Tag Archives: DOT-111

Bakken Crude, Discounted oil, Keystone XL, Oil Industry, Oil prices, Public Safety, Rail accidents, Rail tanker cars, Rail vs. Pipeline

Five myths about crude oil by rail

Repost from TRAINS The Magazine of Railroading

A lot of what you’ve been hearing is not true. It’s time to set the record straight

COASTAL REFINERIES ARE FLOCKING TO OIL BY RAIL LIKE DROWNING MEN TO LIFE PRESERVERS.

Fred W. Frailey, Trains Magazine, Feb2014, Vol. 74 Issue 2, p17

Three years have passed since the village was rocked by the scandal, namely the remarriage, after half a century of divorce, of Mr. Big Rail and Ms. Crude Oil. People are still aghast. Who would have imagined these two would find each other attractive again? Yet a lot of loose tongues are still spreading gossip, and frankly, much of it is simply not true. To promote harmony in the village, your scribe this month wishes to set the record straight. Here are five commonly articulated myths that have no basis in fact.

1. It’s just a fling and won’t last. The way oil is priced worldwide virtually guarantees this marriage will endure. The world oil price (Brent) in recent years has usually been $10 to $25 a barrel higher than the West Texas Intermediate (WTI) price for oil from the U.S. interior, and oil from new discoveries in North Dakota and Canada is further discounted from the WTI price. Follow me so far? Refineries on the west and east coasts are not reached by pipelines from the country’s oil-producing midsection, and had to pay the Brent price (or something close to it) to buy oil from overseas or Alaska’s North Slope. It was difficult for these refiners to compete and stay in business.

Now these coastal refineries are flocking to oil by rail like drowning men to life preservers. If they can get oil $10 to $25 a barrel cheaper, they’re way ahead even after paying the railroads. Therefore, the east and west coasts, I maintain, will be the ultimate destination for much, if not most, of the oil coming from the Bakken shale formation in North Dakota and Saskatchewan. And the only way to get it there is by rail.

2. The Keystone XL pipeline will disrupt the marriage. Not at all. TransCanada’s XL, according to the environmental impact statement, is supposed to bring up to 730,000 barrels a day of stuff from Canada (more about “stuff” in a minute) to refineries on the U.S. Gulf Coast, and pick up another 100,000 barrels of North Dakota oil as it passes through that state. But there are problems with the XL. First, it may never be approved by the U.S. government. Second, Gulf Coast refineries are being flooded by light sweet crude oil of the sort North Dakota produces. I concede that pipelines can get North Dakota crude to the Gulf cheaper than railroads, but question whether there will be much appetite for it. Third, the “stuff” from Canada is not well-suited to pipelines.

3. Railroads cannot compete with pipelines head to head. In theory, that’s largely true. Between Point A and Point B, if there are no complicating hang-ups, pipe will underprice rail. Now, let’s talk about “stuff:’ The oil being extracted in northern Alberta, above Edmonton, is so heavy that you cannot do conventional drilling. Either you mine it and extract the oil from the sand, or you heat it underground and boil it out, so to speak. What you get is an oil called bitumen. Gulf Coast refiners are largely geared for this heavy oil – it’s a natural destination for this oil – but there’s a catch: Bitumen will not flow through a pipeline. Pipelines shippers have to buy condensate. transport it to northern Alberta, and then dilute the bitumen with it so that they end up pumping 72 percent bitumen and 28 percent condensate, or “stuff:’ So what goes through the pipe is 28 percent waste. At the other end, refiners have to remove the diluent. It’s a costly process. At least a couple of oil industry experts who have studied the economics of all this say bitumen can be shipped a lot cheaper by unit train, particularly if you use insulated tank cars with coils for steam injection to permit raw bitumen to be loaded and unloaded. Facilities that will do just that are being built or planned at both ends. The same experts say that even if you dilute the bitumen with 18 percent condensate to make it flow in and out of ordinary tank cars, unit trains are still the low-cost winner, although not by much.

