Tag Archives: Federal Regulation (U.S.)

Tesoro & Phillips 66 building crude railcars stronger than new US rules require

Repost from Reuters
[Editor:  These tank cars exceed the new standard, but still fail on several counts.  For instance, note the closing sentences here: “Hack said Tesoro is talking with Union Tank Car on possibly outfitting crude railcars to add enhanced brakes before the 2021 deadline.  ‘We have some time to make that decision,’ he said.”  You can be sure that every refinery seeking permits for crude by rail will crow that they, too, have ordered newer, safer tank cars.  Get ready, Benicia!   – RS]

EXCLUSIVE-Tesoro building crude railcars stronger than new US rules require

By Kristin Hayes, May 18, 2015 4:59pm BST

(Reuters) – U.S. refiner Tesoro Corp has ordered new crude oil railcars with features that surpass safety standards that federal regulators set this month, executives told Reuters.

The 210 tank cars being built in northern Louisiana are so-called pressure cars, with the same design as those that carry liquid petroleum gases such as propane and butane, gas cargoes that are more flammable than crude oil.

They will be delivered in the coming months after being ordered in early 2014.

The new federal rules for all crude and ethanol railcars built after Oct. 1 of this year do not require strength to the level of a pressure car but are stronger than the standards adopted by the industry in 2011.

Tesoro, like other oil-by-rail players, knew the federal standards were coming and the basics of what they would likely be. But the company went further with a stronger car, “which is the primary thing we control,” C.J. Warner, Tesoro’s head of strategy and business development, told Reuters.

The order was a sign the refiner wanted to get ahead of the coming regulations and avoid potential capacity bottlenecks at companies that build tank cars as shippers must now renovate their fleets.

Booming North American onshore production spurred sharp growth in moving oil by rail, particularly for U.S. West and East coast refiners which otherwise must depend on more costly imports. No major crude pipelines move oil from the Midcontinent west across the Rocky Mountains or east through the Appalachians and densely populated northeastern states.

Fiery derailments, caused in some cases by track failures, have become more frequent as oil-by-rail and crude-only trains carrying 100 cars or more went from nearly nothing five years ago to more than 1 million barrels per day late last year.

Opposition to moving oil by rail spiked on safety concerns, prompting the U.S. Department of Transportation and Canada to impose new railcar safety standards.

Tesoro isn’t the only refiner that didn’t wait for word from the U.S. DOT to order stronger cars.

Phillips 66 confirmed to Reuters that it also last year ordered 350 non-pressurized new cars that mostly match the new DOT standard. Those cars will be delivered by year-end, the company said.

THICKER HULLS

Both sets of new cars have 9/16-inch-thick hulls, steel shields on the front and back and protections for valves and fittings where crude goes in on top and drains out the bottom, as the new rules require, company executives said. Tesoro’s design modifies those fittings to handle crude rather than just LPGs.

Tesoro’s cars also have test pressure specifications of 200 pounds per square inch of internal pressure, twice that for non-pressurized cars. A test pressure is typically 20 to 40 percent of how much pressure it would take for the railcar to burst.

That level of test pressure is standard for cars that transport LPGs or highly poisonous substances such as hydrogen cyanide, according to the Association of American Railroads.

“When we saw the design, we were very comfortable that it would meet the new standards that we anticipated,” John Hack, Tesoro’s head of rail operations, told Reuters.

For Tesoro, which hopes to build the largest oil-by-rail facility in the United States in Washington state, it’s an investment in safety and continued access to cheaper North American crudes.

“It’s very important to us to continue to transport North American crude and get it from the Midcontinent out to the West Coast where it competes very nicely with the foreign crudes,” Warner said.

RETROFITS?

By last year most refiners, including Tesoro and Phillips 66, no longer accepted shipments in older, weaker railcars such as those used on a runaway crude train that careened into the small Quebec town of Lac Megantic in mid-2013, killing 47 people.

Early last year Tesoro needed to replace the last of its older cars and worked with its builder, Berkshire Hathaway Inc’s Union Tank Car, to develop the new design, Warner said.

