Tag Archives: Federal Railroad Administration

Bakken Shale, Oil Industry, Rail industry, Rail Safety, Rail tanker cars

Albany NY – crude by rail CROSSROADS

Repost from the New York Times

Bakken Crude, Rolling Through Albany

By JAD MOUAWAD

Rail tanker cars roll through Albany on their way to the port.
Credit: Stewart Cairns for The New York Times

ALBANY — On a clear December morning two years ago, a 600-foot oceangoing oil tanker called the Stena Primorsk left the Port of Albany on its maiden voyage down the Hudson River laden with 279,000 barrels of crude oil. It quickly ran aground on a sandbar.

The incident attracted little attention at the time. The ship’s outer hull was breached, but a second hull prevented a spill. Still, the interrupted voyage just 12 miles south of the port signaled a remarkable turnaround for the state’s capital.

With little fanfare, this sleepy port has been quietly transformed into a major hub for oil shipments by trains from North Dakota and a key supplier to refiners on the East Coast.

Hidden in plain sight, Albany’s oil boom has taken local officials and residents by surprise. Many became aware of the dangers of oil trains after a recent series of derailments and explosions, including one that killed 47 people in Quebec last July, which have generated concerns about growing rail traffic into the city. Trains rumble through the heart of Albany every day and often idle along the busy Interstate 787 highway while waiting to get into the port’s rail yards.

“This has caught everyone off guard,” said Roger Downs, a conservation director at the Sierra Club in Albany.

About 75 percent of Bakken oil production travels by rail and as much as 400,000 barrels a day heads to the East Coast, said Trisha Curtis, an analyst at the Energy Policy Research Foundation. Albany gets 20 to 25 percent of the Bakken’s rail exports, according to various analyst estimates.

“Albany has become a big hub,” Ms. Curtis said.

But opposition is starting to form over new plans by one energy company to expand operations here and, possibly, ship crude extracted from the oil sands of Canada into Albany. The company, Global Partners, which pioneered the use of Albany as a crude-oil hub, is also looking at shipping oil from a terminal in New Windsor, just north of West Point.

The rapid growth in the oil-by-rail business is raising alarms. Railroads carried more than 400,000 carloads of crude oil last year, up from 9,500 in 2008, according to the Association of American Railroads. Federal regulators have been under pressure to address the industry’s safety and recently outlined a series of voluntary steps, including slowing oil trains in some major urban areas.

Oil_flows_east_NYT

These steps are not enough to protect many communities along the rail lines, Senator Charles E. Schumer, Democrat of New York, said this week. This includes many places in upstate New York, like Buffalo, Rochester, Utica, Syracuse and Albany, that have seen higher rail traffic. He compared the industry’s use of outdated tank cars to “a ticking time bomb” and urged federal regulators to quickly retire these older cars, known as DOT-111s, in favor of models built after 2011 that have better protections.

“The safety regime has to catch up with the reality that there are now hundreds of cars everyone admits could be dangerous if there is a derailment that are hurtling through heavily populated areas of New York State,” he said in a telephone interview Thursday.

Albany’s newfound role did not happen by chance. It has long served as a regional distribution center for heating oil and gasoline to Vermont. It is linked to the Midwest by rail and is close to many of the East Coast’s major refineries. This coincidence of geography and logistics has made it an ideal trans-shipping point for oil produced in the Bakken region, now about 950,000 barrels a day.

“Early on we saw an opportunity to supply East Coast refiners with cost-effective North American crude oil,” said Eric Slifka, the chief executive of Global Partners, which first brought oil by rail to Albany around the end of 2011. The company doubled its oil-handling capacity to 1.8 billion gallons a year, the equivalent of 118,000 barrels a day, in 2012.

Another energy company, Houston-based Buckeye Partners, made a similar calculation and also expanded its capacity for crude oil in Albany in 2012 to one billion gallons a year, up from 400 million gallons. At the time, state regulators at the Department of Environmental Conservation received no public comment.