4. Crude oil doesn’t explode. That was the prevailing wisdom before a runaway, unmanned crude oil train piled up in Lac-Megantic, Quebec, in July, killing dozens. And in November an Alabama & Gulf Coast crude oil train derailed over a wooden trestle near Aliceville, Ala., and press reports state that three cars of crude exploded (while other derailed cars did not). Today, I suppose the popular belief is that crude oil is explosive. The truth is that both myths are untrue (or true, take your pick). The lighter the crude oil, the more likely it will be to contain explosive elements such as butane and benzene that may separate from the heavy components during transport. If released and ignited, an explosion may result, according to published safety data sheets. Both the Lac-Megantic and Aliceville accidents involved light sweet crude that originated in North Dakota. As for tar-like bitumen, you could probably hit it with a flamethrower with no explosive effects.

5. The backlog of tank car orders is creating a bubble that will burst. That bit of village gossip had validity because after all, booms are followed by busts, and freight car manufacturers aren’t exempt. But after the Association of American Railroads in November got behind the idea of retrofitting (or reassigning or scrapping) 78,000 of the 92,001]. cars hauling flammable liquids such as ethanol and crude oil, it pretty much insured that the car builders will be turning out tank cars at their peak 24,000-a4 year rate for some time to come. That bust appears to be a long way off. ~

Fred W. Frailey is a TRAINS special correspondent and blogs on www.TrainsMag.com.

Benicians for a Safe and Healthy Community, Environmental Impacts, Offloading procedures, Public Health, Public Safety, Valero Crude By Rail

Benician Roger Straw: Growing opposition to Valero Crude by Rail

Repost from The Benicia Herald

For Benicia’s sake, stop Crude by Rail

March 27, 2014 – by Roger Straw

MANY THANKS TO THE BENICIA HERALD for its detailed coverage of Valero’s presentation earlier this week on its Crude-by-Rail Project. Donna Beth Weilenman’s lengthy report presented the very best in understanding Valero’s message.

I was somewhat disappointed, however. A small but growing segment of Benicia residents and business owners attended Valero’s meeting, offering a peaceful presence and an alternative view on crude by rail. Other news sources, including a nearby newspaper, two TV stations, two radio stations and a couple of blogs included references to the strong public opposition to Valero’s proposal at that meeting. Ms. Weilenman’s report virtually ignored the public’s input on that night.

Benicians need to hear Valero’s point of view, but a variety of voices made “news” at the actual event, and folks need to know about that as well.

The residents and businesses of Benicia have been waiting since last July for Valero to present its facts and to sell its proposal to bring North American crude oil by railroad tank car into our community. We can expect highly financed and professional messaging to promote their plan. Thanks to a recent paid ad in a local magazine and this week’s community meeting, we now know how Valero will focus our attention — and in some cases, misdirect our legitimate concerns.

We learned at this meeting, finally, that Valero clearly does not rule out importing train cars full of highly volatile Bakken crude oil and the world’s dirtiest crude from the tar sands of Canada.

After its presentation, when Valero opened the meeting for questions and answers, I must admit that I was surprised by the preponderance of questions expressing deep concern for the health and safety of Benicia. Well over 80 percent of the questions asked were cautiously skeptical and highly concerned about safety and the environment. I took notes on each of the approximately 24 questions asked, with the following results: Nine were about emergency spills and explosions, four were about the source and crude oil content of Valero’s rail shipments, two were about failure-prone DOT-111 tank cars, and one each concerned train routing, traffic in the Industrial Park and permitting of the proposed project.

Following each question, a panel member or representative of Valero or Union Pacific gave a brief answer. Many in attendance, including myself, felt that some of the answers were almost glib, and all were calculated to smooth over every public concern.

We were assured over and over again that Valero’s excellent safety record, thorough planning, and yet-to-be passed new federal and state regulations would protect us from a catastrophic spill or explosion. This in the face of recent news reports on the massive increase in crude-by-rail shipments and the inevitable skyrocketing numbers of horrific explosions and spills over the last year.

