Tag Archives: Kinder Morgan Richmond

Wall Street Journal analyzes California fracking and crude-by-rail, discusses Valero Benicia plan, others

Repost from The Wall Street Journal
[Editor:  Following the money…  WSJ’s important analysis of refinery trends in California includes a brief discussion of current and proposed projects, including Valero Benicia, with quotes by Valero spokesperson Bill Day and Andrés Soto on behalf of Benicians For a Safe and Healthy Community.  Significant quote: “Opposition over safety has drawn out the permitting process in some cases, making some companies rethink their strategies. Valero Energy Corp. in March canceled plans to build an oil-train terminal near its Los Angeles refinery. But Valero still hopes to add a terminal to the company’s Benicia, Calif., plant, 35 miles northeast of San Francisco.   ¶“Every day that goes by that we’re not able to bring in lower cost North American oil, is another day that the Benicia refinery suffers competitively,” says spokesman Bill Day. The state last month asked Benicia for another safety review to better forecast the potential for derailments and other accidents.” – RS]

California Finally to Reap Fracking’s Riches

Crude-by-Rail From Bakken Shale Is Poised to Reverse State Refiners’ Rising Imports
By Alison Sider and Cassandra Sweet, Oct. 7, 2014
Tanker cars line up in Bakersfield, Calif., where Alon USA Energy recently received permission to build the state’s biggest oil-train terminal. The Bakersfield Californian/Associated Press

For the past decade, the U.S. shale boom has mostly passed by California, forcing oil refiners in the state to import expensive crude.

Now that’s changing as energy companies overcome opposition to forge ahead with rail depots that will get oil from North Dakota’s Bakken Shale.

Thanks in large measure to hydraulic fracturing, the U.S. has reduced oil imports from countries such as Iraq and Russia by 30% over the last decade. Yet in California, imports have shot up by a third to account for more than half the state’s oil supply.

“California refineries arguably have the most expensive crude slate in North America,” says David Hackett, president of energy consulting firm Stillwater Associates.

Part of the problem is that no major oil pipelines run across the Rocky Mountains connecting the state to fracking wells in the rest of the country. And building pipelines is a lengthy, expensive process.

Railroads are transporting a rising tide of low-price shale oil from North Dakota and elsewhere to the East and Gulf coasts, helping to keep a lid on prices for gasoline and other refined products.

Yet while California has enough track to carry in crude, the state doesn’t have enough terminals to unload the oil from tanker cars and transfer it to refineries on site or by pipeline or truck.

Just 500,000 barrels of oil a month, or 1% of California’s supply, moves by rail to the state today. New oil-train terminals by 2016 could draw that much in a day, if company proposals are successful.

Bakken oil since April has been about $15 a barrel cheaper than crude from Alaska and abroad, according to commodities-pricing service Platts. That would cover the $12 a barrel that it costs to ship North Dakota crude to California by rail, according to research firm Argus.

The state’s lengthy permitting process has contributed to the shortage of oil-train terminals. Some California lawmakers also want to impose fees on oil trains to pay for firefighting equipment and training to deal with derailments and explosions. And community and environmental activists have been waging war on oil trains. The dangers of carrying hazardous materials by rail were underscored Tuesday when a train carrying petroleum derailed in Canada.

But energy companies recently won two hard-fought victories that will pave the way for California to get more crude by rail.

Kern County officials last month gave Alon USA Energy Inc. permission to build the state’s biggest oil-train terminal. That project, which the company hopes to finish next year, is designed to receive 150,000 barrels of oil a day in Bakersfield, Calif., 110 miles north of Los Angeles.

The site was home to an asphalt refinery until 2012 when Alon shut it down because it struggled to turn a profit. Alon plans to reconfigure and restart the plant, but much of the oil transported there by train will move by pipeline to other companies’ refineries in California.

Plains All American Pipeline LP says it plans to open a 70,000-barrel-a-day oil-train terminal in Bakersfield this month.

And in northern California, a judge last month dismissed a lawsuit brought by environmental groups that challenged Kinder Morgan Inc.’s rail permits. The company is now receiving oil trains at a Richmond, Calif., terminal near San Francisco that was built to handle ethanol.

