Federal budget bill sets January deadline on safety rules for oil tanker cars
December 10, 2014 | By Joel Connelly
Tanker cars from a derailed CSX oil train burn after derailing in downtown Lynchburg, Virginia, last April. Increasing numbers of oil trains pass through Seattle and other Puget Sound cities en route to four refineries on northern Puget Sound. (AP Photo/City of Lynchburg, LuAnn Hunt)
Hidden away in Congress’ big spending bill, designed to fund the federal government through FY 2015, are stern marching orders to the U.S. Department of Transportation:
Deliver a final rule for new, safer oil tank car design standards by Jan. 15, 2015, and require that all rail carriers put in place comprehensive oil spill response plans.
The budget provisions, inserted by Sens. Patty Murray, D-Wash., and Susan Collins, R-Maine, are prompted by an oil train disaster in Quebec, and the rapid increase in trains carrying volatile Bakken crude oil from North Dakota to four refineries on northern Puget Sound.
“In Washington state, we’ve seen a startling increase in oil train traffic through communities of all sizes, from downtown Seattle to smaller, rural communities across the state,” said Murray, who has chaired the Senate Appropriations subcommittee on transportation.
“That’s why I worked to set a deadline for the Department of Transportation to issue new safety standards for tank cars next month and worked to fund a Shirt Line Railroad Safety Institute that will help protect smaller communities without sufficient resources to respond to oil trains.”
An old adage applies to the oil train issue: There’s nothing like a hanging in the morning to focus the mind.
In July of 2013, brakes failed and an unmanned runaway train sped into the small town of Lac-Megantic, Quebec, just over the border from Maine. It blew up, killing 47 people and leveling downtown.
The train was using 1960′s-designed DOT-111 tank cars. Another train, using DOT-111 cars, exploded into mushroom-cloud flames last December outside Casselton, N.D.. It forced evacuation of more than 2,000 people from the small town.
While promising new safety measures, the Department of Transportation has been criticized for giving railroads too much wiggle room.
The DOT said last summer it is setting a two-year deadline for getting DOT-111 tank cars off the rails. In reading the fine print, however, the clock would begin ticking in September of 2015 — giving rail carriers more than three years to stop use of the explosion-prone tank cars.
The federal budget bill would make available $10 million in grants to improve safety at railroad grade crossings that handle crude oil or other hazardous flammable liquids.
The DOT gets resources to hire 15 new hazardous-materials and rail-safety inspectors and $3 million to expand the use of automated track inspections to make sure rail tracks are maintained on crude oil transportation routes.
Refiners and shippers have responded.
Tesoro has stopped use of DOT-111 tank cars to supply its Anacortes refinery. The Burlington Northern-Santa Fe Railroad has announced a purchase of new, safer tank cars.
But the railroads have continued to resist making full, up-to-date information on oil shipments available to state and local emergency responders. They are fearful the information will be made public.
While Murray is touting its oil train provisions, the $1.1 trillion spending bill has drawn some fire from the political left.
Republicans have secured concessions, loosening Wall Street regulation and letting wealthy donors give more to political campaigns. The bill has slightly weakened school lunch nutrition standards championed by first lady Michelle Obama.
Liberal Rep. Jim McDermott, D-Wash., is voting against the bill.
“It is inconceivable that Congress would cut crucial regulations in the Dodd-Frank Act, when risky derivatives trading was at the center of the 2008 financial crisis,” said McDermott.
“Why is Congress giving Wall Street a massive Christmas present, when so many hard-working Americans are struggling to make ends meet?”
Repost from Faces of Fracking [Editor – This is much more than a story about our friend Ed Ruszel. Author Tara Lohan packs background and detail into this piece like a great storyteller. Another MUST READ, including almost everything you need to know about crude by rail in Benicia…. (This story also appears on Grist and DeSmogBlog.) – RS]
Faces of Fracking
Stories from the front lines of fracking in California
Ed Ruszel’s family business is in an industrial park in Benicia, CA, where Valero Energy is hoping to build a new rail terminal at its refinery to accept 70,000 barrels of crude oil a day. (Sarah Craig)
Ed Ruszel’s workday is a soundtrack of whirling, banging, screeching — the percussion of wood being cut, sanded, and finished. He’s the facility manager for the family business, Ruszel Woodworks. But one sound each day roars above the cacophony of the woodshop: the blast of the train horn as cars cough down the Union Pacific rail line that runs just a few feet from the front of his shop in an industrial park in Benicia, California.
