Tag Archives: Massive increase in crude-by-rail

THE BASICS: Why oil trains (don’t have to) explode: Everything you need to know

Repost from The Oregonian

Why oil trains (don’t have to) explode: Everything you need to know

By Rob Davis | April 02, 2015 at 1:22 PM
Oil Train Derailment Illinois
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.

California Crude Trains: How Much Oil Is Actually Coming In and Where Is It Coming From?

Repost from North American Shale Blog
[Editor: Notwithstanding the disparaging remarks about crude-by-rail opponents and politics in California, this is an interesting report by a pro-industry analyst.  – RS]

California Crude Trains: How Much Oil Is Actually Coming In and Where Is It Coming From?

California has become ground zero for legal opposition to crude-by-rail projects. Opponents decry derailments, toxic vapors, and other ills.[i]  Yet despite the dire images painted by crude-by-rail’s opponents, the reality on the ground in California has been quite mundane thus far. The high-water mark to date for California railborne crude supplies was approximately 39 thousand barrels of oil per day (kbd) in December 2013 (Exhibit 1).

To put this number in perspective, California refineries typically process an average of around 1.7 million barrels per day of crude – meaning that at the crude-by-rail peak, only about one barrel in 50 of the state’s crude supply came in by rail.[ii]  Presently, the number is closer to one barrel in 100 – certainly not the overwhelming flood of trains opponents fear. And to that point, even supplying one-quarter of California’s total crude oil needs would only require about six to seven crude oil unit trains per day. To put this in context, the Colton Crossing east of Los Angeles by itself can see more than 100 freight trains per day.[iii]

Exhibit 1: California Crude by Rail Sources

exhibit 1
Source: California Energy Commission, Alberta Office of Statistics and Information

Where California’s Railborne Oil Imports Come From

For much of the past six years, light, low-sulfur Bakken crude and heavier, higher-sulfur Western Canadian Select (“WCS”) dominated rail imports into California. Canadian supplies show a clear correlation with how cheap WCS is relative to Maya, a heavy crude oil from Mexico that is shipped by tanker and offers a proxy for what heavy, sour, waterborne crude oil imports into California will cost. The spread between WCS and Maya prices matters because it only makes sense for refiners to purchase WCS barrels if they are sufficiently discounted that the buyer still comes out ahead after adjusting for rail transport costs, which can amount to approximately $20/barrel for manifest trains and $15/barrel for oil moved on unit trains.[iv]

For reference, “manifest trains” are mixed cargo trains where a 100-car freight train might include 20 or 30 tanker cars carrying oil. Unit trains, on the other hand, carry only one type of freight, meaning that all 100 to 120 cars carry crude oil. This maximizes economies of scale and significantly reduces transportation costs. Shipments of Canadian crude oil into California traditionally rode on manifest trains, but in November 2014, Union Pacific brought its first unit train of crude oil from Western Canada into California, to a terminal near Bakersfield.[v] The route is currently dormant as WCS crude’s discount to Maya was less than $10 per barrel in January 2015, according to official price data, making it uneconomical to import the Canadian oil by rail.[vi] Unit trains’ lower costs relative to the previously used manifest trains will likely have oil trains rolling from Alberta to California once again if the WCS discount widens to around $15 per barrel.

California has also seen increased supplies of light, low-sulfur crude oil from New Mexico in recent months. The most likely explanation for this is that continued strong oil production in Texas, New Mexico, and the Midcontinent are inundating the Gulf Coast with light, sweet barrels. Indeed, this author’s models using official Energy Information Administration data strongly suggest that Gulf Coast refineries have hit a physical “wall” where they are not able to sustainably use more than 65 percent domestic crude oil to supply their plants, because facilities designed for heavier, higher-sulfur oils cannot run at maximal efficiency with light, low-sulfur crude feedstocks.[vii] This crowded market reduces the potential realized value of crude to certain Permian Basin producers and makes California attractive as a clearing destination because crude can be railed from the Permian Basin to California for as little as $7-8/bbl, according to Tesoro.[viii]

What the Future May Hold

The bottom line is that California’s existing crude-by-rail terminal capacity is massively underutilized at present. The state’s two largest facilities alone – Kinder Morgan’s terminal at Richmond and new terminal near Bakersfield – can offload more than 140 kbd at full capacity. In comparison, crude-by-rail import volumes were less than 20 kbd in December 2014, the last month for which data are available (Exhibit 2). 

