State officials say Benicia underestimated oil train risks
Officials urge city to redo Valero refinery project safety analysis
By Tony Burchyns, 09/25/2014
State officials say Benicia has underestimated the risks of running oil trains through Roseville and other parts of Northern California to the Valero refinery.
In letter to the city last week, officials from the state Department of Fish and Wildlife’s Office of Spill Prevention and Response and the Public Utilities Commission called on the city to redo its safety analysis before allowing the refinery to receive two 50-car oil trains a day.
The letter follows similar critical comments from the Sacramento Area Council of Governments, the cities of Davis and Sacramento and the University of California at Davis. Environmental groups such as the Natural Resources Defense Council and San Francisco Baykeeper also have sent letters to Benicia expressing concerns about the project.
The state officials’ letter said that total potential derailments attributable to the plan, including those outside California, should be considered in the risk study. Officials also said that the city’s draft environmental impact report paid insufficient attention to train accidents other than derailments.
“The analyses of environmental impacts, including the risk and consequences of derailments, should not be limited to the section of track between Roseville and Benicia, and track at the refinery itself,” officials wrote. “The analyses should also cover the many miles of track, the distance of which will vary depending on entry point into the state, between the state border and Roseville.”
Valero’s project description identifies North America, Texas and other locations as possible sources of crude, but direct routes through Southern California and other areas of the state and country are not analyzed.
City officials have said their analysis was limited to the Union Pacific line between Benicia and Roseville because the other rail routes are unknown or haven’t been disclosed.
The letter also criticized the city’s finding that the risk of train spills of more than 100 gallons between Rosville to Benicia would be once in 111 years. Critics have said the analysis is flawed because it relies on rail safety data that predates the nation’s crude-by-rail boom.
The letter asserts that the city’s derailment and accident rate calculations are problematic and the legal enforceability of Valero’s commitment to use tank cars that meet that highest safety standards is unclear.
Benicia has declined to comment thus far on the numerous letters received during the report’s public comment period that ended Sept. 15. However, the city plans to respond to the comments before the project’s next public hearing, which has yet to be set.
Repost from Reuters [Editor: Watch industry lobbying efforts as the scramble for power ensues. For instance … note the posturing in this article by Lynn Helms, director of the North Dakota Department of Mineral Resources, who reportedly said “dealings with Quarterman have improved in recent months as oil train hysteria has subsided.” Nice to know that our concern for safety and clean air is so easily dismissed as hysteria. – RS]
Quarterman, regulator for U.S. oil trains, to step down: sources
By Patrick Rucker, WASHINGTON, Sep 24, 2014
PHMSA Administrator Cynthia Quarterman, left, during House testimony (Photo by Scott J. Ferrell/Congressional Quarterly)
(Reuters) – Cynthia Quarterman, the federal regulator who oversaw expansion of the U.S. oil train sector and the fallout from several fiery derailments, will step down, two sources familiar with her intentions said on Wednesday.
As administrator of the Pipeline and Hazardous Materials Safety Administration (PHMSA) since November 2009, Quarterman has been a leading safety official as oil train deliveries from North Dakota neared 750,000 barrels a day and spectacular derailments in the United States and Canada raised concerns about such shipments.
PHMSA, an agency within the U.S. Department of Transportation, has been under scrutiny for more than a year as officials have tried to respond to the hazards posed by oil train cargoes, which have grown in volume along with a rise in domestic crude production.
PHMSA did not confirm Quarterman’s departure, which reportedly will come next week.
Quarterman, previously an attorney whose practice focused on the transportation and energy industries, was often the face of federal policy, defending government actions to lawmakers, industry and safety advocates.
“If you have upset everyone a little, you’re probably doing a good job,” said Brigham McCown, a former PHMSA head.
“The prevailing view is she’s done a good job in challenging times,” McCown said.
Among other things PHMSA has been tasked with writing new safety standards for oil trains and other hazardous cargo. Tuesday marks a deadline for public comment on the proposed safety rules.
Quarterman and other regulators have often been caught between energy interests who argue oil-by-rail safety concerns are inflated and political leaders who represent communities along the tracks.
Lynn Helms, director of the North Dakota Department of Mineral Resources, said dealings with Quarterman have improved in recent months as oil train hysteria has subsided.
“As we moved to more of a science-based approach, things smoothed out,” he said. “Our more recent work with Quarterman and (U.S. Transportation Secretary Anthony) Foxx has been very, very positive.”