Opposition over safety has drawn out the permitting process in some cases, making some companies rethink their strategies. Valero Energy Corp. in March canceled plans to build an oil-train terminal near its Los Angeles refinery. But Valero still hopes to add a terminal to the company’s Benicia, Calif., plant, 35 miles northeast of San Francisco.

“Every day that goes by that we’re not able to bring in lower cost North American oil, is another day that the Benicia refinery suffers competitively,” says spokesman Bill Day. The state last month asked Benicia for another safety review to better forecast the potential for derailments and other accidents.

Several oil-train explosions in the last 15 months—including last year’s blast in Lac-Mégantic, Quebec, that killed 47 people—have struck fear in many residents along rail corridors.

“These railcars are not safe at any speed,” says Andrés Soto, a musician from Benicia who has helped organize campaigns against several oil-train projects. “We don’t see that there’s any way that they can actually make these projects fail-safe.”

Environmental-impact challenges have been one means that groups have used to delay oil trains.

Pittsburg, Calif., officials say WesPac Midstream LLC’s proposed oil-train terminal is on hold after the state attorney general asked for an expanded environmental review. The company is gathering answers for regulators and hopes to gain approval and start accepting oil trains at the site by late 2016, 40 miles east of San Francisco, a WesPac spokesman says.

Even if oil trains are kept off California tracks, more fracked crude still could flow to California. A 360,000-barrel-a-day oil-train terminal in Vancouver, Wash., aims to transfer North Dakota crude from tanker cars to barges that will sail the Columbia River about 100 miles northwest to the Pacific Ocean. From there, it is a quick trip down the coast to California ports.

That project also has faced stiff headwinds. Refiner Tesoro Corp. and transportation provider Savage Cos. were forced to postpone the start for the Vancouver terminal because of approval delays. While the governor hasn’t approved the project, the companies say they expect to be up and running next year.

Crude-by-rail: One federal inspector oversees all California’s railroad bridges, no state oversight

Repost from The Contra Costa Times
[Editor:  The issue of bridge safety is important here in Benicia for two reasons.  Locally, we understand that Valero’s proposed oil trains would roll PAST the refinery in order to back into the offloading racks, thus coming to a stop near enough to the Benicia-Martinez bridge that, in the event of an explosion, the bridge itself could be severely impacted if not destroyed.  Beyond Benicia, our little City’s decision would impact rail lines all the way from Alberta and North Dakota, including bridges of questionable security all along the way.  – RS]

Crude-by-rail: One federal inspector oversees all California’s railroad bridges, no state oversight

By Matthias Gafni, 09/12/2014
View of the underside of the Benicia-Martinez Railroad Drawbridge in Benicia, Calif., on Friday, Aug. 15, 2014. (Jose Carlos Fajardo/Bay Area News Group)
View of the underside of the Benicia-Martinez Railroad Drawbridge in Benicia, Calif., on Friday, Aug. 15, 2014. (Jose Carlos Fajardo/Bay Area News Group)

As concerns grow over aging rail infrastructure, earthquake readiness and a dramatic increase in crude oil shipments by train, state railroad regulators are scrambling to hire their first-ever railroad bridge inspectors — two of them.

Once they are hired, the California Public Utilities Commission plans to create a state railroad bridge inventory to determine which are most at risk. That’s right — neither the state nor federal government has a list of railroad bridges for California or the rest of the country. Until that happens, the safety of California’s thousands of railroad bridges — key conduits that carry people and hazardous materials over environmentally sensitive ecosystems and near urban areas — is left up to rail line owners and a single federal inspector who splits his time among 11 states.

An Amtrak train crosses the Benicia-Martinez Railroad Drawbridge in Benicia, Calif., on Friday, Aug. 15, 2014. (Jose Carlos Fajardo/Bay Area News Group)
An Amtrak train crosses the Benicia-Martinez Railroad Drawbridge in Benicia, Calif., on Friday, Aug. 15, 2014. (Jose Carlos Fajardo/Bay Area News Group)

“Two more inspectors is better than none, but it’s really a Band-Aid,” said Suma Peesapati, attorney with Earthjustice, an environmental group fighting the oil rail influx. “I think there should be no crude by rail over those bridges until there’s a comprehensive look at all of them.”