Most days the train cargo is beer, cars, steel, propane, or petroleum coke. But soon two trains of 50 cars each may pass by every day carrying crude oil to a refinery owned by neighboring Valero Energy. Valero is hoping to build a new rail terminal at the refinery that would bring 70,000 barrels a day by train — or nearly 3 million gallons.
And it’s a sign of the times.
Crude by rail has increased 4,000 percent across the country since 2008 and California is feeling the effects. By 2016 the amount of crude by rail entering the state is expected to increase by a factor of 25. That’s assuming industry gets its way in creating more crude by rail stations at refineries and oil terminals. And that’s no longer looking like a sure thing.
Valero’s proposed project in Benicia is just one of many in the area underway or under consideration. All the projects are now facing public pushback — and not just from individuals in communities, but from a united front spanning hundreds of miles. Benicia sits on the Carquinez Strait, a ribbon of water connecting the San Pablo and Suisun Bays in the northeastern reaches of the San Francisco Bay Area. Here, about 20 miles south of Napa’s wine country and 40 miles north of San Francisco, the oil industry may have found a considerable foe.
The Geography of Oil
The heart of California’s oil industry is the Central Valley — 22,500 square miles that also doubles as the state’s most productive farmland. Oil that’s produced here is delivered to California refineries via pipeline. For decades California and Alaska crude were the main suppliers for the state’s refineries. Crude came by pipeline or by boat. Over the last 20 years imports from places like Saudi Arabia, Ecuador, and Iraq have outpaced domestic production. But a recent boom in “unconventional fuels” has triggered an increase in North American sources in the last few years. This has meant more fracked crude from North Dakota’s Bakken shale and diluted bitumen from Alberta’s tar sands.
A Union Pacific train engine is parked in front of the Valero refinery in Benicia, CA. Union Pacific has the final say over the logistics of trains arriving to the refinery. (Sarah Craig)
Unit trains are becoming a favored way to help move this cargo. These are trains in which the entire cargo — every single car — is one product. And in this case that product happens to be highly flammable.
This is one of the things that has Ed Ruszel concerned. He doesn’t think the tank cars are safe enough to transport crude oil (or ethanol, which is also passing through his neighborhood) in the advent of a serious derailment.
But he’s also concerned not just with the kind of cargo, but the sheer volume of it. If a derailment occurs on a train and every single car (up to 100 cars long) is carrying volatile crude, the dangers increase exponentially. The more trains on the tracks, the more likely something could go wrong. In 2013, more crude was spilled in train derailments than in the prior three decades combined, and there were four fiery explosions in North America in a year’s span.
This risk Marilaine Savard knows well. I met her in February of 2014 when she visited the Bay Area to tell residents about what happened in her town of Lac Megantic, Quebec. The closest word to describe the experience was “apocalypse,” she said, through tears.
Most people by now know of the train derailment that killed 47 people and incinerated half of Lac Megantic’s downtown in the wee hours of the morning on July 7, 2013. The fire was so hot the city burned for 36 hours. Even the lake burned.
Just two days before the disaster in Lac Megantic, Ed joined a community meeting in Benicia about the Valero project. For many residents, it was the first they were learning of it, but Ed had known months before.
In January 2013 a train carrying petroleum coke leaving Valero’s refinery derailed. It was minor — no cargo spilled — but it did rip up a piece of track, and the stalled train blocked the driveway to Ruszel Woodworks for hours. It was one of three minor derailments in the industrial park in the span of 10 months.
Ed came outside to see what the problem was. “The Valero people told me ‘get used to it, because we’re really going to be bringing in a lot of cars soon,’” Ed says. “At that point I really started paying attention and I got really scared.” Ed soon learned about plans for Valero’s new terminal, the 100 train cars that would pass by his business each day, and that it appeared the city was ready to rubber stamp the project — no Environmental Impact Report required.
