Federal data: Not many oil trains for Keystone XL to displace
By Curtis Tate, McClatchy Washington Bureau, April 2, 2015
Miles of pipe ready to become part of the Keystone Pipeline are stacked in a field near Ripley, Okla, Feb. 1, 2012. SUE OGROCKI — AP
New data on crude oil shipments by rail released by the Department of Energy this week show that there are relatively few oil trains taking the path of the controversial proposed Keystone XL pipeline.
In its first monthly report on crude by rail, the U.S. Energy Information Administration shows that the bulk of oil shipments by rail are moving from North Dakota’s Bakken region to refineries in the mid-Atlantic and the Pacific Northwest.
Far less is moving from either Canada or the Midwest to the Gulf Coast, the location of 45 percent of U.S. refining capacity. Only about 5 percent of the crude oil moved by rail nationwide in January was bound for the Gulf Coast from either Canada or the Midwest.
A series of derailments has brought increased scrutiny to oil transportation by rail. Since the beginning of the year, four oil trains have derailed in the U.S. and Canada, leading to spills, fires and evacuations.
The White House Office of Management and Budget is reviewing new regulations intended to improve the safety of oil trains. They’re scheduled for publication next month.
Some supporters of the 1,700-mile Keystone project have claimed that it would reduce the need for rail shipments. The pipeline would have a projected capacity of 830,000 barrels a day, and would primarily move heavy crude oil from western Canada to the Gulf Coast.
The government’s new data confirms, however, that the primary flows of oil by rail are not to the Gulf Coast. Northeast refineries, concentrated in Delaware, Pennsylvania and New Jersey, have come to rely heavily on Bakken crude delivered by rail, and to a lesser extent, Canadian oil.
Oil trains have resulted in a 60 percent decline in oil imported to the East Coast from overseas countries, according to EIA.
Of the roughly 1 million barrels a day of oil that moved by rail in January, according to EIA, 914,000 barrels were from the Midwest petroleum-producing district that includes North Dakota, while another 130,000 barrels a day crossed the border from Canada.
In a report last month, the Energy Department projected that shipments of Canadian oil by rail could more than triple by 2016.
The mid-Atlantic region received 437,000 barrels a day from the Midwest district, and only 61,000 barrels from Canada. That’s roughly the equivalent of six or seven 100-car trains, each carrying about 3 million gallons.
Another 171,000 barrels a day from the Midwest, or about two to three 100-car trains, supplied West Coast refineries, mostly in Washington state.
The Gulf Coast region received only 107,000 barrels of oil a day from the Midwest and Canada combined. Another 107,000 barrels came from the Rocky Mountain petroleum-producing district, which includes the Niobrara region of Colorado and Wyoming.
Including oil that comes from west Texas or New Mexico, the equivalent of about three to four 100-car trains arrive at the Gulf Coast every day.
Why oil trains (don’t have to) explode: Everything you need to know
By Rob Davis | April 02, 2015 at 1:22 PM
Smoke and flames erupt from the scene of an Illinois oil train derailment March 5, 2015. Safety experts say regulators have ignored steps that would make oil trains less likely to go off like a bomb when they derail. (AP/Jessica Reilly)
Crude oil was never supposed to explode.
Then a train pulling 72 cars of it derailed in a tiny town in Quebec in July 2013. The oil turned into a mushroom cloud of flame. It looked terrifying. Watch the first minute of this video:
Forty-seven people were killed that night.
Since then, eight more trains hauling oil have derailed and erupted in flames, drawing scrutiny to a new phenomenon: Crude oil, which once primarily moved in ships and pipelines, is being hauled around North America by rail in unprecedented volumes. More than a million barrels a day now move that way.
The federal government, which regulates train safety, has slowly moved to make oil trains more secure. Regulators are focusing on strengthening the tank cars carrying the oil.
But safety experts say regulators have ignored steps that would make oil trains less likely to go off like a bomb when they derail.
Depending on where it is produced, oil can be dark and thick or light and free flowing. Different amounts of highly flammable gases like propane and butane can be dissolved in it, affecting its volatility. (These are what your backyard gas grill uses.)
Much of the oil moving by rail comes from North Dakota. And what’s coming out of the ground there has been unusually volatile. North Dakota crude moving in Oregon contains far higher levels of propane than similar types of oil.