No California rail bridges have failed in recent memory, but the 6.0 earthquake that rattled the Napa area on Aug. 24 provided a reminder that California must monitor its aging rail infrastructure.

Following the quake, the Federal Railroad Administration worked with Caltrans to contact railroads within a 100-mile radius and ensure bridges and tracks were inspected for damage before resuming normal operations. The Napa Valley Wine Train, which was closed for two days after the quake, had its own private inspector go over the tracks and numerous bridges, including one traversing Highway 29. The inspector gave the green light to continue running Aug. 26.

Caltrans employs 120 inspectors and 80 specialty personnel to inspect the state’s public automobile highway bridges to ensure the integrity of the elevated structures, in comparison to the one federal inspector for all of California’s rail bridges, most of which are privately owned.

Those railroad bridges are inspected, maintained and regulated by company personnel, but watchdogs say that’s far from adequate.

In its annual Railroad Safety Activity Report to the state Legislature in November, the CPUC identified the state’s railroad bridges as a “potential significant rail safety risk.”

“There are many unknown questions regarding bridge integrity that need to be answered to ensure public safety,” the report found.

The Benicia-Martinez Rail Drawbridge, built in 1930 and tucked between the automobile spans, carries hazardous material shipments across the Carquinez Strait to East Bay refineries, along with 30 Amtrak Capitol Corridor passenger trains each weekday. The bridge is owned by Union Pacific and is safe, the company’s spokesman said.

“We regularly inspect all of our bridges in California,” said Union Pacific’s Aaron Hunt. “We perform necessary maintenance required to assure the safe use of our bridges. Bridges and culverts are a critical part of our 32,000-mile network.”

Union Pacific has spent more than $42 billion on infrastructure, Hunt said, not specifying what portion of that was devoted to bridges, including $4.1 billion scheduled for this year. “These are private investments, not taxpayer dollars,” he said.

However, the state report found many bridges are owned by smaller short-line railroads that “may not be willing or able to acquire the amount of capital needed to repair or replace degrading bridges.”

Crude by rail

Concern has grown about bridge safety and rail safety in general with the increase of crude oil shipments by rail. They’ve jumped 158 percent in California from just September to December 2013, according to the state energy commission.

This year, the CPUC created the Crude Oil Reconnaissance Team to monitor the oil-by-train boom to ensure federal and state safety laws are followed.

In June, federal rail chief Joseph Szabo spoke to an Indiana newspaper about the crude-by-rail boom: “The movement of this product is a game changer. We have to rethink everything we’ve done and known in the past about safety.”

In response to the increase and some deadly accidents, including a derailment last summer in Quebec, Canada, that killed 47 people, the U.S. Department of Transportation proposed tank car safety upgrades.

As of now, about 100 rail cars of crude roll through populated areas of the East Bay each week along the BNSF line from Stockton to Kinder Morgan’s rail depot in Richmond. The route traverses the 1,690-foot-long, 80-foot-high Muir Trestle, above Alhambra Avenue in Martinez. The trestle was constructed in 1899 and rebuilt 30 years later. Those rail cars rumble through Antioch, Pittsburg, Bay Point, Martinez, and Hercules, said Contra Costa Hazardous Materials chief Randy Sawyer.

Aging

Based on total track miles and federal estimates of a bridge occurring every 1.25 miles of track, the CPUC estimates there are about 5,000 California railroad bridges.

Most are old steel and timber structures built more than 100 years ago, and “actual railroad bridge plans or records are either absent or unreliable,” the CPUC report found.

“It’s part of the infrastructure that’s dilapidated, not only in California, but across the country,” Peesapati said. “Bridges are really an example of the problem.”

American Society of Civil Engineers past President Andy Herrmann, a bridge consultant, said companies balk at releasing bridge data for competitive reasons, but he believes bridges are maintained safely.

“There’s a very strong profit motive to keep the bridges open,” Herrmann said. “Detours will cost them a fortune.”