Another major incident on Quarterman’s watch was the pipeline rupture in Mayflower, Arkansas, in March 2013. About 5,000 barrels of crude oil spilled from a line that is part of Exxon Mobil’s Pegasus pipeline from Illinois to Texas.
(Reporting by Patrick Rucker; additional reporting by Ernest Scheyder in North Dakota; Editing by Ros Krasny and Sandra Maler)
Nebraska has emerged as ground zero in oil transport showdown
September 21, 2014, By Russell Hubbard
SARAH HOFFMAN/THE WORLD-HERALD | Oakland, Nebraska, and the tracks that carry trains through town have been together for more than 100 years. But trains hauling crude oil in tanker cars through Oakland and other parts of the state are a recent development, and concerns about safety grow. Oil pipelines such as the proposed Keystone XL have their opponents as well.
OAKLAND, Neb. — If you visit here and turn off Oakland Avenue toward the railroad tracks, you just might find Brendan Murray prowling up and down the street, cataloging the cracks in the pavement and the scars on the buildings.
SARAH HOFFMAN/THE WORLD-HERALD | Brendan Murray holds a piece of a building that fell near the tracks. He often walks Oakland Avenue cataloging cracks in the pavement and on buildings that he suspects are caused by vibrations from oil trains.
The owner of an apartment building facing the railroad tracks says problems with his 100-year-old structure accelerated with the massive increase in BNSF Railway trains hauling crude oil in tanker cars. Murray also says a derailment and crude oil fire would be deadly for Oakland, population 1,244.
“Keep it underground,” Murray says, referring to transporting crude by pipeline.
Not so fast, says Jane Kleeb. She is not a fan of crude trains either, but she is also the director of Bold Nebraska, the group opposed to construction of the Keystone XL pipeline. It would bring 1 million barrels of crude oil per day across the state.
Kleeb said her group doesn’t expect the world economy to forgo fossil fuels and survive on renewables right now. But she said the pipeline proposed to transport northern crudes to refineries presents too much environmental risk.
“Accidents are going to happen and it is Nebraska that is going to wind up paying for it,” Kleeb said.
All of which leaves a rather obvious question: If neither by train nor pipeline, just how is oil supposed to get from where it is produced to where it is refined into fuels and other materials that power the U.S. economy?
With its main modes of transport assaulted on all sides, the petroleum industry faces a major showdown, and Nebraska is shaping up to be ground zero.
Central to both major U.S. railroads hauling crude oil — Union Pacific is based in Omaha and BNSF’s parent company is based here — the Cornhusker State is also the terminus of the existing Keystone pipeline and is the proposed ending point for the much-debated and delayed Keystone XL.
“Some of the people who don’t want us to transport oil don’t want us to use oil,” said John Felmy, chief economist for the American Petroleum Institute, a group funded by oil companies. “We need to do a better job about telling our story, but we also need to be honest about the realities of energy.”
The United States last year consumed 6.89 billion barrels of petroleum products, producing 2.7 billion barrels itself, making it the global leader. Oil is everywhere — about 71 percent goes for gasoline and other fuels. Other common uses are rubber, fabrics and solvents.
There are no current replacements for oil, Felmy said, calling renewable energies promising and worthy of development but not an immediate substitute. And “choking off the supply points and the transport links would have serious implications for the economy,” Felmy said.
One of those transport links runs through Oakland. The rear of the buildings along Oakland Avenue, 20 or so brick and masonry two- and three-floor structures, face the north-south railroad tracks operated by BNSF Railway, the employer of 5,000 people in Nebraska that is owned by Omaha’s Berkshire Hathaway Inc.
The closest buildings, such as Murray’s 12-unit apartment building, are about 45 yards away.
The tracks and the town in Burt County have been together for more than 100 years. But the oil trains are a recent development. Oil shipments from North Dakota’s recently tapped shale formations first hit 800,000 barrels a day late last year, up from fewer than 100,000 barrels a day in 2010.
BNSF is by far the largest carrier, its oil trains entering Nebraska at South Sioux City from routes in Iowa. Oil has been a growth business for BNSF: Volumes from shale formations such as those in North Dakota have risen to 620,000 barrels per day last year, from 59,000 barrels per day in 2010.
Transporting crude has been a huge boost for BNSF, bought for $26 billion in 2009 by Omaha’s Berkshire Hathaway. BNSF operating revenue, the main financial metric by which railroads are gauged, has risen almost 60 percent since 2009, to about $22 billion last year from $14 billion.
“You can feel the ground surging when they come through now,” said the 72-year-old Murray, a graduate of Omaha’s Benson High School who later owned a general contracting company. “It’s just that the railroad has always been here and people don’t pay it much attention anymore.”