“The D.E.C. has done all its studies and analyses, but my guess is just that the community doesn’t like the answer,” Mr. Slifka said in an interview. “I think it’s hard to turn back the clock. At the end of the day, the D.E.C. and government agencies have gone into this with their eyes wide open.”

Trains now come into Albany on average twice a day after completing a four-day journey from North Dakota, either through the Canadian Pacific network, via Montreal, or on the CSX rail lines that pass through Buffalo and Syracuse. These mile-long trains, each up to 120 tank cars long, can carry roughly 85,000 barrels of oil.

Once in Albany, the oil goes into giant storage tanks before being loaded onto barges that make daily trips to refineries down the Hudson. Some trains go to Pennsylvania. Every eight days, a bigger tanker, a Bahamas-flagged ship called the Afrodite, which replaced the Stena Primorsk after its accident, picks up oil destined for Irving Oil’s refinery in Saint John, New Brunswick, which produces gasoline for the American market.

“Bakken crude has been a lifeline for the East Coast refineries,” said Lawrence Goldstein, an energy economist.

Richard J. Hendrick, the Port of Albany’s general manager, said the new traffic had been a boon for the port and the longshoremen who work there. Ships still haul scrap metal to Turkey or large electrical components destined for a power plant in Algeria. But the port’s business has been increased by the oil traffic.

“We can do things faster and more safely here,” Mr. Hendrick said.

But hauling oil on rails comes with unanticipated dangers. After an oil train derailed and exploded near Casselton, N.D., late last year, federal regulators warned that Bakken crude oil was extremely volatile. On Tuesday, they ordered shippers to properly test and classify Bakken crude before loading it onto freight trains.

Heading_to_Albany_NYT“Albany is getting a lot of the risk and almost no economic benefits or jobs from this,” said Susan Christopherson, a professor at Cornell University’s Department of City and Regional Planning.

There is not much New York’s officials can do to reduce the flow of oil trains, despite the state’s commitment to low-emission fuels and its opposition to natural gas drilling and hydraulic fracturing. Officials acknowledge that they are powerless since railroad commerce is regulated by the federal government.

Gov. Andrew M. Cuomo nevertheless directed state agencies in late January to review their emergency and spill response plans and report back to him by the end of April. The state’s top environmental and transportation officials met with their federal counterparts last week to discuss the issue.

But there remains considerable uncertainty about how authorities would respond to an accident or a spill in the Hudson River. The Coast Guard conducted a drill in New Windsor last November. The mock event involved the derailment of four train cars and a 50,000-gallon spill in the Hudson from a storage tank.

“We continue to look for ways to improve coordination and response with our federal and local partners and, as directed by Governor Cuomo in his recent executive order, are evaluating the state’s spill prevention, response and inspection program for rail, ship and barge transportation of crude oil and other petroleum products,” said Emily DeSantis, the Department of Environmental Conservation’s spokeswoman.

That is little comfort for a broad coalition of environmental groups, elected city officials and residents, who said state regulators should have better anticipated these risks and are demanding a full review.

Chris Amato, who worked at the D.E.C. from 2007 to 2011 and is now a lawyer at the advocacy group Earthjustice, which is challenging the oil projects, said regulators should have performed a detailed environmental impact study two years ago. “A lot of people are upset that the D.E.C. is still dillydallying,” he said.

Vivian Kornegay, a City Council member, whose district is across from the rail yards and the port, said, “We want a do-over.”

Hundreds of residents attended a public meeting at an elementary school last month, and voiced their concerns over the expansion plans of Global Partners. The meeting focused on a recent application by the company that includes building seven heating units at its rail yard. Some say they believe the company intends to import heavier, dirtier crude from Canada’s oil sands in addition to Bakken crude.

Mr. Slifka, Global’s chief executive, said the heating units were needed to accommodate “any types of U.S. and Canadian crudes that would require heat to be put to them because of the viscosity.”

He added: “Where the crude comes from isn’t necessarily the focus. It’s making sure there is flexibility in the system to take various types of crude.”

