In a petition for rulemaking, Schneiderman asked the agency to require all crude transported by rail in the United States to achieve a vapor pressure of less than 9 pounds per square inch (psi). Vapor pressure is a key driver of the oil’s explosiveness and flammability, according to a press release issued by Schneiderman’s office.
In his petition, the attorney general argues that reducing crude oil vapor pressures is practical and necessary for minimizing the risk and severity of accidents involving tank cars.
Crude oils with the highest vapor pressures — including crude produced from the Bakken Shale formations in North Dakota — have the highest concentrations of propane, butane, ethane and other highly volatile gases, Schneiderman noted.
While the vapor pressure of crude involved in train accidents is often undisclosed, the vapor pressure in such accidents in which the levels were disclosed have exceeded 9 psi, including the crude train accident in Lac Megantic, Quebec, that caused 47 fatalities.
“Recent catastrophic rail accidents send a clear warning that we need to do whatever we can to reduce the dangers that crude oil shipments pose to communities across New York State,” Schneiderman said in a prepared statement. “In New York, trains carrying millions of gallons of crude oil routinely travel through our cities and towns without any limit on its explosiveness or flammability — which makes crude oil more likely to catch fire and explode in train accidents. … The federal government needs to close this extremely dangerous loophole, and ensure that residents of the communities in harm’s way of oil trains receive the greatest possible protection.”
By Samantha Page, Dec 3, 2015 2:43 PM
In this Feb. 16, 2015 photo, provided by the Transportation Safety Board of Canada, workers fight a fire after a crude oil train derailment south of south of Timmins, Ontario. CREDIT: AP PHOTO / TRANSPORTATION SAFETY BOARD OF CANADA
Recipe for disaster: Put a flammable substance under pressure into a metal container, then rumble it at 50 miles an hour down a metal rail, across hundreds or even thousands of miles, through towns and cities and over bodies of water. Repeat, as necessary.
The United States is coming to the end of the costliest year on record for oil train explosions, Bloomberg Newsreported Tuesday, as crude oil travelling by rail has reached its highest levels ever. This past year sawa town in North Dakota evacuatedafter a May derailment and explosion; another major derailment and explosion in Illinois in March; and a Februaryderailment and explosionin West Virginia, which destroyed a home, forced the evacuation of 1,000 people, and caused the governor to declare a state of emergency.
CREDIT: EIA DATA
At the beginning of 2010, the United States wasshippingabout one million barrels of oil by rail every month. By mid-2014, though, that number was around 25 million. Imports from Canada increased 50-fold during that time. The resulting surge in accidents — including a Quebec derailment in 2013 thatkilled 47 people— prompted the Department of Transportation to enact new safety rulesin May 2015.
But those rules didn’t preventcosts from ballooningfrom $7.5 million in damage in 2014 to $29.7 million in 2015, according to Department of Transportation data.
CREDIT: ENERGY INFORMATION ADMINISTRATION
Still, carloads of petroleum products have declined significantly since their peak in December 2014, and Bloomberg reporter Mathew Philips suggests that we are unlikely to see this amount of crude by rail in the future.
The reasons for this decline are two-fold. The United States sees crude by rail mainly from two places: Alberta, Canada’s tar sands and the Bakken oil fields of North Dakota, which are affected by two very different scenarios. The Alberta tar sands are expensive to develop and are far from refineries and consumers. That means developers who have already invested will turn to rail as a way to recoup expenses, but it is not their first choice. Without available, low-cost transportation, new development in the tar sands is economically unfeasible, Oil Change International’s Lorne Stockman told ThinkProgress. According to his group’s report “Lockdown: The End of Growth in the Tar Sands,” without more pipelines, tar sands development is going to hit a wall. (In other words, the group agrees with climate activists who say the Keystone decision really will keep more oil in the ground.
But even though stopping pipeline expansion could inhibit oil extraction in Canada, it’s not so simple in the United States. Developing the Bakken fields is significantly less expensive than in Alberta, and producers have — for the past five years — had no problem using rail to bring their cheap crude to the coasts, where it competed with more expensive overseas oil. Now that overseas prices have dropped, producers are building out more pipeline infrastructure, but without it, they could still compete on the open market.)
“It’s hard to say that if you don’t build the pipe, it won’t go by rail,” Stockman said. “We’ve seen in the last five years that it does go by rail.”
He admits this is probably not what anti-pipeline activists want to hear.
“There are local issues around [pipelines], landowner issues, and I totally sympathize with that,” he said. The answer just isn’t going to be found in infrastructure. “If you want to stop production in the Bakken, you should make the producers pay for their pollution.”
