Tag Archives: National Transportation Safety Board

Ca-ching: Oil-by-rail surge to benefit three commercial sectors

Repost from Benzinga
[Editor: Quick & dirty on the 3 sectors: Freight Car Designers And Refitters, Insurance Providers, and Emergency Services And Safety Training.  UNLESS … if we stop crude by rail in its tracks, the only CA-CHING will be in the alternative energy fields.  – RS] 

3 Sectors Expected To Benefit From The Oil-By-Rail Surge

Bruce Kennedy, Benzinga Staff Writer, August 11, 2014

It’s been just over a year since a freight train carrying crude oil from the Bakken shale fields in North Dakota derailed and exploded in a Quebec town near the U.S.-Canadian border, killing 47 people.

That accident, along with several others in its wake, drew attention to the enormous increase in shale oil now being transported from North Dakota and Canada by rail – and the vulnerabilities of that form of transport.

“More crude oil is being shipped by rail than ever before, with much of it being transported out of North Dakota’s Bakken Shale Formation,” Department of Transportation Secretary Anthony Fox pointed out in a press conference last month. “In 2008, producers shipped 9,500 rail-carloads of oil in the U.S.; by just last year, that number skyrocketed to 415,000 rail-carloads — a jump of more than 4,300 percent.”

At that same press conference, Fox announced a rule-making proposal to improve the safe transportation of large quantities of flammable materials by rail – crude oil and ethanol in particular.

The increase in oil being transported by rail, as well as the new safety measures, might also be a windfall for companies in some related fields.

Freight Car Designers And Refitters

The proposed new safety rules for oil freight cars means a potential bonanza for firms like The Greenbrier Companies (NYSE: GBX). The Oregon-based group is a leading manufacturer and marketer of railroad freight car equipment in both North America and Europe.

Along with retro-fitting existing oil rail cars, Greenbrier is also designing a new genreration “Tank Car of the Future,”  with a thicker tank and bigger welds to ensure greater safety.

The new design, according to the Rigzone oil and gas industry web site, is “intended to meet anticipated new industry and government standards for tank cars transporting certain hazardous material.”

Insurance Providers

The Wall Street Journal reports that most, big North American railroads usually carry about $1.5 billion in liability insurance – but notes that accidents like last year’s deadly derailment and explosion in Lac-Mégantic, Quebec, can end up costing billions of dollars more in cost, especially if that accident happens in a populated area.

“Even if it happens outside of town, the massive damage to property and the environment — you’re stymied when you have these kind of crude oil fires burning hot and big for days,” Karen Darch, president of Barrington, Illinois, told the newspaper.

This could lead to an increase in the need for insurance.

“With experts predicting that oil spill derailments may increase in frequency over the next decade, the insurance industry must be prepared to address this new coverage threat,” says the law industry tracker web site Law360 earlier this year, “including the coverage issues and potential exposure which may arise from these disasters.”

Emergency Services And Safety Training

Earlier this year, Minnesota’s state legislature passed an oil transport law. The measure, reportedly worth more than $6 million, took fees generated in part from oil and railroad companies and put that funding towards tanker and pipeline disaster training, as well as more state transportation safety inspectors.

As former National Transportation Safety Board Chairwoman Deborah Hersman pointed out in a letter written this past January to the head of the Federal Railroad Administration, there is no mandate for the railroads to come up with comprehensive disaster response plans for oil train derailments

This means the rail carriers “have effectively placed the burden of remediating the environmental consequences of an accident on local communities along their routes,” the letter said.

According to the Association of American Railroads, the industry is providing $5 million to develop and fund specialized training for first responders handling a crude-by-rail accident, as well as developing “an inventory of emergency response resources and equipment for responding to the release of large amounts of crude oil along routes over which trains with 20 or more cars of crude oil operate.”

Vallejo Times-Herald: Why the rush on crude?

Repost from The Vallejo Times-Herald, Letters

Why the rush on crude?

By Kathy Kerridge, Vallejo Times-Herald, 07/08/2014

The Benicia Planning commission will take public comments tonight at City Hall on the Draft Environmental Impact Report for Valero’s Crude by Rail project. Written comments are due by Aug. 1. This project would bring 100 rail cars a day over the Donner Pass or through the Feather River Canyon, over rivers, through Truckee, Roseville, Sacramento, Davis, Dixon, Fairfield, the Suisun Marsh and into Benicia.

