Tag Archives: Lac-Mégantic

Bakken Crude, Crude By Rail, DOT-111, Emergency Readiness & Response, Federal Regulation (U.S.), Hazmat notification

Modesto Bee editorial: Tell us when dangerous oil cars are rolling

Repost from The Modesto Bee

Our View: Tell us when dangerous oil cars are rolling

August 9, 2014

Tank cars suitable for carrying Bakken crude oil sit on the BNSF railroad tracks that run through Escalon in May. The cars were empty, but left unattended for several days at a time. MIKE DUNBAR — mdunbar@modbee.com

Anyone who bothered to examine the 40 black, cylindrical railway tankers parked within 60 feet of a neighborhood in Escalon would have noticed a couple of markings. First was the red diamond-shaped placard with a flame on it; the other was the designation “DOT 111” in a grid stenciled on the tank.Those markings are what you find on tank cars used to carry the most dangerous liquids across America – including the volatile crude oil extracted from Bakken shale deposits in North Dakota.

A BNSF official said those unattended tank cars left on one of the double tracks in Escalon for a total of seven days over several weekends from April to June were empty. Unfortunately, no one in the community of 7,000 knew enough about them to bother to ask what was in them.

“I’m not aware of what was in those cars,” said Escalon Fire Chief Rick Mello, who commands a staff of nine full-time firefighters and a volunteer force of 16. Up to 50 trains go through Escalon each day, and BNSF never notifies Escalon about what is moving along its tracks – unless asked.

That must change, because it’s entirely likely we’ll see far more of those cars in the future. And they won’t always be empty.

California’s Office of Emergency Services estimates shipments of Bakken crude will increase 25-fold by 2016 as 150 million barrels move to California’s refineries in the Bay Area, Southern California and eventually Bakersfield. Since all Bakken crude moves by rail, that could mean another 225,000 tank cars a year moving through Roseville, Sacramento, Modesto, Merced and beyond. Mother Jones magazine calls it a “virtual pipeline.”

The Wall Street Journal reported Bakken crude contains higher amounts of butane, ethane and propane than other crudes, making it too volatile for most actual pipelines. Those gases have contributed to the deaths of 47 people in the town of Lac-Megantic in Canada, where a train carrying Bakken crude derailed in July 2013 and exploded. Less dramatic derailments, some with fires, have occurred in North Dakota, Virginia and Illinois. The U.S. Department of Transportation reports 108 crude spills last year.

“When you look at the lines of travel from Canada and North Dakota, you figure if they’re headed for the Bay Area or to Bakersfield, the odds are that you’re going to see shipments going down the Valley,” said Assemblyman Roger Dickinson, who represents north Sacramento. That’s why he authored Assembly Bill 380, which would require the railroads to notify area first-responders whenever these trains are passing through.

But the nation’s railroads are largely impervious to local concerns; they’re governed by the U.S. Department of Transportation and they’re powerful.

In July, the DOT issued proposed new rules for safe transport, including increased cargo sampling, better route analysis, a 40 mph speed limit on trains labeled “high-hazard flammable,” and switching to the new, safer DOT 111 cars after Oct. 1, 2015. The new cars have double steel walls, better closures and heavier carriages. Currently, they make up about a third of the nation’s tanker fleet.

California’s Office of Emergency Services has issued 12 recommendations, ranging from allowing better data collection to phasing out those old tank cars to better training for first-responders.

Laudably, the railroads are already doing most of these things. Since the mid-1990s, BNSF has offered – at no charge – training for handling spilled hazardous materials and dealing with emergencies. One of Escalon’s eight full-time firefighters was trained at virtually no cost to the city. BNSF said they would even do on-site training for departments. But not every fire department has taken the courses. A BNSF spokeswoman said Sacramento sent only one firefighter to the most recent three-day training on dealing with hazardous materials, including Bakken crude.