Some North Dakota crude has been more volatile than gasoline. So when the trains have derailed, the flammable gases within have fueled those sky-high fireballs.
That doesn’t have to happen.
Michael Eyer, a retired Oregon hazardous materials train inspector, said federal regulators could impose a cap on the amount of flammable gas allowed in the oil.
“You would have a fire,” Eyer said. “But you would not have the mushroom cloud in the sky.”
Producers can strip out those highly flammable gases before the oil is loaded for shipment. The process is called stabilization. North Dakota oil regulators estimate it would add $2 to the cost of every barrel.
Less volatile oil could still burn in a derailment, Eyer said. But nearby residents and firefighters responding to train accidents would be safer: Those fireballs don’t just shoot up. They spread, too.
State regulators in North Dakota have set the first ever limit to tame the most volatile crude. It went into effect April 1. It requires a less-intense treatment process that North Dakota regulators estimate will cost 10 cents per barrel.
But Eyer and a crude oil expert say the limit is too high to have widespread impact. The oil that exploded in Quebec in 2013, for example, wouldn’t have been affected.
Harry Giles is a retired federal official who used to oversee crude oil quality for the country’s Strategic Petroleum Reserve. He said North Dakota’s limit should be set lower.
“It would increase the safety and lessen the risk,” Giles said. “Fires would be less intense.”
Compare this fire during a May 2011 derailment northwest of Portland near Scappoose. That’s ethanol — pure grain alcohol — burning. It’s far less volatile than North Dakota crude.
The fire was still dangerous. But firefighters were able to get close enough to put water on the cars. That’s a fire hose spraying at the top of the photo.
Now see what happened after a December 2013 derailment with crude oil in North Dakota.
Look close. That’s a train down there at the bottom.
Stricter limits would reduce the dangers faced by millions of people who live next to rail lines nationwide, Eyer said.
That includes Oregonians like Jamie Maygra, a retired ironworker who lives in Deer Island, along the state’s primary oil train route. He said he worries about the oil’s volatility every time he drives near an oil train with his 2- and 3-year-old granddaughters.
He said he’s frustrated that neither industry nor safety regulators have moved faster to keep people like his granddaughters safe.
“I think about that all the time,” Maygra said. “The chances of that happening are slim, but it’s a lot more with this oil. They don’t care about nothing but money. That’s what’s aggravating. They put profit before people.”
Federal safety regulators say they’re studying what makes the oil so flammable and what could be done. Tim Butters is the administrator of the Pipeline and Hazardous Materials Safety Administration, the federal agency with authority to set limits. He recently told a Congressional committee his agency, known as PHMSA, is looking at ways to remove flammable gases from crude.
But the methods for doing that are already well known. They’re currently used in Texas oil fields, where flammable gases are separated and piped to nearby plants.
Eyer said the agency should move faster.
“The industry needs to figure out what the hell this stuff is and regulators need to say ‘We’re going to act now,’ ” he said. “How many rivers on fire and deaths are needed? What is the price?”
If federal regulators forced North Dakota producers to emulate what happens in Texas, those producers would have to burn or ship the gases they stripped from the oil. Currently, though, North Dakota does not have enough pipelines to move those flammable gases nor a market for them.
Susan Lagana, a PHMSA spokeswoman, said her agency is concerned about the volatility of oil moving by rail. But research is needed to determine exactly what makes the explosions so severe, she said, and what could be done to minimize them.
Eyer and Giles agreed that North Dakota’s volatility limits were too high, but they didn’t agree about what the right level is.
“That’s what we need to know,” Lagana said. “We are willing to consider all options to address making the product safer in transportation.”
The relevant research, being done by the federal Energy Department, should be finished this summer, Butters told Congress. But he didn’t promise any next steps once it’s done.
In the meantime, allowing producers to leave those flammable gases in the oil gives them more profit, allowing them to slightly bulk up the volumes they ship. It’s one reason the oil industry is fighting suggestions to stabilize North Dakota oil.
Don’t blame the oil for explosions, the industry argues. Blame the derailing trains.
“Keeping the trains on the tracks is the only way to ensure that crude… will be transported in the safest possible manner,” Charles Drevna, president of American Fuel and Petrochemical Manufacturers recently wrote.
Solely focusing on tank cars and trains “is not enough,” Eyer said. “The starting point is always what are you putting into the car?”