Tesoro and Phillips 66 aim to use their newest cars in crude trains before deciding whether to order more. Both companies’ fleets meet the 2011 industry standard for cars with 7/16-inch-thick hulls and reinforced valves.

Those 7/16-inch cars don’t have to be thrown out, but to move in crude-only trains, they will need added protections, including ‘jackets’, or an extra layer of steel around the tank, according to the DOT rules.

Neither Tesoro’s nor Phillips 66’s new cars are equipped with specialized brakes that the DOT said crude-only trains must have starting in 2021 or be held to 30 miles per hour. An oil industry trade group is challenging that provision in court.

Hack said Tesoro is talking with Union Tank Car on possibly outfitting crude railcars to add enhanced brakes before the 2021 deadline.

“We have some time to make that decision,” he said.

(Reporting by Kristen Hays; Editing by Terry Wade and James Dalgleish)

Valero Benicia environmental report delayed again – not likely to withstand further scrutiny

By Roger Straw, Editor, The Benicia Independent

Valero Benicia Crude By Rail environmental report delayed for review of new federal regulations

Valero_Crude_by_Rail-Project_Description_March_2013_(cover_page)The City of Benicia issued an announcement on May 21, 2015 delaying its release of a revised draft environmental impact report on Valero Benicia Refinery’s proposal to construct an offloading facility for delivery of crude by rail.

With this delay, The City will now have spent more than two and a half years processing Valero’s proposal and responding to the objections of concerned residents, experts and nearby officials.

Valero’s application for a use permit came to City staff in December, 2012.  In May of 2013, Benicia’s Community Development Director issued a Notice of Intent and a Mitigated Negative Declaration, concluding that the proposal with mitigations was so benign as to not even need environmental review.

Following outcries and organized opposition, the City commenced a full environmental review in August, 2013.  The Draft EIR was released after several delays in June, 2014.   That review received an avalanche of critiques, including expert local analyses, professional review and letters from residents and area governing bodies and a highly critical letter from the California Attorney General.

After yet another lengthy delay, the City announced in February 2015 that, in response to the magnitude of public criticisms, project consultants would revise the DEIR and release it by June 30, 2015 for recirculation and another 45-day public comment period.

According to the City of Benicia’s Thursday announcement, the new 2-month delay (until August 31, 2015) will give consultants “time to include additional analysis of the new regulations announced on May 1, 2015 by the Department of Transportation to strengthen safe transportation of flammable liquids by rail.”

The City consultant’s analysis, seemingly favoring Valero’s proposal from the outset, will likely make the case that new federal safety standards strengthen environmental protections for this project and improve Valero’s chances for landing a use permit.  This analysis, of course, will come under heavy fire due to the inadequacy of the new federal rules, and likely will not withstand the scrutiny of Benicia citizens, officials and regional authorities and stakeholders.

All along, leaders of Benicians For a Safe and Healthy Community (BSHC) have stressed that Valero’s proposal is fatally flawed as shown in a list of significant DEIR failures, including the longstanding lack of adequate federal safety regulations governing rail transport of high hazard flammable liquids (see especially Section 2, #3, pp. 13-15).

More recently, BSHC has joined a chorus of national and international environmentalists and elected officials who are dismissive of the new (May 1) rules issued by the Department of Transportation.  (See NYTimes article.)  The new rules fail to adequately govern oil train routing, speed, braking systems and public notification, and leave entirely too many years for retirement and retrofitting of unsafe tank cars and the design and manufacture of tank cars to newer, safer standards.

BSHC and others have called for an immediate moratorium on all shipment of crude oil by rail, and a speedy transition to clean and renewable energy sources that will “leave the oil in the soil.”

The City’s announcement:

“The anticipated release of the Recirculated Draft Environmental Impact Report (RDEIR) on the Valero Crude by Rail project has been postponed to August 31, 2015.  The delay will provide the City with the necessary time to include additional analysis of the new regulations announced on May 1, 2015 by the Department of Transportation to strengthen safe transportation of flammable liquids by rail. The RDEIR will have a 45-day comment period, beginning August 31, 2015, which will include public hearings where the community may comment on the RDEIR. After the comment period closes, the City will complete the Final EIR which will include responses to all comments on the original Draft EIR and the RDEIR. The Final EIR and the project will then be discussed at subsequent public hearings.”