However, the 2007 Government Accountability Office report also found that “Because bridge and tunnel work is costly, railroads typically make other investments to improve mobility first.”

Are they safe?

In 1991, a freight train traversing steep switchbacks in Dunsmuir, Siskiyou County, derailed, sending rail cars tumbling off a bridge and resulting in 19,000 gallons of metam sodium, a concentrated herbicide, leaking into the upper Sacramento River. The accident killed all vegetation, fish and other aquatic animals 45 miles downstream, rendering some invertebrate species extinct. Several hundred people exposed to the contaminated water required medical treatment in what’s still considered the worst inland ecological disaster in the state.

Although the accident was not caused by bridge failure, it led the railroad to build a derailment barrier on the Cantara Loop bridge to prevent it happening again. And the Federal Railroad Administration expressed concern about the condition of bridges generally in a wide-ranging review after the crash.

“The review was prompted by the agency’s perception that the bridge population was aging, traffic density and loads were increasing on many routes, and the consequences of a bridge failure could be catastrophic,” according to a report published in 1991, the same year as the crash.

From 1982 to 2008, records show there were 58 train accidents nationwide caused by the structural failure of a railroad bridge, causing nine injuries and about $26.5 million in damages.

State hires

As of July 2010, new federal rules require rail companies prepare bridge management programs — including annual inspections, maintenance inventories and more — that are made available to federal inspectors when asked. The Federal Railroad Administration can levy fines up to $100,000 for failure to comply.

Federal inspectors audit railroad bridge inspections done by the companies and personally perform observations of 225 to 250 bridges each year. Based on those CPUC calculations, it would take the California inspector 20 years to visit and observe all of the state’s estimated 5,000 bridges, if that was all he had to do. But in reality, it would take much longer because California’s inspector splits his time among 11 states, leaving the CPUC to conclude in its 2013 report that the feds “cannot provide adequate oversight.”

That shortfall prompted state regulators to hire their own bridge inspectors, and they have already designed a bridge evaluation form and experimented with performing inspections.

“Railroad bridges carry thousands of cars of hazardous materials and thousands of passengers daily,” said CPUC spokesman Christopher Chow. “The Federal Railroad Administration (FRA) has new, general bridge regulations … but employs only five inspectors for the entire U.S. The CPUC’s bridge inspectors will be able to augment the FRA’s efforts.”

KPIX: Protesters Against Fracked Oil Deliveries Chain Themselves At Richmond Yard

Repost from CBS SF Bay Area, 5KPIX
[Editor: See this story also on Popular Resistance, the Richmond Standard, the San Francisco Bay Guardian and the Sacramento Bee.  – RS]

Protesters Against Fracked Oil Deliveries Chain Themselves At Richmond Yard

By Christin Ayers, September 5, 2014

RICHMOND (KPIX 5) — A dramatic showdown at a rail yard in Richmond on Thursday as protesters locked themselves to a gate to disrupt operations at the facility.

The yard is the only one in California that is bringing in 100-car trains full of potentially explosive fracked crude oil. Earlier this year, KPIX 5 was the first to uncover the operation.

A group of protesters chained themselves by the neck with bicycle locks to the gates of the Kinder Morgan rail terminal in Richmond.

“We are here to stop Kinder Morgan’s illegal activity here in Richmond, said Evan Buckner.

Their goal: To block tanker trucks from carrying explosive crude oil through their communities. It’s the same kind of shale oil from North Dakota that has caused deadly explosions in derailments in Canada and across the country.

“I will do everything I can to prevent that from happening,” said Katy Polony.

KPIX 5 discovered back in March that trains a hundred cars long are delivering the volatile loads to the rail yard every month, where it’s transferred onto trucks and driven to local refineries.

But nobody knew the trains were coming in because the operation never had to go through any kind of environmental review.

“They were granted a permit to bring in oil into this facility by the air district without any public process,” said Buckner, who belongs to an environmental group called ForestEthics.

Even Richmond’s Mayor Gayle McLaughlin said she was kept in the dark. “We hadn’t been aware of it in Richmond, but I am very grateful to Channel 5 for bringing this forward,” she said.

