Wolk urges more regulation on rail crude oil shipments to Solano refinery
By Reporter Staff | 06/09/2014
The battle over local crude oil rail shipments moved to Sacramento late last week as Senator Lois Wolk, D-Solano, called on legislators Friday to support a proposal to strengthen the state’s railroad safety inspection force.
Wolk is seeking the inspection upgrade in light of the growing volume of crude oil shipments through heavily populated areas of California and numerous crude oil rail accidents in recent years.
In a letter sent in advance of today’s scheduled release of a draft Environmental Impact Report on a proposal to transport crude oil through the heart of the Capitol Corridor to the Valero Refining Company in the city of Benicia, Wolk laments a lack of increased regulatory oversight for such shipments. Rail shipments of crude oil in California like those proposed by Valero are slated to increase 25-fold in the next few years, according to the California Public Utilities Commission (PUC) and California Energy Commission.
“However, there has not been a corresponding increase in regulatory oversight capacity to address this significant increase in risk to California’s citizens,” Wolk wrote in the letter to members of the Legislature’s Budget Conference Committee, scheduled to hear Governor Edmund G. Brown’s budget proposal to add seven inspectors to the PUC’s railroad safety staff. “Additional oversight is needed to provide some assurance that these shipments are made safely and in compliance with federal and state regulations, as well as other known safety practices.”
Several destructive crude oil rail accidents have taken place in the U.S. and Canada in recent years, including the July 2013 derailment of 72 tanker cars loaded with 2 million gallons of flammable crude oil in Lac-Mégantic, Canada, that resulted in 47 deaths, more than $1 billion in damages, and 1.5 million gallons of spilled crude oil, Wolk noted.
Valero’s proposal has elicited concern from public and elected officials regarding the safety risks of transporting crude oil through Benicia and other densely populated areas of Northern California. Other concerns include the potential for increased commuter traffic.
“An event such as Lac Mégantic could have catastrophic effects if it occurred in any populated area of California,” Wolk said.
The Valero proposal seeks to add three rail tracks and an off-loading track on Valero’s property to allow crude oil to be transported into the refinery. Currently, crude oil is delivered into Valero Benicia through pipeline and ships.
During a meeting in Benicia earlier this spring, company officials said that the railroad addition would make the refinery more competitive by allowing it to process more discounted North American crude oil. They insisted that the railroad traffic up to 100 tank cars per day would not affect the region’s air quality, and safety standards would be met.
“It would not increase crude delivery, just make it more flexible,” John Hill, vice president and general manager of the refinery, told citizens at the meeting.
Another point of contention was the type of crude oil that would be transported into Benicia by rail.
An opposition group, Benicians for a Safe and Healthy Community, said the project will allow the delivery of the highly flammable Bakken crude from North Dakota. Concerns also have been raised about the possible use of Canadian tar sands oil, regarded as more polluting than other crudes.
However, officials said there will be no change in the delivered type of crude. They said the refinery can, and will be able to, handle any blend of crude oil as long as it meets density and sulfur requirements for its facility. They did not disqualify Bakken crude as a possible part of a blend.
Times-Herald, Vallejo staff contributed to this report.
First, 47 people were killed and a town flattened last summer when a crude oil-filled freight train exploded in Lac-Megantic, Quebec. Then, as residents mourned the death and destruction, the railroad at fault declared bankruptcy, leaving the Canadian government holding a nearly $3 billion bill.
The Canadian tragedy has helped fuel a national cry on this side of the border for greater scrutiny of what has become a boom in crude oil rail transport. Capital Region residents need look no farther than the continual ring of tanker cars around downtown Albany for reason to worry that a disaster could happen here, and to wonder: If it does, who will be held responsible?
As we wait for the White House’s release of new federal rules regarding the railroads themselves, state Assemblywoman Patricia Fahy, an Albany Democrat, has proposed that terminal operators also be required to have some responsibility in controlling this surge.
Since the Quebec disaster, at least eight significant accidents have occurred in North America, involving trains carrying either tar sands crude oil or Bakken crude oil, which is the source for the tankers bound for the Port of Albany. Ms. Fahy, pointing to the bankruptcy of the railroad company involved in the Lac-Megantic accident and the failure of its insurance to cover the billions in damage, suggests “terminal operators should put up enough financial security to cover expenses after something happens.”
That makes sense. In the same way General Electric is being held responsible to clean up PCBs from the Hudson River, the railroads and terminal operators profiting from crude oil transport should be required to invest in upgrades to safeguard against accidents, as well as surety for when an accident happens. This is a cost of doing dangerous business.
With Global Companies and Buckeye Partners seeing twofold increases in just a couple of years to 3 billion gallons of crude flowing through their terminals annually, and with railroad profits surging nearly 20 percent since 2009, these modern-day rail magnates can handle the expense.