Exhibit 2: California Crude by Rail Capacity vs. Actual Import Volumes

exhibit 2
Source: California Energy Commission, Company Reports

Current terminal capacity is sufficient for approximately two unit trains per day of crude – 140 to 150 kbd – to enter the state. California’s fickle politics make forecasting crude-by-rail volumes a tough exercise. That said, this author believes that if oil prices recover to at least $75/bbl, California’s railborne crude imports will likely exceed 200 kbd by early 2016. Under those conditions, existing terminals would increase their capacity utilization and larger price differentials would attract additional Canadian heavy crude, as well as Bakken and other light, sweet grades from the Rocky Mountain states and the Permian.


[i] “GROUPS SUE TO STOP DAILY 100-CAR TRAIN DELIVERIES OF TOXIC CRUDE OIL TO BAKERSFIELD TERMINAL,” Earthjustice, January 29, 2015, http://earthjustice.org/news/press/2015/groups-sue-to-stop-daily-100-car-train-deliveries-of-toxic-crude-oil-to-bakersfield-terminal; See also Alexander Obrecht, “Environmental Groups Ramp Up the Crude-by-Rail Fight in the Courtroom,” BakerHostetler North America Shale Blog, October 6, 2014, http://www.northamericashaleblog.com/2014/10/06/environmental-groups-ramp-up-the-crude-by-rail-fight-in-the-courtroom/
[ii] “FACTBOX – California crude sources and oil-by-rail projects,” Reuters, July 21, 2014, http://af.reuters.com/article/energyOilNews/idAFL2N0PM26S20140721
[iii] “Colton Flyover Supports L.A.-Area Business,” Union Pacific Railroad, September 5, 2013, http://www.uprr.com/newsinfo/community_ties/2013/september/0905_colton.shtml
[iv]Yadullah Hussein, “Oil-by-rail economics suffers amid narrowing spreads,” Financial Post, February 9, 2015, http://business.financialpost.com/2015/02/09/oil-by-rail-economics-suffers-amid-narrowing-spreads/?__lsa=c711-5acd
[v] Bruce Kelly, “UP begins Canada-to-California CBR service,” Railway Age, November 25, 2014, http://www.railwayage.com/index.php/tag/CBR/feed.html
[vi] “Heavy Crude Oil Reference Prices, Monthly,” Alberta Office of Statistics and Information, https://osi.alberta.ca/osi-content/Pages/OfficialStatistic.aspx?ipid=941 (last accessed March 18, 2015)
[vii] Detailed explanation of models available; please contact author at gcollins @ bakerlaw.com.
[viii] Company investor presentation, September 2014, “Rail Costs to Clear Bakken,” slide 11, http://phx.corporate-ir.net/phoenix.zhtml?c=79122&p=irol-presentations

Federal Railroad Administrator on newer tank car: “It’s a Pinto with a better bumper instead of just a Pinto”

Repost from PRI’s Living On Earth, Environmental News Magazine
[Editor:  An important interview.  See full transcript below and good links below the transcript.  Click here for audio.  – RS]

Oil Train Safety Off Track

Steve Curwood, Air Date: Week of March 20, 2015
Five oil train derailments in five weeks–some with dangerous fiery consequences. (Photo: Wikimedia Commons)

In the past five weeks, there have been 5 oil train derailments resulting in large fireballs, and more oil was spilled in 2014 than in the last 38 years combined. Steve Kretzmann, Director and Founder of Oil Change International, and Sarah Feinberg, Acting Administrator of the Federal Railroad Administration, discuss rail safety with host Steve Curwood and offer different solutions to this multifaceted problem.

Transcript

CURWOOD: From the Jennifer and Ted Stanley Studios in Boston and PRI, this is Living on Earth. I’m Steve Curwood. At 12 million barrels a day, the US is the world’s leading oil producer, with much of the boost due to fracking technology. With pipelines at capacity the boom has led a 4,000 percent increase in the volume of crude oil that travels by rail, and that brought more accidents and more oil spills in 2014 than over the previous 38 years. Just these past five weeks brought five more derailments, with huge fires and polluted waterways, and some critics say new rail safety rules on the drawing boards won’t go far enough to protect the public or the environment. Steve Kretzmann is Executive Director and Founder of Oil Change International. Welcome to Living on Earth, Steve.