The federal DOT issued an emergency order in May to require all carriers to inform first responders about crude oil being shipped through their towns and for the immediate development of plans to handle oil spills. Unfortunately, it contains a discomforting criteria: the order applies only to trains carrying 1 million gallons of Bakken crude, or roughly 35 tank cars. And to reach DOT’s definition of a “high-hazard flammable train,” a train must have 20 tank cars.

But a Bakken explosion in Virginia blew one tank car an estimated 5,500 feet; a photograph of another explosion showed a fireball rising 700 feet from a single car. Our first responders ought to know when even one car carrying such material is coming through.

Dickinson’s bill would make notification available on a real-time basis, without having to ask. His goal, said Dickinson, is to “give first responders better information on how to respond. The techniques and materials used in dealing with different chemicals, or even different types of oil, vary widely. ‘I know I’m dealing with oil, but what kind of oil?’ My bill is aimed at getting better, more timely, more complete information to responding agencies.”

But his bill mirrors federal orders on the size of the train; our first responders need to know when any hazardous shipment is moving through.

The incredible expansion of America’s oil resources is creating many positives – from more jobs to less dependence on foreign oil. But it’s happening so fast that we’re devising the safety aspects as we roll along this virtual pipeline from North Dakota to California in the west and to New Jersey in the east. Accidents are happening along the way. Federal rules don’t go nearly far enough to protect public safety in this new world. Dickinson’s bill and the state OES recommendations would help, but we need a broader dialogue. As Dickinson said, “we know we’re going to have derailments, no matter how careful people try to be.”

That’s why first-responders such as Escalon’s Chief Mello must “prepare for anything, any day.” Knowing what’s coming gives us a head start.

Crude By Rail, Emergency Readiness & Response, Federal Regulation (U.S.), Insurance Industry, Rail industry

DOT: Rail insurance inadequate for oil train accidents

Repost from Politico
[Editor: Significant quote: “For ‘higher-consequence events’ — such as the one in Lac-Mégantic — ‘it appears that no amount of coverage is adequate,’ the analysis says. That’s because the maximum amount of coverage available on the market is $1 billion per carrier, per incident….’You should know the railroads are used to running bare — without adequate insurance,’ said Fred Millar, an independent rail consultant who has criticized the government’s oversight of oil trains.”  – RS]

DOT: Rail insurance inadequate for oil train accidents

By Kathryn A. Wolfe | 8/6/14
Several CSX tanker cars carrying crude oil in flames after derailing in downtown Lynchburg, Va. | AP Photo
The maximum amount of coverage available is $1 billion per carrier, per incident. | AP Photo

Most freight railroad insurance policies couldn’t begin to cover damage from a moderate oil train accident, much less a major disaster. And the Department of Transportation’s own database of oil train incidents is flawed because some railroads and shippers provide incomplete information that far understates property damage.

Those conclusions come from a DOT analysis of its own rule proposed to address the series of troubling derailments across North America as shipments of oil by rail surge.

The department issued the analysis Aug. 1, the same day it published its proposed oil train safety rule that is meant to create what Transportation Secretary Anthony Foxx calls a “New World Order” in oil trains regulations, including by requiring sturdier tank cars, tightened speed limits and improved brakes for the trains carrying an ever-greater amount of crude oil through communities from Southern California to Albany, N.Y.

The rule would not expressly address the insurance issue, except to cite the general liability landscape as part of the need for the rule, which seeks to prevent the worst disasters from happening and mitigate damages from those that do.

Gaps in insurance coverage became an issue after the July 2013 disaster in Lac-Mégantic, Quebec, which occurred when a train that had been left unattended careened down an incline, derailed and charred much of the downtown area, killing 47 people. The damages from that wreck could stretch into the billions of dollars, but the railroad responsible for the derailment carried only $25 million of insurance and wound up declaring bankruptcy.

