Tag Archives: Emergency Readiness & Response

Crude By Rail, Rail industry subsidies, Rail Safety

Reuters: U.S. taxpayers help fund oil-train boom amid safety concerns

Repost from Reuters
[Editor: Significant quote: “‘Look at the towns. All they’re getting are more trains in their backyard and all the risk with no financial benefits,’ said Dan McCoy, the County Executive in Albany, New York, where taxpayer funds have contributed to growing oil-train shipments.”  – RS]

U.S. taxpayers help fund oil-train boom amid safety concerns

By Jarrett Renshaw, Dec 14, 2014
A crude oil train moves past the loading rack at the Eighty-Eight Oil LLC's transloading facility in Ft. Laramie, Wyoming July 15, 2014. REUTERS/Rick Wilking
A crude oil train moves past the loading rack at the Eighty-Eight Oil LLC’s transloading facility in Ft. Laramie, Wyoming July 15, 2014. REUTERS/Rick Wilking

(Reuters) – For the past 18 months, Americans from Albany to Oregon have voiced growing alarm over the rising number of oil-laden freight trains coursing through their cities, a trend they fear is endangering public safety.

In at least a handful of places, the public is also helping fund it.

States and the federal government have handed out tens of millions in public dollars to rail companies and government agencies to expand crude oil rail transportation across the country, a Reuters analysis has found.

The public assistance in states like New York, Pennsylvania, Ohio, Oklahoma and Oregon comes as railroads are posting record profits, and as state and federal authorities press for safety overhauls that the oil and rail industries have opposed, following several explosive derailments.

The Reuters analysis identified 10 federal and state grants either approved or pending approval, totaling $84.2 million, that helped boost the number of rail cars carrying crude oil across the nation.

The funds are a fraction of total public funding for railroads each year, and look small compared to the $24 billion railroads themselves are spending annually on infrastructure.

But with oil-train safety under heavy scrutiny, the public grants could be controversial and add to growing strains between the industry and some local communities who say they are ill-prepared to deal with oil spills or derailments.

“Look at the towns. All they’re getting are more trains in their backyard and all the risk with no financial benefits,” said Dan McCoy, the County Executive in Albany, New York, where taxpayer funds have contributed to growing oil-train shipments.

In May, Albany’s sheriff, Craig Apple, warned that regional emergency crews weren’t equipped to respond to any major derailment.

“I am not seeing any increases in tax revenue, but I am seeing an increase in the cost of emergency services,” McCoy said.

Since 2008, there have been at least 10 major oil-train derailments across the U.S. and Canada, including a disaster that killed 47 in a Quebec town last July.

Officials and rail executives offer a counter-argument: the funds help improve safety for an industry that is helping revive the economy in some places.

Last year, New York Governor Andrew Cuomo awarded CSX Railroad a $2 million grant to add a second 3.6-mile rail line just south of the state capital in a county that now handles about a fourth of the Bakken’s oil, a light, volatile crude whose vapors have exploded in several past derailments.

CSX spokesman Rob Doolitle said the new line allows the railroad to idle fewer trains in the region, block fewer crossings, and serve at least 200 different businesses more efficiently.

“Local communities benefit from increased capacity,” Doolittle said. CSX posted record revenues of $3.2 billion in the third quarter.

AN INDUSTRY TRANSFORMED

The taxpayer dollars are going to a rail industry that has transformed the U.S. energy market: Amid a shale-drilling boom that has overwhelmed the nation’s pipeline network, oil-train traffic has surged at least 42-fold since 2009, and 415,000 railcar loads of oil plied the nation’s tracks last year.

As oil-trains increasingly make up for a lack of pipelines, they share the tracks with passenger and other freight trains on some of the busiest U.S. rail corridors. Emergency responders in several regions have complained that they lack information to track them and quickly respond to accidents.

While federal law now requires rail operators carrying Bakken crude to report routes and the number of trains that transit through each state, railroads have been reluctant to share specifics publicly, citing security risks.

Philadelphia is one of the unlikely locales that has been both alarmed and enriched by the oil-by-rail industry.

In 2012, The Carlyle Group led a rescue of the East Coast’s biggest refinery, which had been slated for closure, aided in part by a state-backed aid package that included $10 million to build a new rail terminal.

The 335,000-barrel-a-day plant is making money once again thanks in large part to the rail terminal, which receives six miles of oil-laden railcars daily from North Dakota’s Bakken.

In September, Philadelphia Energy Solutions (PES), an oil refining complex controlled by hedge fund Carlyle Group, announced plans to sell shares in its crude-by-rail terminal, a move that may fetch hundreds of millions of dollars and reduce its corporate tax burden.