Riverkeeper sues U.S. DOT over oil train safety rules

Repost from The Times Union, State College, PA
[Editor: Note that this is a new filing, closely following the filing of May 14 by a coalition of environmental groups.  – RS]

Riverkeeper sues U.S. DOT over oil train safety rules

By Brian Nearing, May 18, 2015

The Hudson River environmental advocacy group Riverkeeper is challenging new U.S. Department of Transportation crude-by-rail standards in federal court, saying that they fail to protect the public and the environment from proven threats, according to a statement issued Monday.

The release states: Riverkeeper filed its lawsuit in the 2nd Circuit Court of Appeals in New York City on May 15, a little more than a week after the DOT issued a final tank car and railroad operation rule which had been the subject of scrutiny and controversy since its proposal in 2014. The suit closely follows another filed in the 9th Circuit Court of Appeals by a coalition of conservation and citizen groups that includes Earthjustice, Waterkeeper Alliance, ForestEthics and the Sierra Club.

The Hudson River and the Greater New York/New Jersey region, a thoroughfare for up to 25 percent of all crude shipments originating in the Bakken shale oil region, faces a daily risk of spills and explosions that could devastate communities, local economies, drinking water security, and the environment.

“These seriously flawed standards all but guarantee that there will be more explosive derailments, leaving people and the environment at grave risk,” Riverkeeper President Paul Gallay said. “The shortcomings are numerous, including an inadequate speed limit, unprotective tank car design, and time line that would allow these dangerous tank cars 10 more years on the rails. The DOT completely fails to recognize that we’re in the middle of a crisis – we don’t need bureaucratic half measures that are years away from implementation, we need common-sense protections today.”

Just this month, tank cars laden with crude oil derailed and exploded in Heimdal, North Dakota. Under the new DOT standards, the same type of cars that exploded in that disaster could stay in service hauling volatile crude oil for another five to eight years, or even indefinitely if they are used for tar sands.

Over the past several years, a series of fiery derailments, toxic spills, and explosions involving volatile crude and ethanol rail transport has caused billions in damages across North America. Crude-by-rail accidents threaten irreversible damage to waterways, many of which, like the Hudson River, serve as the source of drinking water for tens of thousands of people. This year alone,six oil-by-rail shipments have caught fire and exploded in North America. In July 2013, a derailment in Lac-Mégantic, Quebec, killed 47 people. The total liabilities for that rail disaster could easily reach $2.7 billion over the next decade.

Here are some of the ways the new safety standards fail to protect people and the environment:

• Hazardous cars carrying volatile crude oil can remain in service for up to 10 years.

• The rule rolls back public notification requirements, leaving communities and first responders in the dark about explosive crude oil tank cars rumbling through their towns.

• While new tank cars will require thicker shells to mitigate punctures and leaks, retrofit tank cars will be allowed to stay in use with a less protective design standard.

• Speed limits have been restricted only for “high threat urban areas,” but only two areas in New York have received that designation, Buffalo and New York City.

• The “high threat” category relates to cities seen as vulnerable to terrorist attacks by the Department of Homeland Security. It is unrelated to actual risks posed by crude-by-rail.

NYU Institute for Policy Integrity: New oil train safety rules spell delay, leaving citizens at risk

Repost from The Hill

New oil train safety rules spell delay, leaving citizens at risk

By Jayni Hein, contributor, May 18, 2015, 10:00 am

Chicago, Philadelphia and Sacramento, Calif.: These are just a few of the cities within the “blast zones” of mile-long trains carrying flammable crude oil across the country. Twenty-five million Americans live in these vulnerable areas; yet it will be years until dangerous tank cars are retrofitted or retired from the rails, based on the U.S. Department of Transportation’s new safety standards.