A bill introduced recently in the U.S. Senate by Democratic Sens. Patty Murray, Maria Cantwell, Dianne Feinstein and Tammy Baldwin proposes limiting the volatility of oil moving by rail. They want the rules in place within two years.
It’s a sign that political leaders have realized the North Dakota oil poses unique risks that could be reduced. A spokeswoman for Sen. Ron Wyden, D-Oregon, said he is tracking the issue and continues talking to federal transportation officials to find ways to address it.
Repost from Reuters [Editor: Reference below is to an important new Energy Department study on the volatility of Bakken crude. – RS]
North Dakota’s new oil train safety checks seen missing risks
By Patrick Rucker, Mar 31, 2015 4:14pm EDT
WASHINGTON, March 31 (Reuters) – New regulations to cap vapor pressure of North Dakota crude fail to account for how it behaves in transit, according to industry experts, raising doubts about whether the state’s much-anticipated rules will make oil train shipments safer.
High vapor pressure has been identified as a possible factor in the fireball explosions witnessed after oil train derailments in Illinois and West Virginia in recent weeks.
For over a year, federal officials have warned that crude from North Dakota’s Bakken shale oilfields contains a cocktail of explosive gas – known in the industry as ‘light ends.’
The new rules, which take effect on April 1, aim to contain dangers by spot-checking the vapor pressure of crude before loading and capping it at 13.7 pounds per square inch (psi) – about normal atmospheric conditions.
The plan relies on a widely-used test for measuring pressure at the wellhead, but safety experts say gas levels can climb inside the nearly-full tankers, so the checks are a poor indicator of explosion risks for rail shipments.
It is “well-understood, basic physics” that crude oil will exert more pressure in a full container than in the test conditions North Dakota will use, said Dennis Sutton, executive director of the Crude Oil Quality Association, which studies how to safely handle fossil fuels.
Ametek Inc, a leading manufacturer of testing equipment, has detected vapor pressure climbing from about 9 psi to over 30 psi – more than twice the new limit – while an oil tank is filled to near-capacity.
About 70 percent of the roughly 1.2 million barrels of oil produced in North Dakota every day moves by rail to distant refineries and passes through hundreds of cities and towns along the way.
The state controls matter to those communities because there is no federal standard to curb explosive gases in oil trains.
North Dakota officials point out that the pressure limit is more stringent than the industry-accepted definition of “stable” crude oil. They also say that they lack jurisdiction over tank cars leaving the state and that the pressure tests are just one of the measures to make oil trains safer.
“We’re trying to achieve a set of operating practices that generates a safe, reliable crude oil,” Lynn Helms, director of the North Dakota Department of Mineral Resources, has said. Helms has also said that test readings for near-full containers were less reliable.
However, given different testing and transport conditions, industry officials say the pressure threshold may need to be lowered to reduce the risks.
Limiting vapor pressure to 13.7 psi in transit would require an operator to bring it to “something well below that” at the loading point, Sutton said.
The uncertainty about regulatory reach and safety has spurred calls for the White House to develop national standards to control explosive gas pressure.
“Let me be really clear,” Democratic Senator Maria Cantwell of Washington state told reporters last week. “They should set a standard on volatility.”
The National Transportation Safety Board, an independent safety agency, has already encouraged a federal standard for “setting vapor pressure thresholds” for oil trains citing Canadian findings linking such pressure and the size of explosions in train accidents.
Meanwhile, a leading voice for the oil industry is lobbying Congress to resist federal vapor pressure benchmarks.
Last week, the American Petroleum Institute urged lawmakers to oppose “a national volatility standard” and pointed to an Energy Department study that the severity of an oil train mishap may have more to do with the circumstances of the crash than the volatility of the cargo.
That same report said much more study was needed to understand volatility of crude oil from the Bakken. (For a link to the study: tinyurl.com/nvjqmxt)
The oil industry has said that wringing ‘light ends’ out of Bakken crude may keep a share of valuable fuel from reaching refineries.
Reuters reported early this month that Transportation Secretary Anthony Foxx took his concerns about Bakken oil volatility to the White House last summer and sought advice on what to do about the danger of explosive gases.
The administration decided that rather than assert federal authority it would allow the North Dakota rules to take root, according to sources familiar with the meeting.