The fire was so hot the city burned for 36 hours. Even the lake burned.
To explain one of the reasons for his concern, Ed shows me around his property where the lands comes to a V and two rails lines intersect. The main line of Union Pacific’s track passes along the back of Ed’s property, about 75 feet from his building. Here trains can get off the main line and switch to the local line that runs inside the industrial park. The local track passes by the front of Ed’s property, about 20 feet from the building.
The tracks into the industrial park were not designed for a crude by rail facility, Ed says. There are no loops. For Valero to get crude tanks into the refinery, the train must pass by the back of Ed’s property on the main line, pull all the way forward (usually about a mile), and then back up onto the local line, past the front of Ed’s property and into the refinery. The process is reversed when the train leaves. The 100 train cars a day that Valero hopes to bring in will come by his business up to four times per day.
That’s a concern not just because of potential dangers from derailments and diesel fumes from idling trains, but also because the industrial park has a rail traffic problem.
“My big concern here is specifically with the rails — I realize there are other huge environmental issues and global issues with the kinds of fossil fuel production we’re dealing with now and where it’s going,” Ed says.
Already trains servicing the Valero refinery and other industry neighbors can cause traffic nightmares. The trains block driveways to businesses and sometimes major roadways. An off ramp from Interstate 680 empties into the industrial park. Ed has photos of cars trying to exit the highway but are backed up on the interstate because of train traffic.
The reason has to do with the area’s history.
The tracks that come through the industrial park were not built for industry, but for the U.S. Army.
From 1851 to 1964, part of the land now claimed as an industrial park was home to the Benicia Arsenal. Bunker doors in the hillsides and buildings from the 1800s are part of the area’s colorful history. The rail lines moved around troops and armaments from the Civil War through the Korean War, Ed says, but it’s ill-suited to servicing a busy commercial rail terminal.
The Public Comments
Ed’s family moved their woodworking business to the industrial park in 1980. His brother Jack and their father started the company when Jack was still in high school, and it’s grown to over 20 employees. They’ve always played nice with the other businesses, including the refinery, which was built in 1968 and bought by Valero in 2000.
But the Ruszels felt the crude by rail issue demanded they take a stand. While not aligned with any local activist groups, Ed and other members of his family have spoken publicly about their concerns.
“In some ways, getting outspoken we feel like we’re sticking our neck out,” Ed says. “There are four generations of my family here in Benicia — I’ve got my 80 year-old mother, tiny little grandnieces and nephews, and they all have to live with it. But it is important enough.”
Their voices are part of a growing chorus in the area.
On May 31, 2013 the City of Benicia issued a Mitigated Negative Declaration, which means an initial study by the city concluded there were no significant environmental problems with the project that couldn’t be mitigated.
But many residents felt differently and commented on the initial study or voiced concerns at a July 9 city planning department meeting, which occurred just two days after the disaster in Lac Megantic drove home the reality of a catastrophic accident.
By August the city sided with concerned residents and decided that a draft Environmental Impact Report (DEIR) needed to be prepared to further review the project. An outside consultant was hired for the job but paid for by Valero. After much delay, the DEIR was released in June 2014 and promptly slammed by everyone from the state’s Attorney General Kamala Harris to the local group Benicians for a Safe and Healthy Community because it left out crucial information and failed to address the full scope of the project.
Even the Sacramento Area Council of Governments, which represents 22 cities in six counties that are “uprail” from the project, weighed in. It noted the draft EIR doesn’t offer any recommendations for safety measures because it concludes there is no “significant hazard.”
“We believe that conclusion is fundamentally flawed, disregards the recent events demonstrating the very serious risk to life and property that these shipments pose, and contradicts the conclusions of the federal government, which is mobilizing to respond to these risks,” the comment states. It even quotes a U.S. Department of Transportation report from May 2014 that says that Bakken crude by rail shipments pose an “imminent hazard.”
