Tag Archives: North Dakota Petroleum Council

Crude By Rail, State regulation

When a Public Hearing Isn’t for the Public; Oil Train Hearing in Spokane Leaves Public Frustrated

Repost from Huffington Post

When a Public Hearing Isn’t for the Public; Oil Train Hearing in Spokane, WA Leaves Public Frustrated

Bart Mihailovich, Spokane Riverkeeper   |   06/18/2014

Earlier this week, members of the Washington State Senate’s Energy, Environment & Telecommunications Committee held a public hearing on oil trains and oil transport safety in Spokane, WA in the Spokane City Council chambers at Spokane City Hall. The hearing was organized by Senators Mike Baumgartner (R-Spokane) and Doug Ericksen (R-Bellingham) who during last year’s legislative session proposed SB 6524 that called for more studies in regards to the safety of the transport of hazardous materials through the state. The bill was quite a bit weaker than a bill proposed by the Washington Environmental Priorities Coalition, and was often referred to as the industry bill.

The significance of such a hearing being held in Spokane shouldn’t be understated as these hearings are typically held in Olympia at the Capital, but also because of all the cities in the state of Washington, Spokane the greater Inland Northwest are significantly more at risk to an increase in oil trains due to the proximity and quantity of rail lines through the community.

Spokane Riverkeeper, and many others in attendance, attended the hearing with a goal of hearing from Senators Baumgartner and Ericksen about their bill and any possible (or hopeful) changes that they may be thinking going forward, and to testify concerns about the aforementioned bill for not being strong and specific enough, and to testify general and / or specific concerns about Bakken crude oil trains traveling through Spokane and surrounding communities.

Little did many of us in attendance know, though I suppose we should have expected, that Senators Baumgartner and Ericksen planned an extremely frustrating two hours of stalling and industry speak with very little public testimony and barely any mention of Spokane and the impacts shipping crude oil poses to Spokane and surrounding communities.

Representatives from the North Dakota Petroleum Council and Burlington Northern Santa Fe Railroad (BNSF) took up roughly 100 of the 120 minutes of the hearing with occasional questioning and comments from other members of the Senate committee. And with those questions, industry rarely answered with specifics and almost always pivoted away to comfortable talking points.

Frustrations from those in attendance in the Council Chambers started appearing almost immediately as the rep from the North Dakota Petroleum Council went very deep in to a PowerPoint presentation disputing claims about Bakken crude oil is more flammable or more dangerous using complicated slides and numbers about flash points and chemistry factors.

Spokane City Councilman Jon Snyder took to Twitter to express frustrations: [jonbsnyder@jonbsnyder  State Senate hearing on Oil Trains in Spokane: more of a chemistry lesson than a safety discussion. Thx @andybillig for good questions.  11:11 AM – 17 Jun 2014]

At one point during the extremely long, boring and not particularly on topic presentation from the oil industry, Senator Mike Baumgartner spoke up and asked for the rep to speak in layman’s terms and say yes or no, Bakken Crude oil is more flammable and more dangerous than other types of products. To which the rep responded, “no, it’s the same”, and which also provided the Republican Senate staffer who was live Tweeting the hearing a very likable and shareable tweet to attribute to Senator Baumgartner who conveniently enough is in the midst of a reelection campaign. More on this convenient irony later.

But more importantly, the claim that Bakken crude is not as dangerous is not only controversial, but also on the wrong side of not only public perception but regulatory movement, as can be seen in a Pipeline and Hazardous Materials Safety Administration announcement from earlier this year.

Next up were a few suits from BNSF who spent most of their time lauding investments that BNSF is or has made to make their company and their equipment safer, for themselves, and little or no time talking about how to make Spokane or surrounding communities safer.

Then the kicker was BNSF often repeating that 2013 was their safest year to date, when in fact it was wildly reported earlier this year that more oil was spilled in 2013 from BNSF trains than the previous 38 years total.

With the 18 minutes that were left in the hearing, members of the public, those with persistence, were given an opportunity to speak to the Committee and those who spoke almost all testified to concerns for shipping dangerous Bakken crude through Spokane and the Inland Northwest, especially given the litany of recent oil train accidents and the increasing and louder call for more transparency, more safety and more certainty. A recap of concerns can be found via this news article from The Spokesman-Review.

