the risk that a derailment could cause a deadly explosion similar to the one in Lac Megantic, Quebec, last year that killed 47 people.

There is no suggestion that waterborne oil transportation poses similar explosive risks, although the environmental impact of a barge spill could be much greater.

“The barges are designed to carry the grade of oil that the Bakken is,” said Ted Mar, prevention branch chief for the state’s Office of Spill Prevention and Response and a former member of the Coast Guard.

That is small comfort to environmentalists, who oppose all forms of oil production, in particular shale crudes like Bakken, extracted through hydraulic fracking they fear contributes to global warming and poses a potential risk to water supplies.

“Our end goal is to leave these more dangerous, unconventional fuels in the ground,” said Jess Dervin-Ackerman, conservation manager for the San Francisco Bay Chapter of the Sierra Club.

SMALLER BUT CLOSER

With state production declining since the mid-80s, California’s refiners have increasingly relied on deliveries of crude by oceangoing tankers carrying 500,000 barrels or more from places like Alaska, Saudi Arabia, Ecuador and Iraq, which supplied two-thirds of their needs last year.

The refiners have been scrambling for several years to get better access to cheaper domestic shale oil by any means necessary, replacing costlier imports. But with the big shale fields to the east of the Rocky Mountains and a lack of major pipelines, it has not been easy.

The articulated tug barges (ATBs) now arriving are tiny by comparison to the tankers, carrying as little as 50,000 barrels.

Such shipments cost more than bringing Bakken directly to California by rail, but easily plug into existing port and terminal infrastructure – avoiding the need for new permitting that can take years.

While many are working to build out their own rail facilities, a handful of major rail-to-barge terminals along the Pacific Northwest coast that would ship over 500,000 bpd of Bakken crude have been in the works for several years. But most are incomplete, and several face delays.

One of the few exceptions is an idled ethanol terminal and processing plant in Clatskanie, Oregon, run by Global Partners LP. The facility, on a small canal that feeds into the Columbia River, began quietly transshipping oil from trains to barges in 2012 and is now receiving so-called “unit trains”, mile-long trains that only carry crude oil.

“Unit train volume into our Clatskanie terminal is up, and interest in the facility from prospective customers is at an all-time high,” Global Partners Chief Executive Eric Slifka said in August.

Global Partners did not respond to a request for comment.

Later that month, the firm received a new air permit from the Oregon Department of Environmental Quality that will allow it to ship as much as 1.84 billion gallons of volatile liquids, or some 120,000 bpd. It did not specify crude or ethanol.

Much of those shipments moved north to refineries in Washington, including BP’s Cherry Point in Puget Sound, and Phillips 66’s Ferndale facility. But both those plants are expanding their own facilities to bring more Bakken in by rail, likely curbing some demand for barges.

Top oil barge operator Kirby Corp, which runs vessels out of Clatskanie, is currently building two larger 185,000-barrel barges to deploy on the coast next autumn.

Environmentalists say they are monitoring the rise in Bakken-by-barge deliveries.

“This won’t pull our focus away from crude by rail, but rather expand the lens with which we look at dangers of Bakken entering our communities,” said the Sierra Club’s Dervin-Ackerman.

(Reporting by Rory Carroll, editing by Jonathan Leff and Marguerita Choy)
Bakken Crude, Crude By Rail, Massive increase in crude-by-rail, Pacific Northwest, Rail traffic, Spill prevention and response

Tacoma City Councilman and County Executive form Safe Energy Leadership Alliance, call for action

Repost from The News Tribune, Tacoma WA

Pierce County gets all risks, no rewards for surging oil train traffic

By Ryan Mello and Dow Constantine, October 24, 2014
Rail Delays
An oil-tank train with crude oil from the Bakken shale fields of North Dakota travels near Staples, Minnesota, in April. MIKE CRONIN — The Associated Press file

As this editorial page has noted, Washington has seen a stunning increase in the amount of Bakken crude oil transported on our railroads, to an estimated 2.87 billion gallons each year. Much of that highly flammable oil rolls across the central Puget Sound region, through downtown Tacoma and past Steilacoom in aging tank cars.

The surge in train traffic has created an unprecedented risk to our people, our economy, our traffic and our environment. Our communities assume all of the risks while big oil companies get all of the rewards.