Ms. Fahy’s bill would apply to all bulk storage facilities in the state that handle crude oil, and require financial security to meet all the responsibilities for cleanup and decontamination associated with any release of the oil.
She notes that, as freight railroads went from just 9,500 carloads of crude in 2008 to more than 434,000 carloads in 2013, the storage needs have increased accordingly.
According to the Times Union’s Brian Nearing, Lac-Megantic officials have estimated it will cost $2.7 billion to rebuild the shattered town, where more than 30 buildings were destroyed, and another $200 million to clean up oil-contaminated land, the sewer system and nearby bodies of water like the Chaudiere River.
We can’t let that happen here. Ms. Fahy’s bill is a step in the right direction.
Repost from DESMOGBLOG.COM [Editor: The map has some errors, but overall this is a great report and an important contribution in understanding the massive scope of the oil train boom. – RS]
Interactive Map and Report on Oil-By-Rail, “Booming Bomb Train Industry”
The report and interactive map of the “booming bomb train industry” capture the alarming scope of this very recent development. As the report points out, 70 times as much oil was moved by rail in 2014 as there was in 2005. That rapid expansion is continuing, placing more North American communities at risk.
“This analysis shows just how out of control the oil industry is in North America today. Regulators are unable to keep up with the industry’s expansion-at-any-cost mentality, and public safety is playing second fiddle to industry profits,” said Lorne Stockman, Research Director of Oil Change International and author of the report.
According to the report, Runaway Train: The Reckless Expansion of Crude By Rail in North America, approximately one million barrels of oil per day are moved on 135 trains of 100 cars or more each day in America. If all of the currently planned development of oil-by-rail facilities occurs, the full capacity to move oil would be five times that amount.
“This is what the All of the Above Energy Strategy looks like – a runaway train headed straight for North American communities,” Stockman said.
This massive investment by the oil and rail industries to expand their capacity to move oil by rail is one of the main reasons that improving oil-by-rail safety is unlikely when it comes to the unsafe DOT-111 tank cars. These cars currently make up approximately 70% of the oil-by-rail tank car fleet and there is currently a two to three year waiting list for companies wanting new tank cars.
The planned expansion of the oil-by-rail industry is simply impossible without the existing DOT-111 cars. In 2013 this point was made by an industry analyst:
“People who want to ship oil can’t get them,” Toby Kolstad, president of the consultant firm Rail Theory Forecasts LLC said. “They’re desperate to get anything to move crude oil.”
Without the oil-by-rail transportation option, the Bakken Shale oil would have no way to get to market. Despite the fact that the DOT-111 cars are inadequate and the Bakken crude is more explosive, the industry continues to rapidly expand with no new regulations.
The planned expansion of the industry and the current known capacity restraints help explain the recent public relations effort by the oil industry to dismiss any safety concerns.
Last week, the North Dakota Petroleum Council released a new study that said Bakken crude was “comparable in volatility to gas-rich oils from other shale formations in other regions.”
Which is true. However, in other regions, like the Eagle Ford formation in Texas, the natural gas liquids are stripped from that oil before being shipped by rail which greatly reduces the danger of explosion.
“As the standards are today for flammable liquids, Bakken crude fits right in, and the DOT-111 cars should be fine”
These claims are being made despite testimony by Robert Sumwalt of the National Transportation Safety Board calling the DOT-111’s an “unacceptable public risk” when used to transport Bakken crude.
Last week, the White House announced that the Pipeline and Hazardous Materials Safety Administration (PHMSA) will be proposing new oil-by-rail regulations in July. However, this will just be a proposal and the beginning of a likely contentious political battle about these regulations. No one expects any new regulations before 2015. Meanwhile, the industry continues its expansion plans.
In July, at the same time PHMSA is expected to announce its proposed new regulations for the oil-by-rail industry, activists across the country are planning a week of action. Starting on July 6th, the anniversary of the deadly explosion in Lac-Megantic, Quebec, the “Oil by Rail week of action” will highlight opposition to the shipping of oil by rail through communities and remember the victims of that first Bakken crude oil explosion.
In Lac-Megantic, there is little good news. The town is facing years of clean-up and reconstruction, and billions of dollars of expenses to deal with that disaster. Recently, Réjean Roy, whose daughter died in that accident, talked about the reality of Lac-Megantic’s current situation and their need to try to revive the town’s tourism industry.
“We need it for my town, because my town is dying. If we do nothing to attract tourists here, the town will die.”
A town will die. But the oil-by-rail industry is booming and regulations are not coming any time soon. It will take a huge public outcry to change that.