DOT’s analysis says most of the largest railroads commonly carry around $25 million in insurance, though that can rise to as much as $50 million for trains hauling certain kinds of hazardous chemicals. Smaller railroads — such as the one in the Lac-Mégantic disaster — often carry much less than that.

But the agency’s Pipeline and Hazardous Materials Safety Administration estimated that the average derailment that spills crude oil will mean $25 million in total costs — bumping up against most of even the largest railroads’ current insurance limits.

For “higher-consequence events” — such as the one in Lac-Mégantic — “it appears that no amount of coverage is adequate,” the analysis says. That’s because the maximum amount of coverage available on the market is $1 billion per carrier, per incident.

“You should know the railroads are used to running bare — without adequate insurance,” said Fred Millar, an independent rail consultant who has criticized the government’s oversight of oil trains. “And the situation that is described in the [analysis] from Lac-Mégantic is only just the tip of the iceberg. The railroads basically know that they have cargoes that can cause massive, enormously greater death and destruction than what happened in Lac-Mégantic.”

Devorah Ancel, an attorney for the Sierra Club, said insurance coverage “needs to catch up with the heightened risk that is part of this industry now,” because otherwise “taxpayers end up covering it.”

The Association of American Railroads declined to comment, saying the group is still reviewing the pending rule and its supporting documents, including the regulatory analysis, and the American Petroleum Institute said it would file its comments as part of the public comment period.

“We are working closely with regulators and the rail industry in a comprehensive effort to enhance safety through accident prevention, mitigation and response,” API said.

But railroads know they’re underinsured and have groused about the status quo, particularly considering the fact that energy companies that ship oil and ethanol largely do not bear any liability for an incident once their product is loaded onto a train. And under “common carrier” regulations, railroads cannot refuse a shipment any kind of material assuming it meets proper regulations.

Warren Buffett’s BNSF railroad, the pioneer in the oil train industry, has been requesting that railroads get some of the same protections now afforded to the nuclear power industry, using the Price-Anderson Act as a model. That law requires power companies to contribute to an insurance fund that would be used in the event of an accident, and it also partially indemnifies the nuclear power industry.

The DOT analysis also points to a systemic weakness in the way the federal government collects data on derailments of crude oil and ethanol trains. In the section dealing with the probability of major rail accidents, the analysis observes that it’s “impossible to isolate the derailment rate of only crude oil and ethanol trains” due to “limitations in the reported data.”

That’s because PHMSA requires an incident report to be filed only if the incident led to the release of a hazardous material — so derailments that did not result in a spill aren’t included. As a result, even some dramatic accidents aren’t included in the database — for instance, one earlier this year that resulted in a crude oil train dangling over Philadelphia’s Schuylkill River.

Separately, DOT’s Federal Railroad Administration maintains data on derailments, including how much hazardous material was released — but doesn’t identify what type of substance it was. “As a result, it is impossible to use FRA data to identify crude and ethanol derailments,” the department said.

And the data that is reported, particularly to PHMSA, is often inaccurate, largely because it is self-reported by railroads or shippers, according to the analysis. And these self-reports often underestimate the damages done in spill incidents.

According to the analysis, damage information reported to PHMSA is typically “only the most basic costs” such as the value of spilled petroleum and damage to tracks and cars.

“PHMSA believes that response costs and basic cleanup costs, when they are reported, do not represent the full costs of an accident of the response,” the report said.

Underreporting damages, particularly for environmental cleanup costs, ends up hiding the true impact of a spill from policymakers, Sierra Club’s Ancel said. She hopes the pending rule will address the issue.

“It is extremely important that the industry is required to adequately report — and there should be some sort of mechanism in the rule where the agency has inspectors that are ensuring that they are,” she said. “So not only should the industry be on the hook for reporting, but the agency needs to be able to have the resources to ensure that they are.”