There’s the immediate risk to public safety when flammable fuel passes through heavily populated areas like Tacoma and Seattle and past our neighborhoods, schools and parks. Since July 2013, there have been nine serious train derailments across North America – more than we experienced during the past four decades combined. An oil-train explosion last year in Quebec, Canada, killed 47 people and wiped out half a downtown area.

There’s also the increased risk of oil spills contaminating Puget Sound and undermining the progress we’ve made in waterfront development and cleaning up the Foss Waterway. It’s a scenario we saw earlier this year when an oil train spilled more than 20,000 gallons of crude oil into the James River just outside Lynchburg, Virginia.

We work hard to ensure that our first responders have the equipment and training they need to respond to oil-train derailments, spills and fires. But we need state and federal action to prevent these potentially life-threatening tragedies from occurring in the first place.

That is why we brought together more than 100 other elected leaders from across the Northwest and British Columbia to form the Safe Energy Leadership Alliance. It’s a broad coalition of local leaders from urban and rural areas who share a mission to better understand the potential safety and economic impacts from oil and coal trains, and call for stronger safety standards.

Having multiple mile-long trains – each carrying 3 million gallons of crude oil – roll through Pierce and King counties snarls our traffic and makes it more difficult for our emergency personnel to respond to calls. The proposed increase in oil traffic would also harm our local businesses, manufacturers and farmers who rely on our limited rail capacity to transport their goods to overseas markets.

Displacing Washington state agriculture and manufactured products that create jobs to make way for crude oil would benefit only oil companies.

Perhaps what’s most concerning is that there is the potential for all of these risks and impacts to substantially increase over the next six years if proposed facilities are built along the Pacific coast.

The Department of Ecology estimates that the amount of crude oil that comes through our state could triple – to nearly 9 billion gallons each year – by 2020. The number of fully loaded oil trains that cross our state each week could go from 19 to more than 100 within the next few years.

That’s why we applaud Gov. Jay Inslee for fast-tracking the state’s Marine and Rail Oil Transportation study and the Department of Ecology for hosting a public meeting Thursday in Olympia (see box). This study shines a light on the risks and costs to our communities, and makes recommendations to strengthen disclosure of hazards and emergency preparedness.

We urge our state lawmakers to act swiftly on these recommendations, and enact provisions that maintain public safety. The costs to protect our communities and prevent delays in rail crossings should fall to the oil industry and not local governments.

Our long-term goal is to establish the Northwest as a global exporter of clean energy. In the meantime, we will work together to ensure that oil and coal companies don’t take up our limited rail space, put our communities at risk and harm our local economy.

Tacoma City Councilman Ryan Mello and King County Executive Dow Constantine are members of the Safe Energy Leadership Alliance.
Read more here: http://www.thenewstribune.com/2014/10/24/3448437_pierce-county-gets-all-risks-no.html?sp=/99/447/&rh=1#storylink=cpy

 

Bakken Crude, Crude By Rail, DOT-111, Emergency Readiness & Response, Federal Regulation (U.S.), Hazmat notification, Tank car design, Train braking systems, Volatile gases

Fed Measures on Crude Oil Fall Short, Put Protected Estuaries and Heritage Areas at Risk

Repost from HuffPost GREEN, The Blog
[Editor: Note reference near the end on federally designated National Heritage Areas and Estuaries of National Significance which “require special protection from potential explosions and spills. Rerouting bomb trains away from such specially designated regions would avert a disaster-waiting-to-happen to prime assets along their rail lines.”   The San Francisco Estuary Partnership is one of 28 Estuaries of National Significance.  (I am trying to confirm that the Sacramento-San Joaquin Delta is a National Heritage Area – their website is out of date.)  How might these agencies be brought into the discussion on Valero Crude By Rail?    – RS] 

Fed Measures on Crude Oil Fall Short, Put Hudson River at Risk

By Ned Sullivan, President, Scenic Hudson and Paul Gallay, President, Hudson Riverkeeper, 10/21/2014

Last May, we wrote about how the Hudson River Valley has become a virtual pipeline for the transport of highly flammable Bakken crude oil in unsafe DOT-111 railcars–the same tankers whose derailment has caused numerous explosions across the U.S. and the death of 47 people in Lac-Megantic, Canada.

Since then, very little has changed, which means the situation has just gotten worse.