Given the new opposition, state officials recently extended the public comment period on Global’s plans until April. They also said they would require the company to be more transparent about its plans, even if it has followed all regulations. The Department of Environmental Conservation is also conducting a review of “all matters pertaining to Global’s operations in New York State,” Ms. DeSantis, the agency’s spokeswoman, said.

“There’s been some clear indications that D.E.C. needs to be a better cop on the beat when it comes to this industry,” said Peter Iwanowicz, the executive director of Environmental Advocates of New York, and a former state official in charge of environmental issues. “But we can’t look back in the windshield. The reality is that Albany is now part of the oil patch.”

 A version of this article appears in print on February 28, 2014, on page B1 of the New York edition with the headline: Bakken Crude, Rolling Through Albany.
Federal Regulation (U.S.), Rail Safety, Spill prevention and response

Oil Companies Fined For Mislabeling Crude Shipments

Repost from Huffington Post / Reuters

U.S. Oil Companies Fined For Mislabeling Crude Shipments In First Move After Series Of Derailments

Reuters, 
Main Entry Image

In this Dec. 30, 2013 file photo, a fireball goes up at the site of an oil train derailment in Casselton, N.D. (AP Photo/Bruce Crummy, File) | ASSOCIATED PRESS

By Patrick Rucker
WASHINGTON, Feb 4 (Reuters) – Three oil companies operating  in North Dakota were fined $93,000 on Tuesday for wrongly  classifying fuel shipments in the first sanctions since a series  of fiery derailments put the energy industry under a spotlight.

The Department of Transportation said Hess Corp,  Marathon Oil Corp and Whiting Petroleum Corp   were cited for wrongly classifying cargo tanks that were hauling  crude oil from the field to a railhead.

Fuel shipments must be designated with a hazard class to  alert emergency responders in the event of an accident. Eleven  of eighteen samples of one survey were mislabeled, the DOT said  in a statement.

“The fines we are proposing today should send a message to  everyone involved in the shipment of crude oil: You must test  and classify this material properly,” said Transportation  Secretary Anthony Foxx.

A spate of explosive derailments, including one in Quebec  last July which killed 47 people, has led to concerns over the  safety of shipping crude oil by rail and improper labeling.

Officials have already warned that some fuel found in North  Dakota’s energy patch, the Bakken, could be more volatile and  explosion-prone than other crude oil and that shippers should  take precautions.

Typically, crude oil carries a ‘hazard class 3’  classification and can be shipped in a standard tank car. The  shipments are further assigned a ‘packing group’ to alert to  dangers – that portion of the shipping paper was faulty, the DOT  said.

While the DOT’s Pipeline and Hazardous Materials Safety  Administration (PHMSA) has been testing crude samples for months  and issued several industry warnings, Tuesday’s action is the  first sanction.

Phmsa Administrator Cynthia Quartersman said the fines  reflected “initial findings” and that officials would scrutinize  the corrosivity, pressure and other traits of Bakken crude.

The DOT did not specify which companies would be expected to  pay what share of the $93,000 fines but by any measure the sums  were small for large energy companies.

Officials from Hess and Marathon could not immediately be  reached for comment.

Jack Ekstrom, a spokesperson for Whiting, said that the  company had not yet been contacted by the DOT about a possible  fine.

Derailment, Rail Safety

New York Times: Accidents surge

Repost from the New York Times

Accidents Surge as Oil Industry Takes the Train

By CLIFFORD KRAUSS and JAD MOUAWAD

In North Dakota Town, Virtual Pipelines Prompt Concern
Jim Wilson/The New York Times

CASSELTON, N.D. — Kerry’s Kitchen is where Casselton residents gather for gossip and comfort food, especially the caramel rolls baked fresh every morning. But a fiery rail accident last month only a half mile down the tracks, which prompted residents to evacuate the town, has shattered this calm, along with people’s confidence in the crude-oil convoys that rumble past Kerry’s seven times a day.

What was first seen as a stopgap measure in the absence of pipelines has become a fixture in the nation’s energy landscape — about 200 “virtual pipelines” that snake in endless processions across the horizon daily. It can take more than five minutes for a single oil train, made up of about 100 tank cars, to pass by Kerry’s, giving this bedroom community 20 miles west of Fargo a front-row seat to the growing practice of using trains to carry oil.