“Communities are already waking up to the dangers of oil trains barreling through their backyards, with spills, explosions and derailments happening all too often. This report and online tool will help provide the critical information that’s been sorely missing in order to shine a light on what’s really going on, and to help stop the runaway train of crude-by-rail in its tracks before more damage is done.”
Repost from the Bakersfield Californian [Editor: this is a MUST READ article, a comprehensive and graphic description of first-responder requirements and readiness. Someone needs to interview first responders in each of our Bay Area refinery towns, ask every single question referenced in this article, and lay out similar scenarios for the all-too-imaginable catastrophes that threaten our communities. – RS]
Increased oil train traffic raises potential for safety challenges
By John Cox, Californian staff writer | May 17, 2014
Bakersfield High School is seen in the background behind the rail cars that go through town as viewed from the overpass on Oak Street. By Casey Christie / The Californian
First responders think of the rail yard by Bakersfield High School when they envision the worst-case scenario in Kern County’s drive to become a major destination for Midwestern oil trains. If a derailment there punctures and ignites a string of tank cars, the fireball’s heat will be felt a mile away and flames will be a hundred feet high. Thick acrid black smoke will cover an area from downtown to Valley Plaza mall. Burning oil will flow through storm drains and sewers, possibly shooting flames up through manholes.
Some 3,000 BHS students and staff would have to be evacuated immediately. Depending on how many tank cars ignite, whole neighborhoods may have to be cleared, including patients and employees at 194-bed Mercy Hospital. State and county fire officials say local 911 call centers will be inundated, and overtaxed city and county firefighters, police and emergency medical services will have to call for help from neighboring counties and state agencies.
While the potential for such an accident has sparked urgency around the state and the country, it has attracted little notice locally — despite two ongoing oil car offloading projects that would push Kern from its current average of receiving a single mile-long oil train delivery about once a month, to one every six hours.
One project is Dallas-based Alon USA Energy Inc.’s proposed oil car offloading facility at the company’s Rosedale Highway refinery. The other is being developed near Taft by Plains All American Pipeline LP, based in Houston.
Kern’s two projects, and three others proposed around the state, would greatly reduce California’s thirst for foreign crude. State energy officials say the five projects should increase the amount of crude California gets by rail from less than 1 percent of the state’s supply last year to nearly a quarter by 2016.
But officials who have studied the BHS derailment scenario say more time and money should be invested in coordinated drills and additional equipment to prepare for what could be a uniquely difficult and potentially disastrous oil accident.
Bakersfield High Principal David Reese met late last year with representatives of Alon, which hopes to start bringing mile-long “unit trains” — two per day — through the rail yard near campus.
He said Alon’s people told him about plans for double-lined tank cars and other safety measures “to make me feel better” about the project. But he still worries.
“I told them, ‘You may assure me but I continue to be concerned about the safety of my students and staff with any new (rail) project that comes within the vicinity of the school,'” he said.
Alon declined to comment for this story.
Both projects aim to capitalize on the current price difference between light crude on the global market and Bakken Shale oil found in and around North Dakota. Thanks to the nation’s shale boom, the Midwest’s ability to produce oil has outpaced its capacity to transport it cheaper and more safely by pipeline. The resulting overabundance has depressed prices and prompted more train shipments.
There are no oil pipelines over the Rockies; rail is the next best mode of shipping oil to the West Coast. Kern County is viewed as an ideal place for offloading crude because of its oil infrastructure and experience with energy projects. Two facilities are proposed in Northern California, in Beniciaand Pittsburg; [emphasis added] the other would be to the south, in Wilmington.
A local refinery, Kern Oil & Refining Co., has accepted Bakken oil at its East Panama Lane plant since at least 2012. The California Energy Commission says Kern Oil receives one unit train every four to six weeks.
NATIONAL CHANGES
Shipments of Bakken present special safety concerns. The oil has been found to be highly volatile, and the common mode of transporting it — in quick-loading trains of 100 or more cars carrying more than 3 million gallons per shipment — rules out the traditional safety practice of placing an inert car as a buffer between two containing dangerous materials.
The dangers of shipping Bakken crude by unit train have been evident in several fiery derailments over the past year. One in July in Lac-Megantic, Quebec, Canada, killed 47 people and destroyed 30 buildings when a 74-car runaway train jumped the tracks at 63 mph.
The U.S. Department of Transportation said 99.9 percent of U.S. oil rail cars reached their destination without incident last year. Two of its divisions, the Federal Railroad Administration and the Pipeline and Hazardous Materials Safety Administration, have issued emergency orders, safety advisories and special inspections relating to oil car shipments. New rules on tank car standards and operational controls for “high-hazard flammable trains” are in the federal pipeline.