One of the biggest omissions in Valero’s DEIR was Union Pacific not being named as an official partner in the project. With the trains arriving via its rail lines, all logistics will come down to the railroad. Not only that, but the federal power granted to railroad companies preempts local and regional authority.
This preemption is one of the biggest hurdles for communities that don’t want to see crude by rail come through their neighborhoods or want better safeguards. An October 2014 editorial in the San Francisco Chronicle lamented, “What’s really crazy is the federal law that allows preemption of municipal and state law when it comes to critical decisions on rail safety. Affected communities deserve a say over what rolls through their towns.” With preemption, that may be impossible.
The DEIR also doesn’t identify exactly what kind of North American crudes would be arriving and from where, deeming it “confidential business information.” Attorney General Kamala Harris called that omission an “overly broad determination of trade secrets.”
Different kinds of crude have different health and safety risks. A pipeline rupture carrying Canadian diluted bitumen in a tributary of the Kalamazoo River in Michigan in 2010 showed that the thick, corrosive crude is much harder (perhaps impossible) to clean up adequately and is different than conventional crude, which sheens on the surface of water. And Bakken crude has proved more explosive than other crudes because of its chemical composition. It’s likely that some of the crude coming to Valero’s refinery would be from either or both sources.
Consider the numbers: In 2013 the total crude by rail brought into California was nearly 6.3 million barrels, and in the first nine months of 2014, the numbers were 4.3 million barrels. The top two sources have been North Dakota and Canada.
Further, the DEIR only examines the risks of a minor derailment along a 69-miles stretch of track between Benicia and Roseville. It doesn’t address the hazards (which could be catastrophic) of the three potential routes that the Union Pacific trains may take entering California, which involve passing over mountains, through tinderbox-dry forests, and along critical water sources.
Just a week ago a train derailed along one such route in the Feather River Canyon. Eleven cars plunged off the track and down the canyon. Had the cargo been crude instead of corn, its contamination could have made its way down the Feather River to Lake Oroville, a reservoir for millions of Californians.
Public comments on the DEIR closed on September 15, and now it’s a waiting game to see what happens next in Benicia. The planning commission will vote on whether to accept or deny the permit for the project. If the commission denies the permit, Valero can appeal to the city council. Either way, it’s likely to end up in court.
Cumulative Impacts
Ed spends his weekdays on land in Benicia and his weekends on the water, sailing out of nearby Richmond. He has shaggy brown hair, a neatly trimmed salt and pepper goatee, and looks every bit the weathered sailor that he is.
Having worked professionally as a boat captain and even as a solo sailor to Hawaii, Ed is a bit overqualified for the nearly windless fall Sunday we set sail with local activist Marilyn Bardet, a member of Benicians for a Safe and Healthy Community.
Ed Ruszel and Marilyn Bardet, an activist with Benicians for a Safe and Healthy Community, sail outside of the Richmond Harbor to investigate the presence of the oil industry along the Bay Area’s shoreline. (Sarah Craig) “Richmond Sailing” by Faces of Fracking, CC BY-NC-ND 4.0
Marilyn has been a refinery watchdog in Benicia for years and worries about more than just the transportation of fossil fuels. “For me it’s not only about whether they were going to bring it by rail, but whether they were going to bring it at all,” she says.
Sailing from Richmond, we get a good perspective of how pervasive the oil industry is in this area. We pass a couple of blue and white docked ships with their decals reading “Marine Spill Response.” Ever since the Exxon Valdez spill in Alaska, Ed explains, the industry pays into a fund that keeps ships at the ready in case of an accident.
No such thing exists for the crude by rail industry. In fact, the National Transportation Safety Board reported in January 2014, “Current regulations do not require railroads transporting crude oil in multiple tank cars to develop comprehensive spill response plans and have resources on standby for response to worst-case discharges.”
Ed points the bow of the boat toward the Long Wharf in Point Richmond where hulking oil tankers sidle up to be unburdened of their cargo.
We also have a clear view of the large terra cotta-colored storage tanks nesting above neighborhoods in the hillsides of Richmond. These are part of the sprawling refinery operations run by Chevron, but first begun by Standard Oil in 1901.