Carlyle declined comment, but the company has previously said that government assistance helped to save at least 850 jobs at PES and boost Pennsylvania’s economy.

Earlier this year, six railcars transporting Bakken oil to the PES rail terminal derailed on a bridge over the Schuylkill River in Philadelphia’s Center City. No oil spilled from the CSX-operated train, but images of railcars teetering above the city’s vital waterway shocked locals and prompted protests.

“It spooked a lot of people in Philadelphia, and really raised the profile of the issue of crude by rail, an issue most people don’t think about,” said Matt Walker, a director with the local Clean Air Council.

CONGESTION RELIEF

Citing high costs, oil and rail industry groups have resisted some of the U.S. Department of Transportation’s recent proposals to enhance crude-by-rail safety, which include quick retirement or retrofitting of older, accident-prone railcars, lower speed limits, and mandatory electronic railcar braking systems.

Railroads and local transport authorities say public grants are a public good.

Since 2011, Oklahoma has received two federal grants worth $8.6 million that were used to fund privately-held FarmRail System, a regional rail operator, to move more crude by rail out of the state’s Anadarko Basin.

“We see these grants as improving public safety, much like you spend money on improving a highway,” said Gary Ridley, the head of the Oklahoma’s transportation agency. Trains are better than oil trucks, which clog up roads, he said. Oklahoma Governor Mary Fallin recently announced a $100 million spending package to upgrade rail crossings in the state.

In Oregon, oil terminal giant Global Partners successfully lobbied state and county officials to fund $8.9 million in upgrades to the Portland and Western Railroad, which runs next to the Columbia River. As a result, Global was able to increase the number of oil-trains to its private rail hub in the state by more than a third, to 38 per month. Global declined comment.

“It really doesn’t matter whether the train is carrying crude oil or cotton puffs, they have the right to pass through,” Jerry Cole, the mayor of Rainier, Oregon, where oil-trains pass through daily. “All I can do is to make it as safe as possible.”

(Reporting by Jarrett Renshaw, editing by Jonathan Leff and John Pickering)
Crude By Rail, Emergency Readiness & Response, Funding for emergency response, State regulation

Washington Gov. Inslee eyeing a tax on oil shipments arriving by rail

Repost from Crosscut.com, Seattle, WA

Inslee is eyeing a tax on oil shipments arriving by rail

His measure could also target pipeline shipments.
By John Stang, December 6, 2014
Tanker cars can carry oil or LPG.
Tanker cars can carry oil or LPG. Paul K. Anderson, Chuckanut Conservancy

The Inslee administration’s leaders expect to introduce a bill to extend Washington’s 5-cents-a-barrel oil tax to pipelines and railroad oil cars.

Currently, the tax on the 42-gallon barrels applies only to oil arriving in Washington by ship. Dale Jensen, director of the Washington Department of Ecology’s oil spill program, briefed the House Environment Committee on the matter Friday.

Officials are also considering the possibility of increasing the current 5-cents-a-barrel tax on oil arriving in the state. Part of the money goes to oil spill prevention and response programs across the state. The administration has not yet calculated how much money will be needed in upcoming years, meaning it has also not decided yet whether to increase the five-cents tax or keep it intact, Jensen said.

Extending the tax to oil railcars and pipelines reflects the shrinking of the amount of oil arriving in Washington by ship, while pipeline traffic and rail oil traffic are increasing, Jensen said.

In 2003, 91 percent of the oil going to Washington’s refineries came by ship, with 9 percent arriving by pipeline, and none arriving by rail. In 2013, 67.4 percent arrived in Washington by ship, 24.2 percent by pipeline and 8.4 percent by railroad.

A typical tanker railcar holds 29,200 gallons. Washington’s five refineries process roughly 24.3 million gallons of crude oil a day, and have the capacity of processing 26.5 million gallons daily. At 42 gallons per barrel, that translates to approximately $34.75 in tax per tanker car or roughly $28,900 per day for the amount of imported oil to be refined in Washington.

In the 2014 legislative sessions, Sen. Rodney Tom of Medina — who retired this year and was the leader of the Senate’s Majority Coalition Caucus at that time — introduced a bipartisan bill to extend the oil tax to railroad oil cars, but not pipelines. With support from both parties, the Senate Ways & Means Committee recommended passage on March 10. But that bill did not make it to a full floor vote by the time the 2014 session ended on March 13.

Frank Holmes, representing the Western States Petroleum Association, said the organization supported Tom’s 2014 bill, which the association membership believed accurately reflected Washington’s oil traffic shifting from ship to rail. However, the association opposes installing the tax on pipeline oil. Holmes said Washington’s pipelines have had an excellent safety record during the past 50 years.