KRETZMANN: Thanks so much for having me here, Steve. It’s great to be back.

CURWOOD: Now, what we are seeing is a lot of crashes and explosions. What’s happening?

KRETZMANN: So we’re seeing, unfortunately, a very visible result of the ‘all of above’ energy policy, playing out with great risks to our communities around North America on a whole. The Bakken oil is very light oil, and it’s very explosive, it turns out, and people have known this, but it hasn’t really stopped them from shipping it via rail. And it’s also worth noting that because that oil is light oil, that’s mixed in with tar sands to form diluted bitumen, which is usually the way tar sands get to market, we’re also seeing tar sands trains now explode, and so they’re just trying to get as much out as fast as they can and maximize their profit. And as we know, the oil market is flooded with crude now and effectively we’re subsidizing that with our safety in our communities and our lives.

CURWOOD: Now, in Texas where there’s a fair amount of fracking for oil, there are machines that remove the most volatile portion, the most explosive part of fracked oil before it is shipped, but in North Dakota it is not. Why this discrepancy? Why don’t they make this safety precaution in North Dakota?

KRETZMANN: Well, it’s about profit, it’s about investment and infrastructure by the industry, so the production in Texas is very close to markets and so when they invest in the infrastructure to remove the lighter petroleum product – natural gas among other things – they can then sell that oil because they can put in the pipelines. On the other hand, North Dakota does not have those gas pipelines and the infrastructure is not there to capture it and so their options are burn it or try to force it into the tank car, which is what they’re doing. There are new regulations that are supposed to take effect from North Dakota that will reduce the amount that they can squeeze in there on a regular basis, but it’s not clear that the regulation is in line with what will actually create a safe car. It’s just slightly less than they’ve been able to get away with.

Older DOT 111 cars usually do not fair well in crashes, even at low speeds. (Photo: Robert Taylor; Flickr Wikimedia Commons CC BY 2.0)

CURWOOD: Talk to me about the new tanker safety rules and how effective they might be in preventing the kind of explosions we’ve seen on oil train derailments.

KRETZMANN: So it’s not clear what the new rules are going to be. There are the North Dakota rules which are a slight reduction in vapor pressure, and then there are the federal rules, which are under consideration by the Obama administration, and we’re going to see another draft of those supposedly within the next month. But there are very different options that they can take. They could build thicker-walled oiled trains, they could require that, but the oil industry doesn’t like that because it costs them more money. They could install electronically controlled pneumatic brakes on the railcars, but the rail industry doesn’t like that because it costs them too much money. One of the most effective things they could do is introduce a very serious speed limit. The DOT 111s, the old cars, still make up the majority of the crude by rail fleet; they’ve been shown to explode at seven miles an hour. The 1232s, which are the newer supposedly safer cars, but are the ones that have been involved in each one of these accidents recently, have been shown to explode at 15 miles an hour. So, we say you should put in serious restrictions here: all new cars, speed limits at 15 or below, particularly in populated areas. You know the industry gets very upset about that and says, “oh my God, that would mean we would have to stop production”. And you know, the point is “yes”, maybe actually reducing some production in the name of public safety is worth it here.

Steve Kretzmann is the Founder and Executive Director of Oil Change International. (Photo: courtesy of Mr. Kretzmann)

CURWOOD: So you mentioned that communities are at risk from these crude oil trains. What ones come to mind for you?

KRETZMANN: So when you look at the map of where crude oil trains are going around the United States, it’s very clear you start looking at the routes: Minneapolis, Chicago, St. Louis, New York, Philadelphia, Cleveland, Detroit. All these cities have crude by rail trains, these bomb trains running right through them. 25 million Americans live within the blast zone here and it’s sadly not a question of if but when one of these explosions is going to result in a tremendous tragedy. We have the opportunity to slow this down and put a moratorium in place before this happens and we should take it.

CURWOOD: That was Steve Kretzmann of Oil Change International. Well, a moratorium on oil transport by rail is unlikely, and the Obama Administration has yet to issue new rules, even after two years of work. So in the face of the recent accidents it’s issued some emergency rules and here to explain is Sarah Feinberg the Acting Administrator for the Federal Railroad Administration. Welcome to the program.

FEINBERG: Thank you for having me.