A tour of Murray’s street reveals a collapsed brick wall, lots of hairline cracks and loose masonry. Murray acknowledges that most of the buildings are 100 years old or older, and that he can’t prove the cause. But he said he suspects the culprits are the heavy liquid cargo and the increased frequency of trains passing by because of sharply higher crude shipments.
BNSF says: Nonsense. “We know of no mandated statutes requiring maximum or minimum weights for trains, although there are different weight rails according to the type, size and speed of trains,” said BNSF spokeswoman Roxanne Butler.
The railroads say oil by rail, while the subject of much debate, is quite safe.
In 2012, according to the Association of American Railroads, the incident rate for release of hazardous materials from rail cars was 0.013 per thousand carloads, down from 0.14 in 1980. That means, the association says, that 99.99 percent of hazardous rail cargo shipments are incident-free.
It is a highly regulated industry. Federal regulators set the standards for hauling crude and other hazardous materials, from the route selection and track inspections to train speeds and personnel training, the railroad association says.
“According to the Federal Railroad Administration, 2013 was the safest year in history for the rail industry,” said BNSF’s Butler. “In 2013, BNSF experienced the fewest number of mainline derailments in its history. Rail is the safest mode of land transportation for freight in general and is one of the safest ways to transport crude oil and hazardous materials.”
Butler said BNSF considers all accidents preventable, and is spending $5 billion this year on capital improvements. The Fort Worth, Texas-based company, about tied with Union Pacific as largest U.S. railroad in 2013 operating revenue, also inspects track more frequently than required by regulators, Butler said.
Union Pacific is spending $4.1 billion on capital improvements this year, much of that related to track safety.
U.P. Chief Executive Jack Koraleski said the industry also is working with the Department of Transportation to make existing crude tank cars safer, and to develop a new and stronger one.
There has never been a fatal U.S. oil-train incident, though 47 people were killed last year when one derailed and blew up in Quebec, Canada.
Koraleski, whose company employs about 8,000 people in Nebraska, said the probabilities of such accidents are small and the trade-offs worth it.
“We have been hauling crude by rail for a long time,” said Koraleski, whose oil shipments rose 20 percent last year. “If the pipelines don’t, and the railroads don’t, the alternatives are fully negative for the U.S. economy.”
As for the Keystone XL pipeline proposed by pipeline operator TransCanada, it is on hold pending permit approval by President Barack Obama.
It should not be approved, said Kleeb, the director of Bold Nebraska. She said the pipeline endangers the Ogallala Aquifer and only encourages oil companies to spend additional money chasing harder-to-get deposits, such as shale formations in the northern United States and southern Canada. Those require rocks underground to be broken up under high pressure to release the petroleum.
Kleeb says she and her group are not against fossil fuels, acknowledging that it would be impractical to go 100 percent renewable immediately. She also said ceasing production from hard-to-get deposits in North Dakota’s Bakken region isn’t going to send the economy into a malaise. The Bakken produces about a million barrels a day out of the 19 million consumed each day in the country.
“What we need to do is slow down,” Kleeb said. “The oil isn’t going anywhere. You can make all the money you need to make.”
Mark Johnson, the Nebraska spokesman for TransCanada, said pipelines are the most efficient method of transporting oil between distant points, passing along the lowest costs to consumers.
“The bottom line is that the United States needs oil and it is going to get to market one way or another,” Johnson said.
The Keystone pipeline, now about four years old, runs from the southern Canadian province of Alberta and terminates in southern Nebraska at Steele City, the proposed endpoint for the Keystone XL.
Johnson said danger to the Ogallala is low, with nature having provided the aquifer with a deep and effective filtering system of sand and rock. Pipelines and oil wells already dot the Ogallala landscape, Johnson said, and the existing Keystone pipeline has operated without serious incident.
Like oil-train accidents, pipeline incidents tend to be attention-grabbing, such as the one in Kalamazoo, Michigan, in 2010, when an oil pipeline broke and spilled almost 1 million gallons. Cleanup costs have approached $1 billion.
From 1994 through 2013, there were 2,715 significant pipeline incidents, according to the federal Pipeline & Hazardous Materials Safety Administration. That is an average of 136 a year, defined as causing death or hospitalization, incurring costs of more than $50,000, or erupting in fire or explosion. The incidents have caused 40 deaths and 132 injuries.
Joseph Schwieterman, a professor at Chicago’s DePaul University specializing in transportation, said perfect safety in the U.S. economy’s supply chain — train or pipeline or any other mode — is an unreasonable expectation.