McLaughlin came by to show her support. “This has been a big issue in Richmond. I brought a resolution to the city council stating that we need to do whatever we can to stop these trucks from rolling on our streets,” the mayor said.

Police showed up in force, but did not move to make any arrests.

For three hours, the protesters blocked tanker trucks from leaving, then finally unchained themselves and left peacefully.

Because of our reporting, the environmental group Earth Justice has filed a lawsuit against Kinder Morgan and the Bay Area Air Quality Management District to try to force an environmental review. Kinder Morgan and the air district would like to see the suit dismissed. The first hearing in that case is Friday.

Richmond, California: Activists form human barricade to protest crude-by-rail facility

Repost from San Francisco Bay Guardian
[Editor: See this story also on Popular Resistance, the Richmond Standard. and the Sacramento Bee.  – RS]

Activists form human barricade to protest crude-by-rail facility

09.04.14 | Rebecca Bowe
PHOTO BY MATTHEW GERRING

This morning [Thu/4], at 7am in Richmond, Calif., four environmental activists used U-locks to fasten themselves by the neck to the fence of an oil shipping facility operated by Kinder Morgan.

They were interlocked with another four activists, who had their arms secured with handmade lock-boxes. “I’m locked to a lock box connected to my partner, Ann, who is locked with a U-lock to the fence,” Andre Soto, of Richmond-based Communities for a Better Environment, explained by phone a little after 8am.

At that time, Soto said several Richmond police officers had been dispatched to the scene and were calmly surveying the human barricade. He wondered out loud if they would be arrested.

The environmentalists risked arrest to prevent trucks from leaving the Kinder Morgan facility for area refineries with offloaded oil shipped in by train.

Crude-by-rail transport at Kinder Morgan’s bulk rail terminal, located in the Burlington Northern / Santa Fe railyard in Richmond, is the subject of a lawsuit filed in March by Earthjustice on behalf of the Sierra Club, Communities for a Better Environment, the National Resources Defense Council, and the Asian Pacific Environmental Network.

The suit, targeting Kinder Morgan as well as the Bay Area Air Quality Management District (BAAQMD), charges that Kinder Morgan was illegally awarded a permit for crude-by-rail operations without going through a formal environmental review process, which would have necessitated public hearings and community feedback. The case asks for operations to be halted while the project undergoes review under the California Environmental Quality Act. A hearing will be held in San Francisco Superior Court at 1:30pm tomorrow.

Ethan Buckner of Forest Ethics, who was also locked to the fence, said activists were especially concerned that the crude oil being shipped into Richmond, much of which originates in North Dakota, was volatile, presenting safety concerns.

“The oil trains are … very old tank cars that are subject to puncture, and have been known to fail over and over again while carrying oil,” Buckner said. Much of the oil shipped into the Richmond transfer point by rail originates from the Bakken shale region, which has been dramatically transformed by the controversial extraction method known as fracking.

“Nobody was notified that these oil trains were going to be rolling in,” Buckner said. That morning’s protest, he added, was meant to “send a clear message to Kinder Morgan and the Air District that if we can’t count on our public agencies to protect our communities, we’re going to do it ourselves.”

In the end, none of the activists were arrested. They voluntarily unlocked themselves from the fence and left the railyard around 10am. “After three hours we decided thsat we had made our point,” Eddie Scher of Forest Ethics said afterward, speaking by phone.

Along with a group of around ten others participating in the civil disobedience action, the activists who locked themselves to the fence were affiliated with Bay Area environmental organizations including 350 Bay Area, the Asian Pacific Environmental Network, the Sunflower Alliance, the Martinez Environmental Group, and Crocket Rodeo United to Defend the Environment.

Reached by phone, Ralph Borrmann, a spokesperson for BAAQMD, said, “We have no comment on the current litigation, or any actions relating to it.” He added that more information would come out during the Sept. 5 hearing.

When the Bay Guardian asked Kinder Morgan for a comment on the matter, spokesperson Richard Wheatley responded, “You’re not going to get one. We’re not going to comment on it.” Asked for a comment on the lawsuit, Wheatley said, “We’re not going to comment ahead of that hearing. And we’re not going to comment on the protesters.”