These trains could be carrying the same Bakken Crude that exploded in Canada, killing 47 people and Canadian Tar Sands, which have proved impossible to clean up when it has spilled in waterways. Some have claimed this is safe. Everyone should be aware that the National Transportation Safety Board in January said that trains carrying crude oil should “where technically feasible require rerouting to avoid transportation of such hazardous materials through populated and other sensitive areas.” At this point in time it is feasible to keep these dangerous materials from going through populated areas by not approving the project. Otherwise it will not be feasible.

The new railcars that Valero says it will use are the same ones that ruptured and spilled April 30, 2014 in Lynchburg, Virginia, threatening Richmond’s water supply. The Department of Transportation is in the process of crafting new rules for rail cars carrying crude, but there is no time line for when they will be issued and it will be some time before any new cars are available. There have been two train derailments in Benicia’s Industrial Park in recent months.

Why the rush? Is Valero running out of crude oil? No. The reason Valero wants to bring in this dangerous crude, in rail cars that split and rupture in a derailment, is that this crude oil is on sale right now. The oil isn’t going anywhere. It isn’t safe to transport through populated areas and all of the communities that this crude goes through will be at risk.

Oil train fires require SWAT teams, veteran firefighters tell states

Repost from The Island Packet, Beaufort, SC

Oil train fires require SWAT teams, veteran firefighters tell states

By Curtis Tate  |  McClatchy Washington Bureau  |  June 17, 2014

— A pair of Texans with decades of firefighting experience is encouraging state and local government leaders to consider establishing SWAT-like response teams for crude oil train fires.

A series of derailments of trains loaded with crude oil in the past year has exposed numerous safety vulnerabilities, including the integrity of the rail cars, the condition of the tracks and the way the trains are operated.

It’s also revealed a yawning gap in emergency response. Most fire departments across the country are simply not trained or equipped to fight the enormous fires seen in recent derailments.

“Emergency response is the most difficult part,” said Bob Andrews, founder and president of the San Antonio-based Bob Andrews Group, who has both firefighting experience and knowledge of the rail industry.

Groups representing firefighters, fire chiefs and emergency management agencies have testified in Congress in recent months that derailments such as those in Quebec, Alabama and North Dakota are beyond their response capabilities.

“There’s only so much training you can do,” said Sam Goldwater, Andrews’ business partner. “Our first responders are pretty much maxed out.”

Andrews and Goldwater said they’ve received a favorable response so far from the state and federal officials they’ve approached. Several states have expressed interest in their plan, but a proposal for a specialty fire department in the Philadelphia region is the furthest along. They envision for their proposal to be a mix of public and private funds.

“We’re optimistic that we’ll be able to work something out in Pennsylvania,” Andrews said after a recent meeting with state officials.

Entire trains of tank cars loaded with crude oil snake through Pennsylvania’s capital city every day, bound for refineries and terminals along the East Coast. The trains carry Bakken crude oil from North Dakota and western Canadian tar sands oil to a cluster of refineries and barge terminals in the Philadelphia area.

Andrews and Goldwater say that airports and refineries have their own firefighting teams with special expertise and equipment. And, they say, that’s precisely what’s demanded by the rise in crude oil shipments by rail.

“You need the airport idea,” Goldwater said, “but you need it for the 1,400 miles between North Dakota and the Delaware River.”

In March testimony before a Pennsylvania House of Representatives committee, Andrews said that the nation’s 783,000 volunteer firefighters are dedicated to their work. But according to the National Volunteer Fire Council, their ranks have declined 13 percent since 1984.

“It is not fair for the community, at the local or state level, to create an environment where well-meaning volunteers will feel compelled to commit themselves to conducting highly-hazardous operations, that they are neither trained, nor equipped to perform,” Andrews testified.

One such incident took place in West, Texas, in April 2013. A massive explosion at a fertilizer storage facility killed 11 firefighters from five departments. In July last year, a 72-car train of Bakken crude oil rolled away and derailed at high speed in the town of Lac-Megantic, Quebec. The inferno killed 47 people and leveled much of the business district.

“Volunteer fire fighters and emergency response personnel being thrust into catastrophic events without adequate training or resources is a widespread problem that needs to be addressed,” wrote the National Transportation Safety Board after a toxic chemical leak from a rail car in November 2012 in Paulsboro, N.J.

Tim Burn, a spokesman for the International Association of Fire Fighters, said that a broad-based training program was still the best approach.

“It is the duty of government to provide the resources needed for hazmat response,” he said, “and this public safety discussion should not be driven by profit motive.”

Goldwater said he and Andrews expected a return on their investment. However, he added, if anyone wanted to make lots of money, “this is not the thing to do.”