Bakken Crude, Crude By Rail, DEIR, Derailment, DOT-111, Explosion, Valero Benicia Refinery

Sacramento leaders: Risk of oil train explosions must be acknowledged

Repost from The Sacramento Bee

Sacramento leaders: Risk of oil train explosions needs to be acknowledged

By Tony Bizjak, Aug. 5, 2014
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An oil train derailment and explosion in Quebec last July prompted Canadian officials to impose tougher safety regulations. | Paul Chiasson / AP/Canadian Press

Sacramento area leaders say the city of Benicia is failing to acknowledge the risks of explosions and fires that could happen if the Bay Area city approves Valero’s plan to run crude oil trains through Northern California to its refinery.

The accusation, in a draft letter released Tuesday by the Sacramento Area Council of Governments, comes in response to a Benicia report that said twice-daily rail shipments of 70,000 barrels of crude will pose no significant threat to cities on the rail line, such as Roseville, Sacramento and Davis.

The Sacramento group is calling that finding “fundamentally flawed,” and points out that the federal government issued an emergency order in May saying new volatile crude oil shipments are an “imminent hazard” along rail lines.

“I don’t know how you can conclude there is not a significant hazard,” said Kirk Trost, an attorney for SACOG, a planning agency of the region’s six counties and 22 cities. “The (environmental report) never looks at the risk of fire and explosion in one of these situations.”

Trost said the letter has not yet been endorsed by the SACOG, but was written by SACOG staff in consultation with regional leaders.

It urges Benicia to redo its analysis and provide a clearer picture of the risks the project imposes on up-rail cities. It also says the project, proposed by Valero Refining Co., should not be approved without new funding to train firefighters to deal with oil spills and for rail safety improvements.

It also calls for limits on the amount of time crude oil tank cars are stopped or stored in cities. “Our view is they should not be stored in any of our communities along the line,” Trost said.

Valero, which receives most oil at its Benicia refinery via ship, plans to begin taking deliveries by train from various sites in North America, including potentially from the Bakken fields of North Dakota. Bakken trains have been involved in several recent explosive fires, including a derailment in the Canadian town of Lac-Megantic that killed 47 residents. Federal officials said last month that studies show Bakken oil is more volatile than other crude oils. The oil industry disputes that assertion.

The Benicia report concluded that an oil spill between Roseville and Benicia can be expected to happen once every 111 years. It acknowledges “if a release in an urban area were to ignite and/or explode, depending on the specific circumstances, the release could result in property damage and/or injury and/or loss of life,” but doesn’t expand on that statement. Instead, it says rail transport is becoming safer.

The SACOG letter challenges the once-in-111-years figure, noting it was calculated using data from 2005 to 2009, and disregards a dramatic surge in crude oil rail spills and fires in the last two years. Benicia city planners did not respond to a Bee request for comment.

Benicia’s analysis stops at Roseville. Several local officials, including Plumas County supervisor Kevin Goss, say they want it to include likely routes to the north and east, including the Feather River Canyon and the Dunsmuir areas, both of which have been designated by the state as high-hazard areas for train derailments.

“I think it should be studied all the way out to where (the shipments) originate,” Goss said.

Benicia officials have said they did not study beyond Roseville because they do not know which route crude oil trains might take beyond that point.

Several attorneys, unassociated with the case, say state environmental law lays out what cities should study, but has gray areas.

Environmental law attorney Andrea Matarazzo, a partner with the Pioneer Law Group in Sacramento, says case law makes it clear that a city can’t draw a line around its project and study only local impacts. But she said the city can make a judgment call on where to stop, if it has a reasonable explanation.

Another environmental law attorney, Jim Moose, partner at Remy, Moose, Manley in Sacramento, said that CEQA does not require a city to look at the “Armageddon” or worst-case scenario, but cities are obligated to look at reasonably foreseeable impacts. “It seems to me a good EIR would lay out the consequences and not just say the probability of it, especially since the time frame in question is not all that long” from a legal perspective. “But it is a gray area of the law.”