CURWOOD: So what do you have in place now in terms of emergency regulations then, emergency rules?

FEINBERG: Well, we have a lot. We have a requirement of railroads to share information about the product that’s being transported with emergency responders in each state. We have an emergency order that’s in place regarding testing and making sure that the right tank car and right packaging is being used for each product. Over the course of a year and a half that I’ve worked on this issue, we were enforcing against violations for not testing the product properly, not packing it in the right container, not handling it the right way, not sharing information about it. I’m not saying things are in a good place now, they certainly aren’t. We’ve got a long way to go, but when I think back to where we were a year and a half ago, it’s amazing to me we’re actually having a conversation about testing then.

A DOT-111 tank car with an insulating jacket and external heating coils can hold 20,000 gallons of crude. (Photo: National Transportation Safety Board; Wikimedia Commons)

CURWOOD: Now, not long ago there was a dramatic explosive derailment in West Virginia that involved the new kinds of cars, the supposedly safer cars, and some folks are saying that apparently having those cars aren’t safe enough. What you say?

FEINBERG: Well, it’s really important to understand the different kinds of cars that are out there. The one we hear about a lot is the DOT 111. That is the older tank car; I think everyone agrees across the board that tank car is certainly outdated. It’s not safe enough to hold this product or others. Industry on its own a few years ago came up with their own version of a tank car that’s called the 1232. While it is a better tank car, and it’s a newer version of a tank car, one person on my team once referred to the 1232 as the .111 with a five-mile per hour bumper on it. So it’s a Pinto with a better bumper instead of just a Pinto. The other most important thing to think about is that all 1232s are not the same. They didn’t have all the safety components that they could have had. They didn’t have a jacket; they didn’t have a thermal shield. These are important components to keep a tank car from basically experiencing the thermal events that create fireballs.

CURWOOD: No matter what kind of car it is, they’re going off the rails. Some folks say that the trains are just simply traveling too fast.

FEINBERG: Look, I mean speed should be a factor, but the reality of is that in all of these derailments, they’ve been very low speed. In fact, the agreements that we have in place with the railroads limit speed at 40 miles an hour. We’re now in a position where we’ve got railroads functioning below the maximum speed and we are still running into problems. There is not a tank car at this moment or even the new version of the tank car we’ve proposed that will survive a derailment above, say, 16 or 18 miles an hour. So that’s one of the reasons why this issue is so complicated. There is literally not a silver bullet. It’s not speed, it’s not a particular tank car, its not the way the train is operated. It’s all of the above and it needs to include, frankly, the product itself that’s being placed in the transport, the product that’s leaving the Bakken and heading to the refinery.

CURWOOD: How safe is it to allow such volatile fuel to be transported on rails?

Sarah Feinberg is the Acting Administrator of the Federal Railroad Administration. (Photo: FRA)

FEINBERG: I mean, if I have to be honest, I would prefer that none of this stuff be traveling by rail. I worry a lot about not just the folks who are working on the train and the passengers on the Amtrak that the train is going by, but I worry a lot about the people living in the towns and working in the towns that these trains are going through. Now, we have some routing protocols in place. There is a whole software system that the railroads use when they are trying to determine the right route for a substance like this, so it looks at things like city size, it looks at possible defects on rail, it looks at weather, it looks at speed, it looks at traffic, it looks at all of those factors and it basically spits out the best route for you to take.

CURWOOD: Industry a few days ago went over to the Office of Management and Budget, the folks who review the rule-making there inside of the OMB, and made a lot of complaints about the proposal to have this updated form of braking, they say it won’t have more significant safety benefits, it won’t have much in the way of business benefits and be extremely costly. Sounds like industry is pushing back against getting this stuff under control. Your take?

FEINBERG: Yeah, sure. And I expect that. Look, OMB meets with industry, yet the FRA is required to meet with all interested parties as well. So, as many meetings as I did with industry, I think we all did with the environmental community, small-town mayors, governors and interested members of Congress. So there are a whole lot of folks with a dog in this fight and they all want to talk to the regulator and they all want to talk to the Office of Management and Budget to affect the outcome of the rule. I think at the end of the day it’s OMB’s job and it’s FRA’s job to come up with the best possible rule that we can that will actually address the challenge. To be clear, that’s not an easy thing to do right now. It’s a bit amazing at this point you can take a common sense safety measure and watch the amount of time that it can actually take to turn into a regulation, but you know that’s my frustration, that’s our problem and our issue to deal with, and the main thing is we should just be keeping people safe.