“I feel a little on edge — actually very edgy — every time one of those trains passes,” said Kerry Radermacher, who owns the coffee shop. “Most people think we should slow the production, and the trains, down.”

Moving More Oil Over Rails

As domestic oil production has increased rapidly in recent years, more and more of it is being transported by rail because of the lack of pipeline capacity. The trains often travel through populated areas, leading to concerns among residents over the hazards they can pose, including spills and fires.

Some major oil freight railroad lines Source: Union Pacific; Energy Information Administration; Association of American Railroads

Casselton is near the center of the great oil and gas boom unleashed these last few years. And it has seen up close how trains have increasingly been used to transport the oil from the new fields of Colorado, Wyoming and North Dakota, in part as a result of delays in the approval of the Keystone XL pipeline. About 400,000 carloads of crude oil traveled by rail last year to the nation’s refineries, up from 9,500 in 2008, according to the Association of American Railroads.

But a series of recent accidents — including one in Quebec last July that killed 47 people and another in Alabama last November — have prompted many to question these shipments and have increased the pressure on regulators to take an urgent look at the safety of the oil shipments.

In the race for profits and energy independence, critics say producers took shortcuts to get the oil to market as quickly as possible without weighing the hazards of train shipments. Today about two-thirds of the production in North Dakota’s Bakken shale oil field rides on rails because of a shortage of pipelines. And more than 10 percent of the nation’s total oil production is shipped by rail. Since March there have been no fewer than 10 large crude spills in the United States and Canada because of rail accidents. The number of gallons spilled in the United States last year, federal records show, far outpaced the total amount spilled by railroads from 1975 to 2012.

Railroad executives, meeting with the transportation secretary and federal regulators recently, pledged to look for ways to make oil convoys safer — including slowing down the trains or rerouting them from heavily populated areas. (Trains go up to roughly 35 miles an hour through towns and at higher speeds outside populated areas.) They also agreed to speed up a review of tougher standards for the train cars used for oil. And last Thursday, safety officials urged regulators to quickly improve industry standards.

“This is an industry that has developed overnight, and they have been playing catch-up with the infrastructure,” said Deborah A. P. Hersman, the chairwoman of the National Transportation Safety Board, which is investigating the Casselton accident. “A lot of what we’ve seen could have been a lot worse.”

But given the fragmented nature of the business — different companies produce the oil, own the rail cars, and run the railroads — there is no firm consensus on what to do. And few analysts expect new regulations this year.

“There was no political pressure to address this issue in the past, but there clearly is now,” said Brigham A. McCown, a former administrator of the Pipeline and Hazardous Materials Safety Administration. “Producers need to understand that rail-car safety can become an impediment to production.”

The stakes are high. In five years, domestic oil production has jumped by 50 percent, to reach 7.5 million barrels a day last year.

But with little pipeline infrastructure, energy producers had to scramble for new ways to get their oil to refiners. Rail was the answer.

“The reality is that this came out of nowhere,” said Anthony B. Hatch, a rail transport consultant. “Rail has gone from near-obsolescence to being critical to oil supplies. It’s as if the buggy-whips were back in style.”

Far more toxic products are shipped on trains. But those products, like chlorine, are transported in pressurized vessels designed to survive an accident. Crude oil, on the other hand, is shipped in a type of tank car that entered service in 1964 and that has been traditionally used for nonflammable hazardous liquids like liquid fertilizers.

Safety officials have warned for more than two decades that these cars were unsuited to carry flammable cargo: their shell can puncture and tears up too easily in a crash.

In 2009, a train carrying ethanol derailed and exploded, killing one person in Cherry Valley, Ill. The National Transportation Safety Board said the inadequate design of the tank cars made them “subject to damage and catastrophic loss of hazardous materials.”

After that accident, railroads and car owners agreed in 2011 to beef up new cars with better protections and thicker steel. But they resisted improving safety features on the existing fleet because of cost. They also argued that thousands of new cars were being ordered anyway, so it would be just a matter of time before the fleet was replaced.