We were assured over and over again that no additional or adverse pollution would result, supposedly because trains give off fewer emissions than ships. This totally ignores easily available background on the environmentally destructive methods of crude oil extraction in the Bakken region of North Dakota and tar sands mining in Canada, and the excessive corrosive effects and additional toxic emissions when refining extreme crudes. No one asked Valero at this meeting to address the 100 connect-disconnect operations every day on tank cars as opposed to a single connect-disconnect of a docked ship once a week. How will these repetitive operations add to what are known as “fugitive emissions,” not to mention a massive increase in risk for spills and accidents?

I usually call myself a liberal. In this instance, I am a deeply conserving skeptic. Please, Valero — I know that you work for Texas executives who guide your actions here, but as you mentioned at your meeting this week, 50 percent of your management and more than 100 Valero employees live here in Benicia. You are our neighbors. Please help us protect our lives and our city, and stand with us on behalf of communities uprail and downwind of Benicia. Ask Valero’s Texas executives to rethink their strategies for the future of energy production. Valero could lead the way in the oil industry. Everyone knows that refining of crude oil is a dying enterprise. In the next 50 years Valero will need to retool to produce energy in cleaner and safer ways. There is no need to grasp at the last, most dirty and dangerous barrels of crude to make a quick buck.

Listen to concerned Benicians and folks from communities uprail and downwind of here — stop the Crude-by-Rail Project.

More information is available at SafeBenicia.org and BeniciaIndependent.com.

Roger Straw is a Benicia resident [and editor of The Benicia Independent].

Benicia Herald, DOT-111, Rail Safety, Valero Crude By Rail

Benicia’s Stan Houston: a host of safety concerns – preserving Valero’s future and Benicia’s

Repost from The Benicia Herald

Crude by rail: An opportunity to lead

March 26, 2014 by Stan Houston

THE VALERO REFINERY WANTS TO BRING IN A NEW FORM OF CRUDE OIL to process in their refinery here in Benicia. Union Pacific Railroad will be the transporter. There is a host of safety concerns, not the least of which is the volatility of this newer crude. Should a mishap in transportation cause any one of the tank cars to rupture, the resulting explosion and fire could destroy Benicia. The gravity of this situation and my personal experiences in the railroad industry demand I convey my assessment and participate in a conversation that may lead to a solution that works for everyone.

I was only 3 1/2 years old but can still remember my first steam-locomotive trip. My parents and I stood patiently at Southern Pacific’s Oakland terminal and watched the oil-fired locomotive billow out steam while the engineer reset the brakes and moved the engine forward a bit. It seemed an eternity before the conductor waved to my parents and we were allowed to board my grandfather’s private car on Southern Pacific’s Daylight train to Portland, Ore.

Ten years later I would find myself packaging freight car lubricant after school for one of my dad’s railroad customers. In another 20 years, I celebrated having worked at every roundhouse and rail yard in the United States, Canada and Australia. By the age of 37, I was a highly regarded plastics engineer whose father’s company was leading the railroad industry in replacing metal bearings and components with high-tech plastic materials. In the 40-plus years I spent “working on the railroad,” I was an invited guest speaker to the Association of American Railroads, a frequent presenter at the Facility for Accelerated Service Testing in Pueblo, Colo., a board member and keynote speaker of the Locomotive Maintenance Officers Association, and a recipient of the first Quality Assurance Award from General Electric under then-CEO Jack Welch.

I cut my teeth in the industry at the Southern Pacific and Western Pacific railroads. I spent most of my early years visiting SP’s Sacramento Locomotive Works, where I’d oversee the testing and installation of our new products. The shops had been home to my grandfather when he was master mechanic there in the 1940s and ’50s. And, it didn’t hurt that Southern Pacific’s vice president of research and development was my godfather; I was given a lot of access to the railroad many others only dreamed of. As I grew into my late 20s, I’d venture to the Midwest to visit the Union Pacific or Burlington Northern railroads, or I’d go back east and call on the C&O and B&O (CSX), or the Southern Railway System. I travelled almost every other week for the next 20 years, helping redesign parts on freight cars and locomotives. It was a busy time in my life and very rewarding. I learned how the locomotives and the freight cars and rails work together. And, suffice it to say, I know the people who make those freight cars, and build those locomotives, and lay those rails.