CURWOOD: Sarah Feinberg is the Acting Administrator for the Federal Railroad Administration. Thanks so much for taking the time today.

FEINBERG: Thanks for having me.

CURWOOD: We asked the Association of American Railroads for comment on the proposed new regulations.

Spokesman Ed Greenberg’s reply is posted in full at our website, LOE.org.

It reads, in part: “America’s rail industry believes final regulations on new tank car standards by the federal government would provide certainty for the freight rail industry and shippers and chart a new course in the safe movement of crude oil by rail.”

Coming up…the power of labor allied with environmental activists. Stay tuned to Living on Earth.

The Association of American Railroads comment:

“The safety of the nation’s 140,000-mile system is a priority of every railroad that moves the country’s economy and the freight rail industry shares the public’s concern over recent high-profile incidents involving crude oil. This is a complex issue and a shared responsibility with freight railroads and oil shippers, which are responsible for properly classifying tank car contents, working together at further advancing the safe movement of this product.

The fact is, safety is built into every aspect of the freight rail industry, it is embedded through-out train operations and a 24/7 focus for thousands of men & women railroaders. Billions of private dollars are spent on maintaining and modernizing the freight rail system in this country. Since 1980, $575 billion has been spent on safety enhancing rail infrastructure and equipment with another $29 billion, or $80 million a day, planned for 2015.

Railroads have done top-to-bottom operational reviews and voluntarily took a number of steps to further improve the safety of moving crude oil by rail. Actions have included implementing lower speeds, increasing track inspections and track-side safety technology, as well as stepping up outreach and training for first responders in communities along America’s rail network.

Federal statistics show rail safety has dramatically improved over the last several decades with 2014 being the safest year in the history of the rail industry. More than 2 million trains move across our country every year hauling everything Americans want in their personal and business lives with 99.995 percent of cars containing crude oil arriving safely. That said, the freight rail industry recognizes more has to be done to make rail transportation even safer.

Freight railroads do not own or manufacture the tank cars carrying crude oil. Still, the freight rail system has long advocated for tougher federal tank car rules and believe that every tank car moving crude oil today should be phased out or built to a higher standard. We support an aggressive tank car retrofit or replacement program.

America’s rail industry believes final regulations on new tank car standards by the federal government would provide certainty for the freight rail industry and shippers and chart a new course in the safe movement of crude oil by rail.”

Links

REUTERS: Crackdown on oil trains in Canada?

Repost from Reuters

Exclusive: CN Rail derailment numbers soared before recent crashes

By Allison Martell, Mar 23, 2015 5:37am EDT
Smoke rises from fires caused by the derailment of a CN Railway train carrying crude oil near the northern Ontario community of Gogama, Ontario in this March 7, 2015 Transport Safety Board of Canada handout file photograph.  REUTERS/TSBCanada/Handout via Reuters
Smoke rises from fires caused by the derailment of a CN Railway train carrying crude oil near the northern Ontario community of Gogama, Ontario in this March 7, 2015. Transport Safety Board of Canada handout file photograph. Credit: Reuters/TSBCanada/Handout via Reuters

(Reuters) – Canadian National Railway’s safety record deteriorated sharply in 2014, reversing years of improvements, as accidents in Canada blamed on poor track conditions hit their highest level in more than five years, a Reuters analysis has found.

Canada’s Transportation Safety Board (TSB) said on Tuesday that track failure may have played a role in CN’s three recent Ontario accidents, which have fueled calls for tougher regulation. The agency said oil unit trains, made up entirely of tank cars, could make tracks more susceptible to failure.

Data obtained under access to information laws and analyzed by Reuters shows a broader trend, which has not been previously reported, and could pile more pressure on CN Rail to slow down trains or reduce their length. A crackdown on oil trains could raise the cost of shipping Canadian crude by rail.

Trains operated by CN in Canada derailed along main lines 57 times in 2014, up 73 percent from 33 in 2013 and well above a 2009-2013 average of 39 accidents per year. On CN’s full 21,000 mile (33,800 km) network, which also includes the Midwestern and southern United States, freight carloads rose 8 percent last year.