But analysts said that time has run out; railroads and car owners can no longer ignore the liabilities associated with oil trains, which could reach $1 billion in the Quebec accident.

“Quebec shocked the industry,” Mr. Hatch said, adding that while rail safety has improved over all, “the consequences of any accident are rising.”

Last November, the Association of American Railroads said it would support requiring that the 92,000 tank cars used to transport flammable liquids, including crude oil, be retrofitted with better safety features or “aggressively phased out.”

Still, other groups have resisted. The Railway Supply Institute, which represents freight car owners, told regulators three weeks before the Casselton accident that existing cars “already provide substantial protection in the event of a derailment” and suggested minor modifications to be phased in over 10 years.

While the safety record of railroads has improved in recent years, the surge in oil transportation has meant a spike in spill rates. From 1975 to 2012, federal records show, railroads spilled 800,000 gallons of crude oil. Last year alone, they spilled more than 1.15 million gallons, according to the Pipeline and Hazardous Materials Safety Administration. And that figure does not include the Casselton spill, estimated at about 400,000 gallons.

The accidents have also created a sense of weariness among elected officials and even staunch oil backers.

North Dakota Gov. Jack Dalrymple, a Republican, insisted that the first priority was improving tank cars. “These exploding tank cars are obviously very powerful and very dangerous,” he said.

The accidents have brought another problem to light. Crude oil produced in the Bakken appears to be a lot more volatile than other grades of oil, something that could explain why the oil trains have had huge explosions.

Here too, the warnings came too late.

Federal regulators started analyzing samples from a few Bakken wells last year to test their flammability. In an alert issued on Jan. 2, P.H.M.S.A. said the crude posed a “significant fire risk” in an accident.

The Federal Railroad Administration also pointed to rising numbers of oil cars that showed a “form of severe corrosion” on the inside of the tanks, covers and valves.

After the recent meeting with regulators, the American Petroleum Institute pledged it would share its own test data about the oil, which they have said is proprietary.

While the tank cars themselves have not caused any accident, they failed to contain their cargo. That happened on the outskirts of Casselton when a 106-car oil train crashed into a soybean train that derailed on a parallel track.

In a preliminary report, the N.T.S.B. said 18 of the 20 oil tank cars that derailed were punctured. Much of the oil spilled was incinerated by the explosions, and some soaked into nearby corn fields.

Aside from evacuating nearby farms, there was little the fire department could do but watch the train burn.

Tim McLean, Casselton’s fire chief, pictured what the town would look like if an oil train derailed. The large propane supply tank would explode “like a bomb” and incinerate two multifamily houses next to it. Five blocks to the west are a lumber yard and two gasoline stations. Oil might accumulate in storm sewers and possibly spread a fire underground.

“There’s virtually no way we could protect these buildings,” he said as he passed the barber shops, drugstore and pizza parlor, all occupying sturdy brick buildings more than a century old. “It would be too hot.”

The terror of what might have happened hit many here immediately.

Adrian Kieffer, the assistant fire chief, rushed to the accident and spent nearly 12 hours there, finishing at 3 a.m. “When I got home that night, my wife said let’s sell our home and move,” he said.

A version of this article appears in print on January 26, 2014, on page A1 of the New York edition with the headline: Accidents Surge as Oil Industry Takes the Train
Bakken Shale, Derailment, Federal Regulation (U.S.), Rail Safety, Spill prevention and response

KPIX report: Feds Raise Concerns

Repost from KPIX  Channel 5 / CBS News Bay Area
http://sanfrancisco.cbslocal.com/video/9763450-feds-raise-concerns-over-transporting-crude-oil-by-rail/

Feds Raise Concerns Over Transporting Crude Oil By Rail

Federal officials have sounded the alarm over shipping crude oil by rail, following a series of accidents. The announcement comes as two Bay Area cities consider proposals to accept the shipments. Christin Ayers reports.

KPIX Report: Detailing a New Danger, 23 Jan 2014
KPIX Report: Detailing a New Danger, 23 Jan 2014

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