All this unfolds as Gov. Jay Inslee is digesting a draft state report on factors to consider on designing legislation to improve oil train safety in Washington. In the Legislature’s 2014 session, Democrats and Republicans introduced somewhat similar oil train emergency prevention and response bills, including requirements that oil companies and railroads provide advance information on each oil train to emergency agencies. But the two sides could not get past one major point. The Democrats wanted to make the volumes and chemical compositions of the oil in each upcoming train available to the public. The Republicans were against that provision, arguing it would expose proprietary corporate secrets.

Jensen speculated that Inslee may push for full public disclosure of the oil train information.

 

Crude By Rail, Derailment, DOT-111, Emergency Readiness & Response, Evacuation, Federal Regulation (U.S.), Fire, Marine transport, Oil stabilization, State regulation, Tank car retirement, Tank car retrofit, Volatile gases

Albany NY Area officials say crude-oil transport is getting safer

Repost from The Press Republican, Plattsburgh, NY
[Editor: the safety improvements showcased here are far from adequate, nevertheless, it’s a good update on conditions in New York.  Sen. Schumer is absolutely right – the DOT-111 tank cars should be taken out of service immediately… and not just in New York.  And Bakken crude should be stabilized before it is transported (not just conditioned) … just as it is in Texas.  – RS]

Area officials say crude-oil transport is getting safer

Lohr McKinstry, December 6, 2014
A DOT-111 oil tank car sits on a siding in the Midwest. New York state is adopting tougher rules on use of the tank cars, which pass through Essex and Clinton counties enroute to Albany,

LEWIS — New state regulations on crude-oil trains should help make them safer, Emergency Services officials from Essex and Clinton counties said recently.

State agencies have implemented 66 actions designed to strengthen standards, regulations and procedures to make the transport of crude oil by rail and water in New York safer and to improve spill preparedness and response.

Gov. Andrew Cuomo received a status report outlining the progress made by multiple state agencies after they were directed to evaluate the state’s capacity to prevent and address crude-oil accidents.

Local leaders have been concerned about the 100-car-plus oil trains moving through Clinton and Essex counties as the crude oil extracted in North Dakota arrives via Canadian Pacific Railway trains.

The oil is on its way to the Port of Albany, where it is stored for transport to various refineries.

IMPROVEMENTS

Essex County Emergency Services Director Donald Jaquish said he sees the new procedures as a safety benefit to the North Country.

“It’s a step in the right direction,” he told the Press-Republican. “We’re in a better position than we were a year ago.”

There’s been concern the trains could derail, and the oil burn or explode, as it has in other regions, and Jaquish praised Canadian Pacific for trying to make the tracks and tank cars safer.

“Upgrading the DOT-111 tank cars, rail replacement and maintenance, and specialized training are all beneficial to safety.

“Canadian Pacific has been helping us with training, hands-on-experience, that first responders need for these situations.”

EVACUATION PRACTICE

The tank cars are not owned by Canadian Pacific but by oil companies and vendors, and as a federal common carrier, the railroad is required to transport them.

Both the railroad and federal regulators have pushed for upgrades to the DOT-111 single-shell cars or a switch to the stronger DOT-109 or 112 cars.

“In almost any situation we get, we will be doing evacuations,” Jaquish said. “We’ve been working with Clinton County on planning and implementation.”

Clinton County Emergency Services Director Eric Day said any improvements to the transport of oil cars are welcome.

“At the end of the day, what they’ve done is good, no question,” Day told the Press-Republican. “Any regulatory move to make the DOT-111 cars safer is a plus. It’s a long time coming.”

One problem is that there are thousands of DOT-111 tank cars still in service, he said.

“There are so many of them (DOT-111 cars) out there on the tracks. They’re not going to stop moving the oil before they fix the cars. The oil is not going to stop coming any time soon.”

STATE GUIDANCE

Day said enhanced state regulations on oil shipments will be helpful.

“If there are changes that are pushed upon them (shippers), it can only make it safer. We’ve seen some of the benefits of the state’s work with regard to planning,” he said.

“We have guidance now on firefighting potential on dealing with these things. There are so many variables. Multiple cars of this crude oil on fire are a different animal.”

He said that, thanks to a donation, they now have the foam needed for such fires. The expensive product costs $30,000 for 1,000 gallons of foam but puts out crude-oil-based fires.

VOLATILE GAS

The North Dakota Industrial Commission has proposed draft regulations to remove the volatile gases from the oil before it is shipped, and Day said that provision is a good one.

“One of the things that makes the Bakken crude so volatile are the gases in the oil. The gas works its way out and is stuck in the head space of the car. If they breech, there’s flammable gas; cars that aren’t breeched and heat up, the gas could expand and be a problem.

“Removing that gas is a possibility before they put in the cars and ship it. If they could do that, it’s a big win.”