The fact is, there is no safe way to transport oil. Studieshave shownthat while trains spill more often, pipelines spill more oil per incident. When the new regulations came out in 2014, environmentalists — and some legislators — criticized them as not going far enough. Because the realities of transporting an explosive material are pretty scary: while the new regulations lower allowable speeds, tests have shown that the cars can be punctured travelling atless than 20 miles an hour. The new speed limit is 50 miles an hour.
This week, New York Attorney General Eric Schneiderman filed a petition to reduce the pressure of crude rail cars.
“In New York, trains carrying millions of gallons of crude oil routinely travel through our cities and towns without any limit on its explosiveness or flammability – which makes crude oil more likely to catch fire and explode in train accidents,” Schneiderman said in an emailed statement. “The federal government needs to close this extremely dangerous loophole, and ensure that residents of the communities in harm’s way of oil trains receive the greatest possible protection.”
How Cheap Crude Stalled America’s Booming Oil Trains
It was a record year for oil train mishaps—and the year crude-by-rail hit the brakes.
By Matthew Philips , December 2, 2015 – 4:00 AM PST
David Wilson/Flickr
It’s been several months since an oil train accident grabbed big headlines—but not because there haven’t been any. A single weekend in November sawtwo trains derail in Wisconsin. The first spilled about 20,000 gallons of ethanol into the Mississippi River, followed a day later by a spill of about 1,000 gallons of North Dakota Bakken crude.
This year has already been the costliest by far for crude train explosions. Derailments in 2015 have caused $29.7 million in damage, according to data from the U.S. Department of Transportation, a huge increase from $7.5 million in 2014. Most of this year’s price tag can be attributed to two crashes within a three-week span. The Feb. 16 derailment of a CSX train in West Virginia triggered a massive explosion near a cluster of homes along the Kanawha River and led to more than $23 million in damage. A BNSF train that derailed and explodedin Illinois on March 5 caused an additional $5.5 million in damage. Both trains were carrying highly explosive crude from North Dakota.
The lesser-noticed recent accidents haven’t come with explosions ortowering fireballs. At least some of the ruptured tank cars were the newer-model CPC-1232, which are supposed to be less likely to split open. The U.S. and Canada earlier this year announced stricter tank car standards, mandating further improvements in the future. Those rules will cost companies—mostly those that ship crude—an estimated $2.5 billion from 2015 to 2034; government estimates suggest the benefits will range from $912 million to $2.9 billion, presumably from fewer accidents.
But even without changing safety standards, there’s reason to suspect that costly train accidents will decline. While 2015 will go down as the worst year for crude train disasters, it’s also shaping up to be the year crude-by-rail hit the brakes. The crash in prices has slowed activity in the oilpatch and reduced the amount of petroleum riding the rails. The number of train carloads carrying petroleum has fallen 30 percent through Nov. 20 since peaking in December 2014, according to the American Association of Railroads. The monthly data on crude-by-rail shipments kept by the U.S. government lags a few months behind, but as of September those shipments had dropped 21 percent from their peak in January 2015.
Rail shipments of petroleum are down 30 percent in 2015.
This marks the first sustained decline in crude-by-rail traffic since it took off in 2009, jumping an astounding 5,000 percent in a little more than five years. Putting oil on trains was never the most efficient way to move it. It’s expensive and slow, not to mention dangerous. But in the places where the shale boom has unlocked the biggest amounts of crude, trains were often the only option.
That’s especially true in North Dakota, home to the Bakken formation, where oil production has risen from about 200,000 barrels a day to more than 1 million. By 2013,71 percent of Bakken crude was transported by train. North Dakota has almost single-handedly driven the crude-by-rail boom, accounting for80 percent of all oil traintraffic in the U.S. as of earlier this year.
Since the third quarter of 2014, however, two pipeline projects have been completed in North Dakota, increasing the amount of oil that can be piped out of the state by nearly 200,000 barrels a day. There’s also a new refinery that opened earlier this year, reducing the amount of oil that needs to be railed down to the large refineries outside Chicago. Since 2011, North Dakota’s combined pipeline and refining capacity has doubled, from 400,000 barrels a day to 800,000. By the end of 2017 it’s slated to double again, to 1.5 million barrels a day.
Oil traders now have options for how to move oil out of North Dakota. But there’s another reason they’re pulling back on the amount they put on the rails: It’s not as profitable as it used to be. Early on, the shale boom created an enormous glut of crude that ended up stuck in the middle of the country. Getting it to market meant putting it on trucks and trains and barges, which was expensive and slow. So the price of U.S. crude fell compared with international prices. By October 2011 a barrel of U.S. oil pegged to the West Texas Intermediate contract that trades in New York was $27 cheaper than an equivalent barrel priced against the Brent contract trading in London.