(Reporting By Patrick Rucker; Additional reporting by Ernest Scheyder in North Dakota; Editing by Tomasz Janowski, Bernard Orr)
Green Groups press for $100 million state Oil Spill Fund
Claim $40M proposed in state budget won’t cover cost of derailments
By Kim Smith Dedam, March 23, 2015
ELIZABETHTOWN — Environmental groups are pushing state lawmakers to bulk up the state’s Oil Spill Fund.
They see a need for $100 million set aside, not $40 million as is currently proposed in the executive and legislative budgets.
And they have asked Gov. Andrew Cuomo and legislators to leave the money within the purview of the State Comptroller’s Office and not move the fund to State Department of Environmental Conservation coffers.
“This is a backup fund, mainly because in other cases, where a spill has led to significant cleanup costs, some companies go out of business, including the company whose accident resulted in the explosion at Lac-Megantic in Quebec,” Adirondack Council spokesman John Sheehan said in an interview this week.
“At that point, there is little the state can do to get the money from the company other than to go to court.”
‘DOESN’T TAKE MUCH’
Total liabilities for the Lac-Mégantic, Quebec, rail disaster in July 2013 could easily reach $2.7 billion over the next decade, the coalition said in a news release.
The Adirondack Council joined forces with Environmental Advocates, the Sierra Club and Riverkeeper to press the Oil Spill Fund issue.
“Typically, the requirement for (accident) insurance has not been high enough to cover the cost of an accident that could take place as the result of an explosion,” Sheehan told the Press-Republican.
“And it doesn’t take much oil to contaminate thousands of gallons of water, especially when we’re talking about a drinking water supply for 188,000 people, which Lake Champlain is.”
The Canadian Pacific Railroad line runs the entire length of Lake Champlain’s western shore, and oil train trips have increased in recent months.
Many places where oil cars have spilled and exploded sustained permanent environmental damage, Sheehan said.
$60 MILLION MORE
The coalition is not trying to force funding contributions from oil transport companies or the railroads to bolster state Oil Spill Funds.
They do believe lawmakers in Albany are on the right track in looking to increase funding for next year.
“However, the $15 million increase to $40 million proposed by (Cuomo) and Assembly budgets could and should be increased.
“In today’s dollars, the $25 million fund created in 1977 would be a $96.4 million fund today,” the coalition said in a news release.
“Thus, we urge that the fund cap be increased to $100 million to bring it back to parity with the monetary protection it afforded nearly four decades ago.”
They also charge that the Oil Spill Fund should be indexed to keep pace with inflation.
10 WRECKS YEARLY
“Federal regulators have told us to expect at least 10 major derailments of crude oil trains a year. There have already been four in the last three weeks,” Kate Hudson, Riverkeeper’s Special Projects director, said in a news release.
“It’s no longer a matter of if, but when, a catastrophe will happen in a New York community. If we are without a robust spill fund, New York citizens could be left to shoulder the cost of the cleanup and damages, just as the citizens of Canada were a year and a half ago.”
SEPARATE ACCOUNTS
Environmental advocates also asked Albany to fund emergency response separately from oil spill response and environmental cleanup.
“We welcome proposed funding for emergency response equipment, supplies and training for state and local emergency services personnel,” the coalition said in a news release.
“We strongly support the Assembly’s proposed legislation, which would keep that funding separate from the account that pays for remediation costs, as well as the damages associated with loss of life and property damage and economic losses suffered by individuals and businesses in the event of a spill.”
If response and spill monies are kept in a joint account, they contend, emergency cleanup costs could deplete the response fund, leaving the state without resources to remediate a spill.
‘TREMENDOUS RISK’
Roger Downs, conservation director for the Sierra Club’s Atlantic Chapter, said New Yorkers assume “tremendous risk and little economic benefit” from the millions of gallons of explosive crude oil that “rumble through our cities and along our precious waterways every day.”
Inaction on the part of the federal government to adequately address the risks or improve oil-tank-car safety should not prevent state lawmakers from building the most robust spill fund possible, he said.
The joint call for heightened oil-spill resources came within a day of the release of reports from state inspections done at railroad yards in Albany and Buffalo.
State inspectors found 93 defects in tracks and crude oil cars, including seven critical safety defects that had to be fixed before cars could continue operation.
Inspections were done on tankers at a CSX rail yard in Buffalo and at the Canadian Pacific yard in Albany.