So far, the impulse of government and industry has been to simply fund more training for emergency personnel. But Andrews said that might not be the most effective approach. The firefighting profession experiences an attrition rate of about 20 percent a year. Call volumes have increased, putting more pressure on volunteer and career firefighters alike. It’s difficult for volunteers with full-time jobs to take off time for training, and most departments can’t afford to pay for it.

The Association of American Railroads, the industry’s leading advocacy organization, has offered to train 1,500 emergency responders at its rail testing facility in Pueblo, Colo. But with the random and rare nature of train derailments, the odds aren’t good that a limited number of trained personnel scattered across the country will be where they’re needed when something happens.

Andrews and Goldwater say their plans would be geographically tailored. Philadelphia is a major destination for crude oil, so its response needs may be different from places such as Albany, N.Y., or Sacramento, Calif., where oil trains pass through.

DOT-111 tank cars: “the Ford Pinto of rail cars”

Repost from Mother Jones
[Editor: The Casselton ND video has a nearly inaudible audio track.  The Lynchburg VA video at end of this article is an amazing drone flyover of the derailment and spill in Lynchburg, with no audio, and with an annoying advertisement at the beginning.  Ignore the ad and it will disappear.  – RS]

Why Do These Tank Cars Carrying Oil Keep Blowing Up?

Millions of gallons of crude oil are being shipped across the country in “the Ford Pinto of rail cars.”

—Michael W. Robbins on Tue. May 27, 2014
Above: DOT-111 tank cars carrying crude oil exploding in Casselton, North Dakota, in December 2013  [Note: this video seems to have no sound, but it does have audio, only turned extremely low.]

Early on the morning of July 6, 2013, a runaway freight train derailed in Lac-Mégantic, Quebec, setting off a series of massive explosions and inundating the town in flaming oil. The inferno destroyed the downtown area; 47 people died.

The 72-car train had been carrying nearly 2 million gallons of crude oil from North Dakota’s Bakken fields. While the recent surge in domestic oil production has raised concerns about fracking, less attention has been paid to the billions of gallons of petroleum crisscrossing the country in “virtual pipelines” running through neighbor­hoods and alongside waterways. Most of this oil is being shipped in what’s been called “the Ford Pinto of rail cars”—a tank car whose safety flaws have been known for more than two decades.

Holey Roller: The DOT-111
The original DOT-111 tank car was designed in the 1960s. Its safety flaws were pointed out in the early ’90s, but more than 200,000 are still in service, with about 78,000 carrying crude oil and other flammable liquids. The DOT-111 tank car’s design flaws “create an unacceptable public risk,” Deborah Hersman, then chair of the National Transportation Safety Board, testified at a Senate hearing in April. Sen. Charles Schumer (D-N.Y.) has compared the car to “a ticking time bomb.” While the rail industry has voluntarily rolled out about 14,000 stronger tank cars, about 78,000 of the older DOT-111s remain in service. Retrofitting them would cost an estimated $1 billion.

The DOT-111Chris Philpot

The Bakken Factor
The sudden flood of Bakken crude (currently 1 million barrels a day), which is potentially more flammable, volatile, and corrosive than traditional crude, also poses a new hazard. The violence of the Lac-Mégantic blast and other recent wrecks involving this variety of crude stunned railroads and regulators. In May, the Department of Transportation issued an emergency order requiring state crisis managers to be notified about large shipments of Bakken oil. The agency also advised railroads to stop carrying the oil in older DOT-111s, citing the increased propensity for accidents. Meanwhile, as US officials decide what to do next, Canada has ordered its railways to stop all crude shipments in the cars by 2017.

Lac Megantic oil train accidentTank cars carrying crude oil derailed in Lac-Mégantic, Quebec, in July 2013, killing 47 people. AP Photo/The Canadian Press, Paul Chiasson

More Trains, More Spills
Trains carry more than 10 percent of all US oil, particularly from areas without major pipelines, such as the Bakken. The sudden surge of oil shipments has so clogged the rails that farmers in North Dakota complain that they can’t get fertilizer shipped in or their crops shipped out.

Not waiting for a final decision on the Keystone XL pipeline, oil companies are also building rail terminals in Canada’s tar sands region. The Association of American Railroads says that the vast majority of rail shipments arrive without incident. But more oil on the rails has also meant more spills. Trains leaked more crude in 2013 than all years since 1971 combined. (These figures don’t include the Lac-Mégantic disaster, in which 1.6 million gallons of oil spilled.)

Oil by rail

Off the Rails: Recent DOT-111 Accidents
Watch a video of tank cars exploding in Casselton at the top of the page. Watch video of the aftermath of the recent derailment and spill in Lynchburg, Virginia, below.

Oil rail spills