That differential led to one of thebiggest arbitrage opportunities the oil market has ever seen. Savvy traders could buy cheap oil in the middle of the U.S., find a way to move it, and sell it for higher prices along the coasts, where the market is more exposed to Brent prices. The price to send a barrel of oil by rail from North Dakota down to the U.S. Gulf Coast was about $9 or $10; the rest became profit. Over the past few years, millions of barrels of oil in North Dakota got loaded onto trainsbound for the East Coastand the Gulf.
But as the U.S. oil infrastructure reoriented around the shale boom and pipelines began moving domestic oil to the coasts, instead of moving imports into the heartland, the spread between WTI and Brent has narrowed. The crash in global oil prices has closed the gap even further, to the point that a barrel of WTI crude is now just $3 cheaper than a barrel of Brent. That’s not enough to make money if you have to ship it hundreds of miles on a train. Refineries in Texas and Louisiana have switched from railing oil in from North Dakota to importing more crude from West Africa.
As a result, there’s now a glut of tank cars on the market. According to energy research firm Genscape,lease rates have fallenfrom $2,500 a month to about $500. Big refining companies, which are among the largest crude-by-rail shippers, are shifting their strategy and trying to lock in prices for three and four years rather than just a few months.
David Vernon, a transportation analyst at Sanford C. Bernstein, thinks crude-by-rail traffic has peaked. “The heyday is over,” he said. “The high-water mark has likely been set in terms of volumes.”
Canada’s growing oil production is expected to outpace its capacity of new pipelines.
Citigroup
Canada, however, could be a different story. Although the country’s oil sands industry is struggling against low prices, there are projects currently under construction that will be finished over the next few years. That extra oil will have to move somehow, and as of now, trains are looking like a strong candidate. Canada’s oil production is forecast to grow faster than pipelines can be built, especially now that the Keystone XL is officially dead. So while the number of trains loaded with crude crisscrossing the U.S. may diminish in the next few years, rail may remain a viable option in Canada.
Train safety provisions included in U.S. transportation bill
By Crocker Stephenson, Dec. 2, 2015
Bakken oil trains rumble through downtown Milwaukee at 133 W. Oregon St., Milwaukee. A federal bill includes provisions requiring railroads to share safety information regarding trains and bridges with local officials. Image credit: Journal Sentinel files
The mammoth five-year federal transportation bill that lawmakers hope to send to President Barack Obama early next week includes provisions, championed by Sen. Tammy Baldwin (D-Wis.), that would require railroads to share critical safety information with local communities.
“This legislation provides the transparency we’ve been begging and asking Canadian Pacific railroad for,” Milwaukee Common Council President Michael Murphy said during a news conference Wednesday outside a fire station at 100 W. Virginia St.
“It isn’t too much to ask a company that is using our public right of way to let us know if their bridges are safe and secure,” he said.
As if to illustrate Murphy’s point, a Canadian Pacific train pulling oil tankers rumbled across the bridge over S. 1st St. a few blocks to the north.
Milwaukee is in a rail corridor that ferries crude oil from North Dakota to refineries in metropolitan Chicago and beyond.
Since spring, Murphy and other city officials have been sparring with Canadian Pacific over its refusal to share with city engineers the results of its inspection of a rusty-looking bridge crossing W. Oregon St. at S. 1st St.
Canadian Pacific officials have insisted the bridge is safe, but they announced in August that the railroad plans to encase 13 of the bridge’s steel columns in concrete to protect them from further corrosion.
“Five to six months ago, the Milwaukee Common Council asked for information on bridges,” Ald. Terry Witkowski said. “We were greeted with silence.”
“With the stroke of a pen, the ball game has changed,” he said.
Concern over trains hauling potentially explosive fuel tankers through the heart of Milwaukee’s Fifth Ward increased last month when two petroleum-filled trains derailed in Wisconsin in a single week.
“Wisconsin first-responders should be applauded for their reaction to these derailments,” Baldwin said. “But railroad companies need to do more.”
According to Baldwin’s office, the bipartisan transportation bill contains several provisions pushed by the senator:
Transparency: A provision would require railroads to provide local officials with a public version of the most recent bridge inspection report
Real-time reporting: Currently, information about hazardous materials being carried through communities is available to first-responders only after an incident has occurred. A provision would require that information to be shared before a train carrying hazardous materials arrives in their jurisdiction.
“The thing we need is information,” Milwaukee Fire Chief Mark Rohlfing said. “So the more transparent our haulers become, the more prepared we can be.”
“Having the city have this information gives the Department of Public Works, our city engineer, access to information so that we can make an evaluation, so we can work with railroads to make sure we have safe rail crossings,” Mayor Tom Barrett said.
The roughly $300 billion transportation bill would also require the Department of Transportation to initiate a study on the appropriate level of insurance railroads hauling hazardous insurance should have, and it would ask the DOT to require that railroads improve their plans for responding to catastrophic oil discharges.