SACOG attorney Trost said the draft letter will be reviewed by the SACOG board later this month. Benicia has set a Sept. 15 deadline for receiving comments and questions to its environmental analysis. Yolo County sent Benicia a similar complaint letter last month.

Bakken Crude, Crude By Rail, DOT-111, Tank car identification

Oil industry recommends: use “highest-danger” labeling on bakken oil tank cars

Repost from Reuters
[Editor: The oil industry recommends highest-danger labeling on Bakken crude oil tank cars despite its misleading claim that Bakken is no different from other light sweet crudes.  This stance puts pressure on the rail industry to come up with stronger tank cars sooner.  Um… follow the money?  – RS]

Oil group wants highest-danger label for Bakken rail shipments

New York, Aug 5, 2014

Aug 5 (Reuters) – A U.S. oil industry group is recommending that all crude shipped by rail from North Dakota’s Bakken fields be labeled as the most-dangerous type of oil cargo, a designation that could hasten the use of new or upgraded tank cars.

On Monday, the North Dakota Petroleum Council (NDPC) released the final results of a wide-scale study on the quality characteristics of Bakken crude, which has been involved in several fiery oil-train derailments over the past year.

The study confirmed preliminary findings released in May suggesting that Bakken was little different from other forms of light, sweet U.S. crude and posed no greater threat versus other fuels when transported by rail.

The NDPC also issued a series of recommendations following the study, however, including one urging oil-by-rail shippers to classify all Bakken crude oil as “Packing Group I” hazardous materials.

That is the highest-risk level of a three-tiered danger assessment, and the NDPC said it was recommended “even though the majority of samples tested for the study would fall within specifications for PG (Packing Group) II.”

Current methods for testing boiling point, the key criteria for differentiating PG I and II classifications, can be inconsistent, the NDPC said. Because it typically contains a high proportion of very light hydrocarbons and petroleum gases, Bakken crude tends to boil at lower temperatures.

“The margin of error for the test methodology can result in different labs testing the same sample with values meeting both PGs. PG I has the more stringent standards and is therefore recommended to avoid further confusion,” said the NDPC report, which was prepared by industry consultants Turner, Mason & Co.

Historically the Packing Group label has made no material difference in how oil is handled on trains; its only purpose was to inform emergency responders about the cargo. The DOT-111 tank car, the model used almost exclusively to ship oil by rail, is able to transport any Packing Group. Many oil companies have been using PG I routinely simply to ensure they were compliant.

But under new regulations proposed last month by the U.S. Department of Transportation, the Packing Group determination could become a pivotal factor in determining how quickly shippers use new or upgraded tank cars that will gradually replace older-model DOT-111s long seen as flawed.

The NDPC represents major producers in the Bakken including Marathon Oil Corp, ConocoPhillips, Continental Resources and Hess.

Authorities had already begun to crack down on misclassified oil shipments after the Lac Megantic tragedy in Canada last year, when a runaway oil-train with cargo from the Bakken energy patch derailed and killed 47 people in the center of a Quebec town.

In February, the DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) fined three companies for using incorrect Packing Group labels for their Bakken cargoes. Two of them had mislabeled shipments as PG II, when in fact they should have been labeled PG I. A third company had used a PG III label rather than PG II.

The DOT rules last month said older model DOT-111 cars would not be allowed to carry Packing Group I crudes within two years, while less dangerous crudes that fall into PGs II and III could still be shipped in the older cars for three and five years.

The rules are open to public comment and may not be finalized for several months.

[Editor: To send a comment, see Two-month comment period starts for new federal oil train rules. -RS]

In its own study released last month, the PHMSA said most crude from the Bakken tested as PG I or II material – “with a predominance to PG I”. It also said the oil was “more volatile than most other types of crude,” a finding disputed by both the American Petroleum Institute and NDPC.

(Reporting by Jonathan Leff; Editing by Tom Brown)