And it’s not the only refinery around here. In the North Bay, there are five along a 20-mile crescent, with Richmond and Benicia being the bookends. In between, Phillips 66 operates a refinery in Rodeo, and two other refineries (Shell and Tesoro) straddle Martinez.
Residents of these towns have joined in the crude-by-rail fights as well — lending their comments to Environmental Impact Reports, attending community meetings, and joining together for “healing walks” between communities.
Oil storage tanks used by the Chevron refinery in Richmond, CA are seen from the water’s edge. A fire at the refinery in 2012 caused thousands of nearby residents to seek medical treatment. (Sarah Craig) “Chevron Refinery By the Bay” by Faces of Fracking, CC BY-NC-ND 4.0
The network of support has even extended hundreds of miles south. The Phillips 66 refinery has two parts — one in Rodeo and the other 200 miles away, just outside the town of Nipomo in San Luis Obispo County. A pipeline joins the operations. The refinery has expansion plans that are currently being reviewed. One part of those plans involves building a new rail unloading facility in Nipomo that would bring in five unit trains of crude a week, with 50,000 barrels per train.
But the crude-by-rail projects in the area don’t end there. In nearby Pittsburgh, 20 miles east of Benicia, residents pushed back against plans from WestPac Energy. The company had planned to lease land from BNSF Railway and build a new terminal to bring in a 100-car unit train each day of crude. But WestPac’s plan has stalled after Attorney General Kamala Harris commented on a recirculated Draft Environmental Impact Report and said the project had “significant legal problems” and “fails to disclose the sources and analyze the environmental impacts of the new crude.”
Further south in Kern County in the heart of oil country, Plains All American just opened a crude-by-rail terminal that is permitted for a 100-car unit train each day. Another nearby project, Alon USA, received permission from the county for twice as much but is being challenged by lawsuits from environmental groups.
Closer to home, though, unit trains are already arriving. In March, an investigation by local TV station KPIX revealed that Kinder Morgan, a “midstream” company which is in the business of transporting crude (usually by pipeline or rail), received a change of use permit for a rail terminal in Richmond. Kinder Morgan had been transporting ethanol, but the Bay Area Air Quality Management District OK’d Kinder Morgan to offload unit trains of Bakken crude into tanker trucks. KPIX journalists followed the trucks to the Tesoro refinery in Martinez, just across the Carquinez Strait from Benicia.
Aimee Durfee is part of the Martinez Environmental Group. Not only is Martinez flanked by two refineries, but it’s also bisected by Union Pacific rail lines. Now, the residents also know that crude is arriving by truck. “We came to understand that we are collateral damage,” she said. “We get it coming and going.”
Aimee says her group’s biggest fear is the threat of derailment and explosion. The same is true for many Richmond residents near Kinder Morgan’s rail terminal.
“The permit was given illegally by the air district, without concern for the health and safety of the community,” says Andres Soto, an organizer with Communities for a Better Environment. “Should there be a catastrophic explosion — there are residences and two elementary schools across the street from the railyard.” He also says that the blast zone in Richmond contains a total of 27 schools. The blast zone is defined as a half mile away for evacuations if there is a derailment and one mile away if there is an explosion and fire.
Train cars are parked at the Kinder Morgan rail facility in Richmond, CA. The facility is currently permitted to offload Bakken crude from unit trains. (Sarah Craig) “Rail Terminal” by Faces of Fracking, CC BY-NC-ND 4.0
Earthjustice, a nonprofit that litigates on behalf of environmental causes, has led legal efforts trying to block the permit for Kinder Morgan, but in September, Judge James Bush threw out the suit because it was not filed within 180 days of the permit issuance. (The catch-22 of course being that it hadn’t been filed in the proper window of time because no one knew it had even happened, since public notice was not given.)
Earthjustice has appealed Judge Bush’s decision, but residents are continuing to fight the permit in other ways. On October 28, the Richmond City Council unanimously passed a resolution calling on the Bay Area Air Quality Management District to review and “if feasible, revoke the permit and subject the project to a complete CEQA process,” which would be a full environmental review.