“The accidents that happen are headline makers, but the risks are manageable,” he said. “The hype is out of proportion.”
Schwieterman also said there is a generational component to opinions on oil production and the transportation of its products.
“Oil invokes a negative, visceral reaction among young people,” Schwieterman said, acknowledging that high-profile troubles such as the 2010 BP Gulf Coast oil rig blowout has had the same effect on some people as the Exxon Valdez tanker spill in 1989.
“People tend to forget about the value of energy independence,” he said, “and that such independence will come at a certain price.”
The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.
Valero’s Promise to Benicia: We’ll only have an environmental disaster once every 111 years.
Actually, that’s kind of worrisome, especially considering that if you don’t experience that disaster yourself, your kids probably will. This is one of the many absurd elements showing Valero’s cavalier attitude toward public safety in the draft Environmental Impact Report (EIR) for its proposed crude by rail project, for which public comments were due this week. The hazard analysis in this report is also a serious underestimate, according to the State among many others: The California Public Utilities Commission notes the serious failure of Valero to address the “potential for tragic consequences of crude oil tank car ruptures” from its proposed Crude by Rail Project.
Valero’s Promise to Benicia: We’ll only have an environmental disaster once every 111 years
This dangerous crude project is so riddled with problems that many communities up-rail are now voicing serious concern. The City of Sacramento highlights the high concentration of people around the rail freight lines (“more than 147,000 City residents live within ½ mile”) serving the “Valero Benicia refinery [which] is one of two California refineries that are in the process of securing permits to build rail terminals to import Canadian tar sands and Bakken crude oils.” (emphasis added) And the City of Davis suggests that the “highest levels of protection [be implemented] before disasters such as hazardous material releases and explosions occur [so that] we can avoid having such disasters in the first place.”
Benicians for a Safe and Healthy Community explain why the project is fatally flawed with 132 pages of concerns. Valero’s crude by rail proposal is like so many other projects popping up all over the nation in a mad rush to access cheaper, extreme and dangerous crude oils, with little regard for public health or safety. This project is a total disaster (based on NRDC, CBE and other comments) because it brings:
More Refinery Pollution: Bringing in extreme crudes like tar sands and fracked Bakken crude will only increase refinery pollution. Valero’s Benicia refinery already releases 70 percent more toxic chemicals than the average for California.
Toxic Plumes Along Rail Lines: This thing called “crude shrinkage” happens during transport, where entrained gases escape, leading to a 0.5 to 3 percent loss of crude oil. It’s a big problem for volatile crude oils like Bakken, and coupled with the high benzene levels found in some North American crudes (up to 7%), it creates a serious toxic plume around rail lines. For instance, we estimate over 100 pounds per day of excess benzene emissions from the Valero proposal in the Bay Area (or 1800 times more than the draft EIR reports).
Extreme Crudes are Dangerous: Valero and other oil companies pretend that they can mix extreme crudes like tar sands and fracked Bakken into the ideal “Alaskan North Slope look-alike” crude, which sounds great, except that it doesn’t work that way in reality. Both Bakken and tar sands carry their dangerous properties into any crude oil blend making it more volatile, toxic, and corrosive.
CBR Terminals at Refineries Amplify the Hazard: Valero proposes to site its crude by rail unloading facility within 150 feet of a number of very large refinery tanks that store highly flammable and potentially explosive material. If a derailment occurred at the terminal, it could set off a chain reaction of fire and explosions at the refinery. And there have been three derailments in Benicia outside the Valero refinery in the past year; luckily those trains were carrying petroleum coke, not crude oil.
Risk of Catastrophic Accidents All Along the Rail Route: Valero’s “Barkan report” that estimates a release only every 111 years from the proposed 100 daily tank cars carrying crude is absurd for many reasons. Most egregious is that it fails to consider recent data, like the six major crude oil train accidents over the past year that have resulted in massive fireballs and destruction, including 47 casualties in Lac Mégantic. The safety risks to tens of thousands of people living around these freight rail lines remains grave.
The oil industry has been promoting “look-alike” crudes that attempt to mimic conventional crude by blending extreme bottom of the barrel crudes. The mile-long trains laden with these extreme crudes are a Trojan horse that puts millions of Californians at risk and threatens to undo several decades of environmental progress. We need a moratorium on all new crude by rail projects, including Valero-Benicia, until the state can assess the cumulative impacts of these projects, make sure environmental impacts are fully mitigated and assure communities that they will be safe.
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