Each day, more than 320 of these oil-laden cars continue to pass through our communities and along the shores of the Hudson River, one of the world’s most biologically diverse tidal estuaries. To date, we’ve escaped disaster, although three trains pulling empty DOT-111s have derailed in the Hudson Valley. Each time a rail accident occurs in the region, as it did just last week, the environmental community holds its breath, expecting the worst.

What will happen if cars full of Bakken crude do go off the tracks? The federal Pipeline and Hazardous Material Safety Administration (PHMSA), quoting the National Transportation Safety Board (NTSB), recently provided the answer: They “can almost always be expected to breach,” making them “vulnerable to fire.” The result would be catastrophic to the public health, vital natural and historic resources, and drinking water supplies of a region stretching from Albany to New York Harbor. It would cause long-lasting, if not permanent, damage to the estuary’s entire ecosystem and the foundation of a vibrant, $4.75-billion tourism economy.

Both Scenic Hudson and Riverkeeper have been advocating vigorously for increased federal protections, including an immediate ban on the use of DOT-111s for transporting crude. Therefore, we were bitterly disappointed and frankly frustrated by new draft regulations proposed by the PHMSA regarding tanker redesign and other measures for reducing the risks of explosions and spills from these “bomb trains.” They just don’t go far enough fast enough, meaning our communities remain at grave risk. It also means the proposed rules don’t comply with federal law, which requires strict safety upgrades that will protect the public.

In formal comments on the regulations our organizations submitted jointly, we outline how the PHMSA’s rules are replete with loopholes and weak safety proposals.

  • Despite acknowledging the safety hazards of DOT-111s, the proposed regulations would very slowly phase out their use for transporting Bakken crude and allow 23,000 of these outdated, dangerous cars to remain on the rails for shipping heavy Canadian tar sands crude, which presents different but equally serious safety and environmental risks.
  • The regulations fail to require full disclosure of rail traffic information to first responders, and instead ask the industry if it would prefer to keep this information confidential.
  • The regulations fail to require the most protective braking improvements or speed restrictions, and fail to even consider limits on the length of trains that could reduce accident risks and impacts of a derailment.
  • The regulations would allow railroads to continue operating 120-car trains of Bakken crude oil without requiring any train-specific spill response plans–despite the fact that a 120-car train carries as much oil as an oil barge or tanker, both of which must have spill response plans approved by the Coast Guard.

Put simply, these rules defer to the rail and oil industries at every turn–and they won’t stop the next bomb train disaster. As the NTSB warned in its official comments on these proposed rules, “Each delay in implementing a new design requirement allows the construction of more insufficiently protected tank cars that will both increase the immediate risks to communities and require costly modification later.” Further, the NTSB concludes that the government’s proposed standards for new and existing tank cars offer options that “do not achieve an acceptable level of safety and protection.”

We deserve real protection for our communities and the environment. And we deserve it now.

For these reasons, Riverkeeper and Scenic Hudson have called on the PHMSA to issue an emergency order requiring immediate adoption of the most stringent tank car standards, speed restrictions and use of electronic controlled pneumatic braking in all trains carrying crude, as well as closing loopholes in the rule that leave heavy tar sands crude and trains carrying fewer than 20 cars of Bakken crude completely unaddressed. (Scenic Hudson also has called for rules requiring Bakken crude to be processed at its source in North Dakota, making it much less volatile for shipment. This is done at many Texas oil fields.)

In addition, we are calling on federal rail regulators to designate the Hudson River Valley, as well as other similarly situated regions, highly important natural and cultural resources under PHMSA routing regulations. This means that the natural and cultural resources within this federally designated National Heritage Area (one of only 49) and Estuary of National Significance (one of 28) require special protection from potential explosions and spills. Rerouting bomb trains away from such specially designated regions would avert a disaster-waiting-to-happen to prime assets along their rail lines. In the Hudson Valley, those assets include six drinking water intakes; 91 state, county and municipal parks; 40 Significant Coastal Fish and Wildlife Areas; nine colleges; 69 public schools and 80 medical facilities.

The federal government has the responsibility to ensure the public’s safety. Until Washington steps up and fulfills this obligation, we’ll have to keep on holding our breath.