If this truly was a hearing for Spokane, by Spokane, we most certainly would have seen, and would have been right to expect to see presentations or statements from various response or regulatory agencies in the area who would be responsible if something were to happen in Spokane. Nowhere or at no time did we hear from any of those agencies or representatives. Which leads me to conclude that this was never intended to be any more than a highly politicized campaign opportunity for two Senators in heated reelection bids.

Yes, it was a big deal, or could have ben a big deal that the Energy, Environment & Telecommunications Committee came to Spokane for this hearing. But I couldn’t help to think that right off the bat the whole thing was stacked against the public. The hearing was at 10:30 a.m., a very difficult time for members of the public and concerned citizens to participate . I found it funny that Senator Baumgartner used his welcome address to say, “this is good for Spokane as many folks here find it difficult to travel to Olympia to participate in the process like this.”. To which I would say, Senator Baumgartner, this hearing didn’t make anything easier. A quick glance around the Council Chambers also showed that there were far more more lobbyists, industry staffers, and other “paid to be there” attendees than members of the public.

Senators Baumgartner and Ericksen are both very savvy politicians. Oil train shipments through Spokane and the state of Washington is a very heated issue. Their bill last year was an industry bill at best, offering nothing more than more studies and more hearings and little in the way of what residents of this state want which is transparency, safety and some level of assurance. Being their both in reelection mode, having this hearing in Spokane, completely loaded with industry jargon to stall and delay public concerns gave them an opportunity to look like the good guys who are tackling an issue that the constituents want them to. Having the state Senate Republican party there live Tweeting the event to make it look like Baumgartner and Ericksen were getting to the bottom of the public’s concerns was almost too good to be true.

And you know what, it worked. Coverage of the hearing was picked up by news outlets around the state and the region, and all of the coverage painted Senators Baumgartner and Ericksen as the leaders of the concerns. When in fact it was the mere 18 minutes of testimony from the public and questions from other members of the Senate committee that elevated the concerns and asked the questions important to Spokane.

Amazing how much influence the public had with 18 minutes. Imagine if this really was a public hearing.

Bakken Crude, DOT-111, Federal Regulation (U.S.), Reid vapor pressure levels, Volatile gases

Oil field developer proposes to strip Bakken crude of volatile natural gas liquids

Repost from EnergyWire, E&E Publishing
[Editor: Two significant quotes: “We’re not really taking a position on the tank car rule.  All we’re saying is, in making the rule, please consider what’s going in the car in addition to the car itself.” and “‘Right now, they [American Petroleum Institute] are kind of the lone soldier among the players involved here saying volatility isn’t an issue.  Everyone else is saying, “We know it’s an issue — now we have to figure out how we solve it.”‘”  Well, one way to solve it is to leave the stuff in the ground and invest in renewable energy.  Duh.  – RS]

Oil groups line up at White House over tank car standards

Blake Sobczak  |  E&E News  |  Tuesday, June 10, 2014

Quantum Energy Inc. claims to have no position on proposed oil tank car standards — yet the oil field developer stopped by a White House office last week to discuss them anyway.

Russell Smith, Quantum’s executive vice president of public affairs, said he met with the small but influential Office of Information and Regulatory Affairs to make sure regulators knew about the company’s plans for “stabilizing” hot-to-handle crude from North Dakota’s Bakken Shale play.

Bakken crude has earned a volatile reputation after a string of oil train derailments and fires. A 72-car oil train jumped the tracks and exploded in downtown Lac-Mégantic, Quebec, last July, killing 47 people and prompting regulators to warn that Bakken crude may be less stable than other types.

The deadly crash also set the stage for the “comprehensive” oil-by-rail rulemaking package now weaving its way through OIRA, part of the Office of Management and Budget. White House records show several oil companies, refiners and industry groups have met with administration officials and transportation regulators to shape new standards for the type of DOT-111 tank car long faulted for its puncture-prone design.