The Big Picture
With all this crude by rail activity, some big picture thinking would be helpful. As Attorney General Kamala Harris wrote about the Benicia project, “There’s no consideration of cumulative impacts that could affect public safety and the environment by the proliferation of crude-by-rail projects proposed in California.”
Ed has come to a similar understanding. He is focused on the trains passing by his shop, but the process has opened his eyes to a lot more. He’d heard about the impacts of tar sands and Bakken crude but didn’t have a personal connection to it until unit trains began arriving in California.
“Just focusing on what’s happening in my little neck of the woods has led me to spend more time really looking at the big picture,” he said. “The climate is rapidly changing for one reason or another and probably a good portion of it is what we’re doing with the burning of fossil fuels and so forth, especially this rapid extraction.
“I can’t go to New York and demonstrate or deal with the Keystone XL pipeline, but we can look around here, keep our eyes open, and try to articulate what we’re seeing locally,” says Ed.
Repost from The Press Republican, Plattsburgh, NY [Editor: the safety improvements showcased here are far from adequate, nevertheless, it’s a good update on conditions in New York. Sen. Schumer is absolutely right – the DOT-111 tank cars should be taken out of service immediately… and not just in New York. And Bakken crude should be stabilized before it is transported (not just conditioned) … just as it is in Texas. – RS]
Area officials say crude-oil transport is getting safer
Lohr McKinstry, December 6, 2014
A DOT-111 oil tank car sits on a siding in the Midwest. New York state is adopting tougher rules on use of the tank cars, which pass through Essex and Clinton counties enroute to Albany,
LEWIS — New state regulations on crude-oil trains should help make them safer, Emergency Services officials from Essex and Clinton counties said recently.
State agencies have implemented 66 actions designed to strengthen standards, regulations and procedures to make the transport of crude oil by rail and water in New York safer and to improve spill preparedness and response.
Gov. Andrew Cuomo received a status report outlining the progress made by multiple state agencies after they were directed to evaluate the state’s capacity to prevent and address crude-oil accidents.
Local leaders have been concerned about the 100-car-plus oil trains moving through Clinton and Essex counties as the crude oil extracted in North Dakota arrives via Canadian Pacific Railway trains.
The oil is on its way to the Port of Albany, where it is stored for transport to various refineries.
IMPROVEMENTS
Essex County Emergency Services Director Donald Jaquish said he sees the new procedures as a safety benefit to the North Country.
“It’s a step in the right direction,” he told the Press-Republican. “We’re in a better position than we were a year ago.”
There’s been concern the trains could derail, and the oil burn or explode, as it has in other regions, and Jaquish praised Canadian Pacific for trying to make the tracks and tank cars safer.
“Upgrading the DOT-111 tank cars, rail replacement and maintenance, and specialized training are all beneficial to safety.
“Canadian Pacific has been helping us with training, hands-on-experience, that first responders need for these situations.”
EVACUATION PRACTICE
The tank cars are not owned by Canadian Pacific but by oil companies and vendors, and as a federal common carrier, the railroad is required to transport them.
Both the railroad and federal regulators have pushed for upgrades to the DOT-111 single-shell cars or a switch to the stronger DOT-109 or 112 cars.
“In almost any situation we get, we will be doing evacuations,” Jaquish said. “We’ve been working with Clinton County on planning and implementation.”
Clinton County Emergency Services Director Eric Day said any improvements to the transport of oil cars are welcome.
“At the end of the day, what they’ve done is good, no question,” Day told the Press-Republican. “Any regulatory move to make the DOT-111 cars safer is a plus. It’s a long time coming.”
One problem is that there are thousands of DOT-111 tank cars still in service, he said.
“There are so many of them (DOT-111 cars) out there on the tracks. They’re not going to stop moving the oil before they fix the cars. The oil is not going to stop coming any time soon.”
STATE GUIDANCE
Day said enhanced state regulations on oil shipments will be helpful.
“If there are changes that are pushed upon them (shippers), it can only make it safer. We’ve seen some of the benefits of the state’s work with regard to planning,” he said.