Locally operating companies Union Pacific Railroad Co. and BNSF Railway Co. signed an agreement with the DOT to voluntarily lower train speeds, have more frequent inspections, make new investments in brake technology and conduct additional first-responder training.
Until new federal rules take effect next year, railroads can only urge their customers to use tank cars meeting the higher standards.
“UP does not choose the tank car,” Union Pacific spokesman Aaron Hunt wrote in an email. “We encourage our shippers to retrofit or phase out older cars.”
The San Joaquin Valley Railroad Co., owned by Connecticut-based Genesee & Wyoming Inc., is a short line that carries Kern Oil’s oil shipments and would serve the Plains project but not Alon’s. A spokesman said SJVR is working with the larger railroads to upgrade its line, and the company inspects tracks ahead of every unit train arrival, among other measures designed just for oil shipments.
STATE LEVEL PROPOSALS
Gov. Jerry Brown has proposed a big change in the way California protects against and responds to oil spills.
His 2014-15 budget calls for $6.7 million in new spending on the state’s Oil Spill Prevention and Administration Fund to add 38 inland positions, a 15 percent staffing increase. Currently the agency focuses on ocean shipments, which have been the norm for out-of-state oil deliveries in California.
To help pay for the expansion, Brown wants to expand a 6.5 cent-per-barrel fee to not only marine terminals but all oil headed for California refineries.
“We’ll have a more robust response capability,” said Thomas Cullen, an administrator at the Office of Spill Prevention and Response, which is within the state Department of Fish and Wildlife.
A representative of the oil trade group Western States Petroleum Association criticized the proposal March 19 at a legislative joint hearing in Sacramento. Lobbyist Ed Manning said OSPR lacks inland reach, and that giving such responsibilities to an agency with primarily marine experience “doesn’t really respond to the problem.”
WSPA President Catherine Reheis-Boyd has emphasized the group has not taken a position on Brown’s OSPR proposal.
Also at the state capitol, Assemblyman Roger Dickinson, D-Sacramento, has forwarded legislation requiring railroads to give first responders more information about incoming oil shipments and publicly share spill contingency plans. The bill, AB 380, would also direct state grants toward local contingency planning and training. It is pending before the Senate Environmental Quality Committee.
LOCAL PREPARATIONS
In recent years Kern County has conducted large-scale, multi-agency emergency drills to prepare for an earthquake, disease outbreak and Isabella Dam break. There has not been a single oil spill drill.
Emergency service officials say that’s not as bad as it sounds because disasters share common actions — notification, evacuation, decontamination.
Nevertheless, State Fire and Rescue Chief Kim Zagaris, County Fire Chief Brian Marshall and Kern Emergency Services Manager Georgianna Armstrong support the idea of local oil spill drills involving public safety agencies, hospitals and others.
Kern County is well-versed at handling hazardous materials. Some local officials say an oil accident may actually be less dangerous than the release of toxic chemicals, which also travel through the county on a regular basis.
There have been recent accidents, but all were relatively minor.
Federal records list 18 oil or other hazardous material spills on Kern County railroads in the last 10 years. No one was injured; together the accidents caused $752,000 in property damage.
Most involved chemicals such as sodium hydroxide and hydrochloric acid. Only two resulted in crude oil spills, both in 2013 in the 93305 ZIP code in the city of Bakersfield. Together they spilled a little more than a gallon of oil.
But the risk of spills rises significantly as the volume of oil passing through the county grows.
“The volume is a big deal,” Bakersfield Fire Chief Douglas R. Greener said. “Potentially, if you have a train derail, you could see numerous cars of the same type of material leaking all at once.”
Kern County firefighters are better prepared for an oil spill than many other first responders around the state. They train on an actual oil tanker and have special tools to mend rail car punctures and gashes. The county fire department has several trucks carrying spray foam that suffocates industrial fires.
But Chief Marshall acknowledged a bad rail accident could strain the department’s resources.
He has been speaking with Alon about securing additional firefighting equipment and foam to ensure an appropriate response to any oil train derailment related to the company’s proposed offloading facility.
What comes of those talks is expected to be included in an upcoming environmental review of the project.
“We recognize the need to increase our industrial firefighting program,” Marshall said.
Chief Zagaris said Kern’s proximity to on-call emergency agencies in Tulare, Kings and Los Angeles counties may come in handy under the Bakersfield High spill scenario, which is based on fire officials’ assessments and reports from several similar incidents over the past year.
He and Marshall would not estimate how many people would require evacuation in the event of a disaster near the school, or what specific levels of emergency response might become necessary.
But Zagaris said local public safety officials would almost certainly require outside help to assess injuries, transfer people in need of medical care, secure the city and contain the spill itself.
“I look at it as, you know, depending what it is and where it happens will dictate how quickly” outside resources would have to be pulled in, he said.
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