“We’re not really taking a position on the tank car rule,” said Smith, who attended June 2’s meeting with lobbyists from FTI Consulting, OIRA representatives and Department of Transportation regulators. “All we’re saying is, in making the rule, please consider what’s going in the car in addition to the car itself.”

Smith’s company hopes to set up “21st-century energy centers” in North Dakota’s Williston Basin capable of stripping the most volatile natural gas liquids out of Bakken crude before the commodity is loaded onto rail cars.

Oil producers have contested claims that Bakken crude is more volatile than other types, and the North Dakota Petroleum Council has conducted tests that it says show the crude is safe (EnergyWire, May 21).

Last month the oil industry’s top lobbying group, the American Petroleum Institute, met with OIRA to air its views on tank car rules that could have a big impact in the Bakken, where well over 600,000 barrels of oil leaves the state daily by rail (EnergyWire, May 28). API said in a later statement that it is “critical” that the proposed rule should “achieve measurable safety improvements by using science and data to address accident prevention, mitigation and response.”

Since then, several refiners, chemical companies and trade groups, including the American Chemistry Council and the American Fuel & Petrochemical Manufacturers (AFPM), have also met with OIRA about the tank car rules.

AFPM has conducted its own study of Bakken crude volatility and concluded even older-model DOT-111 rail tank cars can safely handle the oil, although the refining group detected Reid vapor pressure levels as high as 15.4 pounds per square inch (absolute) in some samples.

Reid vapor pressure offers a good indication of flammable gas content in a liquid such as crude. While 15.4 psi is well within even the oldest DOT-111 tank cars’ safe pressure capacity, AFPM said in its survey of Bakken crude characteristics that vapor pressures of 10 psi or lower “are in the best interests of AFPM members.”

Smith said Quantum intends to strip Bakken crude down to a Reid vapor pressure of 6 psi or lower and sell the separated gas liquids. The Tempe, Ariz.-based holding company also hopes to set up five micro-refineries modeled after a new joint project run by MDU Resources Group Inc. and Calumet Specialty Products Partners (EnergyWire, April 11, 2013). Once completed, that diesel facility will mark the first new refinery built in the United States in nearly 40 years.

“Since we’re stabilizing [Bakken oil] upstream of our refineries, our refineries will actually be receiving ‘stripped’ crude,” Smith said. “With a reasonably small increase in investment, we could be capable of stripping every drop of oil coming out of the Bakken.”

The API said in a statement that “NGL removal is among the topics being considered by the experts who are developing with [the Pipeline and Hazardous Materials Safety Administration’s] participation the new standard for classifying, handling, and transporting crude by rail, and API intends to review their work on the issue before taking a position.”

API has repeatedly emphasized that Bakken crude poses no greater risk than other light oil varieties, a position Smith called “short-sighted.”

“Right now, they are kind of the lone soldier among the players involved here saying [volatility] isn’t an issue,” Smith said of API. “Everyone else is saying, ‘We know it’s an issue — now we have to figure out how we solve it.'”

Blake Sobczak

Reporter, EnergyWire

bsobczak@eenews.net

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202-737-5299 (f)

@BlakeSobczak (Twitter)

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About Quantum Energy, Inc.

QUANTUM ENERGY, INC. is a development stage, publicly traded, diversified holding company with offices in Williston, North Dakota. Quantum places an emphasis in refinery development, land holdings, oil and gas exploration, drilling, well completion and fuel distribution www.quantum-e.com.

Bakken Crude, Derailment, DOT-111, Explosion, Federal Regulation (U.S.), Oil by Rail Week of Action July 6-12 2014, Oil Industry, Risk Assessment

Interactive Map and Report: “Runaway Train: The Reckless Expansion of Crude-by-Rail in North America”

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”

2014-05-28  |  Justin Mikulka

A new report and website released today by Oil Change International provides a comprehensive overview of the current oil-by-rail industry in North America and it isn’t a pretty picture.

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.

N.Amer.CrudeByRail(600)

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.

Last week, the American Fuel and Petrochemical Manufacturers also weighed in with their opinion.  AFPM President Charles Drevna stated their position to Railway Age:

“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.

Stockman, author of the Oil Change International report, remains hopeful that the tide could turn.

“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.”