“We have guidance now on firefighting potential on dealing with these things. There are so many variables. Multiple cars of this crude oil on fire are a different animal.”
He said that, thanks to a donation, they now have the foam needed for such fires. The expensive product costs $30,000 for 1,000 gallons of foam but puts out crude-oil-based fires.
VOLATILE GAS
The North Dakota Industrial Commission has proposed draft regulations to remove the volatile gases from the oil before it is shipped, and Day said that provision is a good one.
“One of the things that makes the Bakken crude so volatile are the gases in the oil. The gas works its way out and is stuck in the head space of the car. If they breech, there’s flammable gas; cars that aren’t breeched and heat up, the gas could expand and be a problem.
“Removing that gas is a possibility before they put in the cars and ship it. If they could do that, it’s a big win.”
FEDERAL ROLE
Cuomo called for the federal government to mandate tank-car upgrades or replacement.
“The federal government plays a vital role in regulating this industry, and Washington must step up in order to expedite the implementation of safer policies and rules for crude-oil transport,” he said in the release.
The governor said the oil-production industry has resisted stronger tank-car standards and regulations requiring companies to reduce the volatility of crude before shipment.
A new report from the Brattle Group for the Railroad Supply Institute, a trade group, showed that a proposed federal rule to upgrade rail-tank cars could cost $60 billion.
According to the report, the high price tag is largely due to the costs associated with potential modifications to tank cars, early retirement of existing tank cars, temporarily using trucks instead of rails for transport and lost service time for tank cars under modification or awaiting modification.
‘TIME BOMBS’
U.S. Sen. Charles E. Schumer (D-NY) has also come out against use of DOT-111 cars.
“These outmoded DOT-111 tank cars … are ticking time bombs that need to be upgraded ASAP,” the senator said in a news release.
“That is why for two years, since the tragedy at Lac-Megantic, I have pushed federal regulators to phase out and retrofit these cars.
“As a result of our efforts, the federal Department of Transportation has put a proposal on the table that could start taking these cars off the tracks within two years, as well as restrict the speeds at which these trains operate.”
On July 6, 2013, a 74-tank-car train carrying Bakken light crude derailed in Lac-Megantic, Quebec, and the tank cars exploded, killing 47 people, destroying 30 buildings and spilling 1.5 million gallons of heavy crude oil.
That disaster was followed by oil-train-explosion derailments in Alabama, North Dakota, Illinois and New Brunswick, Canada.
U.S. crude oil and lease condensate proved reserves rose for the fifth consecutive year in 2013, increasing by 9% from the 2012 level to 36.5 billion barrels, according to the U.S. Crude Oil and Natural Gas Proved Reserves, 2013 report released yesterday by the U.S. Energy Information Administration (EIA). U.S. crude oil and lease condensate proved reserves surpassed 36 billion barrels for the first time since 1975.
Proved reserves
Proved reserves are those volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
North Dakota had the largest increase (1.9 billion barrels, 51%) in oil reserves among individual states in 2013, based on development of the Bakken/Three Forks formation in the Williston Basin. With 5.7 billion barrels of proved reserves, North Dakota has more reserves than the federal offshore waters of the Gulf of Mexico. Texas remains by far the leading state in total proved oil reserves—its reserves increased from 11.1 billion barrels in 2012 to 12 billion barrels in 2013 (an 8% increase). The largest decline of 2013 was in Alaska, where proved reserves decreased by 454 million barrels, due mainly to reduced well performance at large existing oil fields.
Changes in reserves reflect exploration and development activities as well as financial factors. Increases in crude oil and lease condensate reserves in 2013 were mainly attributable to nearly 5 billion barrels of extensions to existing fields. Extensions are the result of additional drilling and exploration in previously discovered reservoirs, and have accounted for the majority of reserves increases over the past three years. Continued development of the Bakken/Three Forks play in North Dakota accounted for a large portion of the reserves additions, and overall, tight oil plays accounted for almost 30% of all U.S. crude oil and lease condensate proved reserves.
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