The standards, released on May 1, cover railcars that carry the nation’s growing supply of volatile crude oil produced in the Bakken region of the northern United States and the Canadian tar sands. While the new rules mark incremental progress, they give residents little reason to rest easy. And more implementation delays could be coming — the American Petroleum Institute filed a petition in federal court on Monday challenging the new rules, and other legal challenges may be on the horizon.

When it comes to oil train derailments, it’s no longer a question of “if,” but “when.” Driven by growth in the production of oil in the U.S. and Canada, there has been a staggering increase in rail transportation of crude oil over the past five years, with a corresponding spike in the number of accidents — many causing explosions, oil spills and fatalities. The latest incident happened earlier this month, when a train carrying Bakken crude oil derailed and caught fire in central North Dakota, forcing the evacuation of a small town.

In 2008, only 9,500 tank car loads of crude were transported by rail in the United States. By 2013, that number rose to 400,000. In 2013, more oil spilled from U.S. trains than in the previous four decades combined. In addition to putting citizens directly at risk, these trains pass over important sources of drinking water — such as the Sacramento River in drought-stricken California — and share track with commuter rail in many urban areas, including Philadelphia.

The Department of Transportation initiated a rule-making last year to update railcar design standards, speed limits and routing requirements for trains carrying 20 carloads or more of flammable crude oil. The agency’s final rule maintains some of the positive aspects of its proposed rule: new electronically controlled pneumatic brake requirements, lower speed limits for older tank cars moving through “high-threat urban areas,” and new routing analysis requirements.

But, in other ways, the final rule represents a step backwards from the Department of Transportation’s initial proposal. And more fundamentally, the rule puts a Band-Aid on a chronic condition caused by booming fossil fuel production, ongoing reliance on oil and aging transportation infrastructure.

First, the final rule exempts many trains that would have been made safer under the initial proposal. Originally, any train carrying 20 or more cars with flammable oil or ethanol was defined as a “high-hazard flammable train” subject to these standards. The final rule applies only to trains carrying at least 35 tank cars of flammable oil or ethanol, or 20 cars of flammable liquid in a continuous block. This final definition, then, encompasses fewer trains.

Second, the rule suffers from a lengthy, five- to eight-year retrofit or phaseout of DOT-111 and CPC-1232 railcars that have been known to puncture upon derailment for many years. These are the same cars that were involved in the Lac Mégantic, Quebec tragedy in July 2013 that killed 47 people and in the five major accidents in 2015 (thus far) in West Virginia, Illinois, North Dakota and two locations in Ontario. The protracted phaseout means many additional years of dangerous tank cars sharing track with commuter rail, traveling through dense population centers, and crossing water bodies and other sensitive environmental habitats. The delay is especially striking, as National Transportation Safety Board reports dating back to 1991 detail the high failure and puncture rates of DOT-111 tank cars. However, the agency determined that a quicker phaseout of DOT-111 cars would cause negative effects by temporarily shifting oil transportation from rail to trucks, increasing hazardous air pollution and traffic-related fatalities.

Finally, while the rule imposes 40-mph speed limits for non-retrofitted trains traveling through “high threat urban areas,” only a few dozen cities around the nation have been so designated, leaving many towns, cities and drinking-water sources highly vulnerable.

In the next year, the Department of Transportation should prioritize additional measures, like increasing railcar and track inspections, lowering speed limits in additional urban areas, sharing risk reduction “best practices” among the railroads and potentially tightening design standards for retrofitted cars to align with the standards for new cars.

The department should also coordinate closely with the states to modernize communication systems, improve spill prevention and response planning, ensure that states are empowered to train and fund additional rail inspectors, and collaborate to identify high-priority infrastructure needs, such as bridge and track improvements.

Ideally, these safety improvements should be made as part of an “all of the above” strategy to reduce our reliance on fossil fuels while ensuring that domestic production and transportation are as safe as possible in the near-term. The new rail safety rules are a necessary first step on what looks to be a long, uncertain journey.

Hein is the policy director at the Institute for Policy Integrity, focusing on climate change, energy and transportation issues.