At least 27 of the domestic derailments were caused by track problems, up from a previous annual average of 14. Data for smaller rival Canadian Pacific Railway showed no similar pattern.

“CN is keenly aware of its recent safety trends, starting with a sudden increase of its accident rate in 2014,” Canada’s biggest railway said in a response to Reuters’ analysis.

The railway pointed out that its performance improved between 2007 and 2013, and so far, 2015 has been better than 2014. It said it was reviewing recent trends and has started testing tracks more frequently, boosted spending on infrastructure and installed new technology to detect problems with its tracks and equipment.

For 2015 it is planning to increase capital spending by C$300 million, to C$2.6 billion ($2.1 billion).

The rapid rise of crude by rail traffic has made more derailments potentially deadly, exposing railways to more scrutiny, particularly since 2013, when a runaway oil train leveled the center of the Quebec town of Lac-Megantic, killing 47 people.

Doug Finnson, president of a Teamsters union representing CN Rail’s train crews, said he was particularly concerned with the recent Ontario derailments.

“We’re on the record saying the trains are too long, the cars are too heavy, and the trains go too fast.”

Click on image to enlarge.

Yet it is not clear what was behind CN’s poor safety performance last year.

BROKEN RAIL

New Brunswick farmer Paul-Emile Soucy, who experienced CN’s troubles first-hand, faults inadequate maintenance.

On Jan. 26, 2014, a CN train derailed crossing his 230-year-old family farm. He said CN workers had marked railroad ties that needed to be replaced months before the accident, but they were replaced only after the derailment.

“They knew that the ties were bad and rotten and had to be replaced, but they didn’t do anything about it,” said Soucy. Data obtained by Reuters indicates that a broken rail caused the derailment.

Click on image to enlarge.

But CN rejected Soucy’s criticism, saying it spent C$41 million on basic maintenance in the area between 2012 and 2014.

The railway blamed bad weather and increased freight volume for last year’s spike in derailments. Rough weather, however, did not prevent rival Canadian Pacific from improving its safety performance, and the rise in volume was far less pronounced than the jump in derailments.

Both railways shipped similar volumes of crude last year – CN moved 128,000 carloads, or some 2 percent of its freight volume, and CP moved 110,000 carloads, 4 percent of its total.

The safety watchdog TSB has suggested that oil trains may have contributed to track problems that caused the Ontario accidents, but declined to comment on whether those trains could also be behind the overall rise in derailments, or comment on Reuters’ analysis in general.

Transport Canada, the industry’s main regulator, also did not comment specifically on Reuters’ findings, but spokesman Zach Segal noted that Transport Minister Lisa Raitt has asked a parliamentary committee to invite CN Rail to discuss its operations.

CN suggested last year could have been an outlier.

“It’s important to view CN’s safety performance over a span of time to assess meaningful trend lines, not just on the basis of a single or two-year perspective,” the railway said.

Its own statistics, shared with Reuters, show that its Canadian accident rate declined 26 percent from 2007 to 2013, to 1.71 accidents per million train miles. In 2014, the rate jumped to 2.67, its highest in at least a decade, but it is down to 2.15 so far this year. A less commonly used measure, accidents per billion gross ton miles, has improved markedly over the last decade, but jumped 58 percent in 2014.

(See related INTERACTIVE map of Major Oil Train Derailmentsin the U.S. and Canada since 2013: here)

Reuters’ analysis showed last year’s spike in accidents was driven mainly by track problems.

Ian Naish, a former director of rail and pipeline investigations at the TSB, said weather and traffic could have played a role, but one should also consider the impact of unit trains, which carry single commodities, on tracks.

“The intensity of loading is heavier than a mixed-freight train, generally,” said Naish. “All the cars are the same design, and the loads are all the same, so it’s the same impact, the same way, all the time.”

Unit trains have long been used to carry coal, grain and other commodities, but oil trains are a product of the rise of crude by rail and the shale boom of the past few years.

CN declined to comment on its recent accidents in Ontario, citing ongoing investigations. It said, however, that it had seen no indication that unit trains cause accidents, noting that such trains carrying other commodities, many with heavier loads, have run safely for decades. But the railway said it was reviewing the issue with outside experts.

($1 = 1.2549 Canadian dollars)

(Additional reporting by Nia Williams in Calgary; Editing by Tomasz Janowski)

 

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