Bakken Crude, Crude By Rail, Derailment, Emergency Readiness & Response, Explosion, Federal Regulation (U.S.), Oil stabilization, State regulation, Volatility

National Public Radio: Fiery Oil-Train Derailments Prompt Calls For Less Flammable Oil

Repost from National Public Radio
[Editor: An excellent overview of efforts to regulate the volatility of Bakken Crude.  Audio appears first below, followed by text version.  Significant quote: “Energy economist Philip Verleger, says the resistance is about money. ‘The industry never wants to take steps which increase the cost of production, even if it’s in the best interests of everybody,’ he says. Verleger says the opposition to proposed safety rules is short-sighted, and that the industry could actually hurt itself if there’s another serious incident. ‘I think the movement of crude oil by rail is one accident away from being terminated,’ Verleger says.”  – RS]

Fiery Oil-Train Derailments Prompt Calls For Less Flammable Oil

by Emily Guerin,

A fireball goes up at the site of an oil train derailment in Casselton, N.D., in this Dec. 30 photo. The fiery crash left an ominous cloud over the town and led some residents to evacuate.
A fireball goes up at the site of an oil train derailment in Casselton, N.D., in this Dec. 30 photo. The fiery crash left an ominous cloud over the town and led some residents to evacuate. Bruce Crummy/AP

Once a day, a train carrying crude oil from North Dakota’s Bakken oil fields rumbles through Bismarck, N.D., just a stone’s throw from a downtown park.

The Bakken fields produce more than 1 million barrels of oil a day, making the state the nation’s second-largest oil producer after Texas. But a dearth of pipelines means that most of that oil leaves the state by train — trains that run next to homes and through downtowns.

After several fiery accidents, oil companies are under pressure to make their oil less explosive before loading it onto rail cars. But oil companies say rules requiring those modifications will create more problems than they solve.

The trains passing through Bismarck worry Lynn Wolff, an activist with the environmental group Dakota Resource Council. “Last December we got the wake-up call,” he says. “That was the explosion and derailment of an oil train in Casselton, N.D.”

Wolff is referring to a crash in farmland just outside the small town of Casselton. No one was hurt, but the crash could have been deadly had it happened in town.

This summer, Bismarck officials ran through a simulated oil train derailment, with responders operating on the assumption that some of the town’s buildings would be devastated or destroyed, says Gary Stockert, Bismarck’s emergency manager. “We exercised with the assumption that we had over 60 or 70 casualties.”

Around the country, other cities and towns with oil train traffic are preparing for similar disasters.

In neighboring Minnesota, Gov. Mark Dayton “is concerned primarily about the safety of people along oil train routes, and in particular about the fact that this is a very volatile oil,” says Dave Christianson, an official with the Minnesota Department of Transportation.

Dayton has joined activists in asking North Dakota to force oil companies to “stabilize” the oil — to make it less explosive by separating out the flammable liquids.

Last month, North Dakota Gov. Jack Dalrymple convened a public hearing on the idea. Keith Lilie, an operations and maintenance manager for Statoil, which has a big presence in the Bakken, testified in front of a room full of oilmen in suits and cowboy boots who came to the hearing from places like Oklahoma City and Houston.

Lilie said he opposes having to build expensive tanks to heat the oil and separate out flammable liquids, like butane.

“Statoil believes the current conditioning of crude oil is sufficient for safely transporting Bakken crude oil by truck, rail and pipeline,” he said.

Eric Bayes, general manager of Oasis Petroleum’s operations in the Bakken, also testified. He asked what companies are supposed to do with those explosive liquids once they’re separated from the oil.

The stabilization process, he says, would “create another product stream you have no infrastructure in place for.”

But energy economist Philip Verleger, says the resistance is about money. “The industry never wants to take steps which increase the cost of production, even if it’s in the best interests of everybody,” he says.

Verleger says the opposition to proposed safety rules is short-sighted, and that the industry could actually hurt itself if there’s another serious incident. “I think the movement of crude oil by rail is one accident away from being terminated,” Verleger says.

Activist Lynn Wolff supports new rules that would make the oil less explosive, and says such regulation would protect people beyond North Dakota. “These bomb trains have been in Virginia and Alabama and blown up there as well,” he says.

Federal officials in Washington are also considering ways to make oil trains safer, such as strengthening tank cars.

As for making the oil leaving the Bakken less flammable, officials in North Dakota say they’ll make a decision by the end of the year.

This story was reported with Inside Energy, a public media collaboration focusing on America’s energy issues.