FEDERAL ROLE

Cuomo called for the federal government to mandate tank-car upgrades or replacement.

“The federal government plays a vital role in regulating this industry, and Washington must step up in order to expedite the implementation of safer policies and rules for crude-oil transport,” he said in the release.

The governor said the oil-production industry has resisted stronger tank-car standards and regulations requiring companies to reduce the volatility of crude before shipment.

A new report from the Brattle Group for the Railroad Supply Institute, a trade group, showed that a proposed federal rule to upgrade rail-tank cars could cost $60 billion.

According to the report, the high price tag is largely due to the costs associated with potential modifications to tank cars, early retirement of existing tank cars, temporarily using trucks instead of rails for transport and lost service time for tank cars under modification or awaiting modification.

‘TIME BOMBS’

U.S. Sen. Charles E. Schumer (D-NY) has also come out against use of DOT-111 cars.

“These outmoded DOT-111 tank cars … are ticking time bombs that need to be upgraded ASAP,” the senator said in a news release.

“That is why for two years, since the tragedy at Lac-Megantic, I have pushed federal regulators to phase out and retrofit these cars.

“As a result of our efforts, the federal Department of Transportation has put a proposal on the table that could start taking these cars off the tracks within two years, as well as restrict the speeds at which these trains operate.”

On July 6, 2013, a 74-tank-car train carrying Bakken light crude derailed in Lac-Megantic, Quebec, and the tank cars exploded, killing 47 people, destroying 30 buildings and spilling 1.5 million gallons of heavy crude oil.

That disaster was followed by oil-train-explosion derailments in Alabama, North Dakota, Illinois and New Brunswick, Canada.

Crude By Rail, Decommissioning, DOT-111, Emergency Readiness & Response, Tank car retirement, Tank car retrofit, Train speed

Canada Bans Thousands of Old Crude Rail Tank Cars

Repost from Natural Gas Intel’s Shale Daily

Canada Bans Thousands of Old Crude Rail Tank Cars

Richard Nemec, December 5, 2014

While it has a phase-out process running into 2017 for old (DOT-111) rail tank cars that carry crude oil, Canada’s Transport Department (CTD) has accelerated the process by banning nearly 3,000 of the older model cars from carrying “dangerous goods” throughout the nation.

The transportation agency, the equivalent to the U.S. Department of Transportation (DOT), has ruled that 2,879 of the tank cars are not safe enough to continue carrying shipments of oil, chemicals or other explosive materials.

CTD issued a 30-day deadline to rail operators last April to stop using certain types of DOT-111 tank cars that were deemed to be least resistant to crashes, saying the cars needed to be refitted with thicker steel and stronger reinforcement over the next three years or face being decommissioned for crude shipments.

DOT-111 railcars were carrying crude in July 2013 when a train derailed causing an explosion that killed 47 people in the small Quebec town of Lac-Megantic (see Shale Daily, July 9, 2013). It was subsequently determined that more than 5,000 of the rail tank cars without reinforced bottoms were still operating in North America, nearly 3,000 of them in Canada.

Since then, CTD has taken further measures, including

  • Removing the least crash-resistant DOT-111 tank cars from dangerous goods service;
  • Introducing new safety standards for DOT-111 tank cars, and requiring those that do not meet the new standards to be phased out by May 1, 2017;
  • Requiring railway companies to slow trains transporting dangerous goods and introduce other key operating procedures;
  • Requiring emergency response plans for even a single tank car carrying crude oil, gasoline, diesel, aviation fuel, and ethanol; and
  • Creating a task force that brings municipalities, first responders, railways, and shippers together to strengthen emergency response capacity across the country.

“The department has moved to enhance inspections, documentation, and follow-up for rail safety and transport of dangerous goods,” the agency said on its website. “This includes more frequent inspections at sites where petroleum products are transferred from one mode of transport to another, for example from truck to rail.”

Early this year, the U.S. National Transportation Safety Board (NTSB) issued a series of recommendations calling for tougher standards for rail shipments of crude oil on both sides of the U.S.-Canada border (see Shale Daily, Jan. 23). NTSB and the Transportation Safety Board of Canada issued the recommendations jointly in recognition that the same companies operate crude rail trains in both nations, frequently crossing the U.S.-Canada border.

NTSB called the joint move unprecedented and said it came in response to growing concerns about “major loss of life, property damage and environmental consequences” from the increasingly large volumes of crude oil being carried by railroads in North America.

DOT’s Pipeline Hazardous Materials and Safety Administration earlier this year issued new rules dealing with the design of new rail tank cars, maintenance of the rail infrastructure, content of the crude supplies being shipped and notification and training of local emergency response organizations (see Shale Daily, July 24).