During the last half of the 20th century, railroads shifted from carrying almost everything we consumers bought to what is today a streamlined mix of industrial and consumer goods. The railroads are extremely agile in producing freight cars that look like they are designed to handle very specific products when, in fact, their agility and mechanical engineering prowess — along with the help of their supply industry — can quickly adapt a standard freight car into a specific commodity freight car with little alteration to its structural integrity. It wasn’t long ago that, as seasonal demand of grain cars oscillated wildly during harvest in the Midwest, standard box cars (the kind you see the homeless pictured riding in) were overnight turned into grain cars by inserting a cardboard barricade in the door openings and cutting a grain chute hole in the top. Not very space-age technology, but it worked extremely well.

Today the railroads are being tasked with carrying increasing amounts of oil in tank cars. In their heightened and predictable response to demand, they have rebuilt and built new tank cars at an unprecedented rate, yet still they have fallen short of what the growing demand requires. Because there are no government regulations requiring a specific type of tank car modification or a specifically designed car to address the newer types of crude now being carried, the railroads are carrying the newer materials in standard tank cars, some of them well over 50 years old. These cars are what the industry refers to as the DOT-111 class cars. Even the very newest modification to the DOT-111 class, made in 2011, does not adequately address the volatile nature of some of the newer crudes when under impact through derailment or collision. In addition, there has been no investigation into developing a far safer delivery system that employs tank car transport. It has been well documented that as a result of a derailment and collision, the subsequent breach of a tank car would cause an explosion of the newer crudes and destroy Benicia as we know it.

The Valero refinery has asked Benicians for their support to be able to bring these newer crudes to their Benicia refinery. It is irresponsible to close our eyes and NIMBY our way out of this predicament. It is in our best interest to do everything we can to insure the profitability and volume of output from Valero, as they provide a significant amount of money to our General Fund and donate hundreds of thousands of dollars each year to needy Solano County enterprises. In fact, we should be encouraging Valero to make as much product as they can and working with them to facilitate an increase in their margins so that we reap sustainable benefits, too. Isn’t that what we already do for our other businesses? Isn’t that what tourism does for the First Street businesses and the Economic Development Board does for our other businesses? Shouldn’t we treat Valero the same as any other contributor to our welfare? Shouldn’t we insist that any threat to Valero’s ability to operate is hereby not acceptable?

In the absence of government mandates that would require a safer tank car or a safer delivery system for newer crude, it is up to Benicia to safeguard Valero’s cash flow to us so that our livelihoods continue. In our conversation with our benefactor, Valero, we must insist they deliver this message to the railroad industry: “This is not the time to fabricate a piece of cardboard and retrofit a boxcar. Rather, this is a time of great opportunity that will require the cooperation of the stakeholders of the Union Pacific Railroad and the tank car companies to look into the future and develop a brand new product and delivery system. Round up your best ME’s (mechanical engineers) and maintenance-of-way gurus and put together a delivery system that includes a modern, high-tech tank car with a robust safety factor and a delivery system that insures the continued operation of the Valero Refinery and the health and welfare of every township your system touches.

“And, until you can provide us with testing data that shows the newer car and newer delivery system is adequate, you can’t ship into Benicia anything that threatens the current cash flow of Valero funds to our stakeholders and the city of Benicia.”

Stan Houston lives and works in Benicia.

Bakken Shale, DOT-111, Tar sands crude, Valero

KPIX reports: Valero admits Tar Sands Crude, Fracked Oil could come through Benicia

Repost from KPIX5 CBS San Francisco

Valero Admits Tar Sands Crude, Fracked Oil Could Come Through Benicia

Representatives from Valero admitted dirty crude oil from the Canadian tar sands or volatile fracked oil could be shipped by rail through Benicia on its way to the oil company’s refinery. Christin Ayers reports