By Capital Staff and Wire Reports, June 5, 2015 5:08 pm
ST. PAUL — The Minnesota Public Utilities Commission has approved a certificate of need for the proposed Sandpiper pipeline route through northern Minnesota as it goes from North Dakota’s Bakken oil fields to Superior, Wisconsin.
While the PUC agreed 5-0 Friday that the $2.6 billion, 610-mile pipeline – about 300 miles across Minnesota – is necessary, they didn’t foreclose the possibility of more changes on its proposed path, the Associated Press reported.
The PUC said it still might reroute Enbridge’s proposed route away from environmentally sensitive lakes, streams and wetlands in northern Minnesota. Enbridge Energy will still have to go through a lengthy review of its proposed route and a proposed alternative.
Enbridge says it would like to have it operating in 2017.
The proposed route goes from the oil field near Tioga, N.D., near Williston, to Superior, Wis., where ocean-going vessels can dock just below Duluth on Lake Superior. In North Dakota it follows fairly closely to U.S. Highway 2.
The Minnesota portion would go 75 miles from Grand Forks, N.D., east to the main Enbridge junction at Clearbrook, Minn., with 24-inch pipe with a capacity of 225,000 barrels per day.
Then for a 225-mile leg, it jogs south to Park Rapids, Minn. – which is on a line east of Fargo – and then east to Superior with a 30-inch pipeline with a capacity of 375,000 barrels per day, according to Enbridge.
At a capacity of 375,000 barrels a day across Minnesota, the Sandpiper would carry the equivalent of about 525 rail tanker cars, each holding 714 barrels, or about five trains of crude oil, every day.
Enbridge says Sandpiper is needed to move the growing supply of North Dakota crude safely and efficiently to market.
But environmentalists and tribal groups say the risk of leaks is too high.
North Dakota regulators have already approved Sandpiper.
North Dakota produces about 1.2 million barrels of oil per day, about 13 percent of U.S. production; roughly two-thirds of it leaves the state by train.
Recent explosive derailments of oil trains have informed the debate over building new pipelines.
Repost from The Blade, Toledo, Ohio [Editor: Significant quote by Josh Mogerman, spokesman for the Natural Resources Defense Council’s Great Lakes regional office in Chicago: “Welcome to the Bomb Train Capital of America…. Of all the suite of issues I work on for the NRDC, this is the scariest…. These are moving targets going through very, very densely populated areas.“
RISKY CARGO ON MIDWEST OIL TRAINS
Amid fracking boom, cities fear explosive safety risk it can carry
BY TOM HENRY , BLADE STAFF WRITER, June 1, 2015
CHICAGO — While the global fracking boom has stabilized North America’s energy prices, Chicago — America’s third largest city and the busiest crossroads of the nation’s railroad network — has become ground zero for the debate over heavy crude moved by oil trains.
With the Windy City experiencing a 4,000 percent increase in oil-train traffic since 2008, Chicago and its many densely populated suburbs have become a focal point as Congress considers a number of safety reforms this year.
Many oil trains are 100 or more cars long, carrying hydraulically fracked crude and its highly explosive, associated vapors from the Bakken region of Montana, North Dakota, Saskatchewan, and Manitoba.
A majority of those trains also cross northwest Ohio on their way to refineries and barge terminals along the East Coast.
Derailments can lead to massive explosions, such as the one on July 6, 2013, when a runaway train derailed in Lac-Megantic, Que., just across the U.S.-Canada border from Maine. The resulting explosions and fire killed 47 people and leveled the town’s business district.
“For me to assure my community there’s no risk, I would be lying,” Aurora, Ill., Mayor Tom Weisner told reporters on the Halsted Station’s elevated platform near downtown Chicago last week. The discussion was arranged by the Institutes for Journalism & Natural Resources, a group that promotes better environmental reporting.
Authorities are concerned a rail accident would be catastrophic, as trains are carrying more heavy crude since fracking became popular. THE BLADE/BRIAN BUCKEY
“A derailment in or around our downtown would be absolutely disastrous,” he said.
One of Chicago’s distant western suburbs, Aurora, with 200,000 people, is the second-largest city in Illinois. Though it has fewer than one resident for every 10 in Chicago (population: 2.7 million), Aurora is somewhat smaller than Toledo, which has 281,000 residents.
Mr. Weisner, whose mayoral office overlooks tracks where many of the oil trains pass going toward Chicago, shrugged when asked about emergency planning.
“That always helps, of course. But you could have a major catastrophe before they could arrive on the scene, and that’s the truth,” Mr. Weisner said, noting the Lac-Megantic explosion on at least three occasions.
Closer to home, he said, are memories of a train explosion on June 19, 2009, in Cherry Valley, Ill., just outside Rockford.
Although that derailment involved a train carrying flammable ethanol — not an oil train — its fire killed a motorist stopped at a railroad crossing, injured seven people in cars plus two firefighters, and forced the evacuation of 600 homes.
Aurora, Ill., Mayor Tom Weisner fears what would happen if an oil train derails and explodes in an urban area. THE BLADE/TOM HENRY
On March 5, 21 cars of a 105-car BNSF Railway train hauling oil from the Bakken region of North Dakota derailed in a heavily wooded, rural area outside Galena, Ill.
The train erupted into a massive fireball 3 miles from a town of 3,000 people in the northwest corner of Illinois, near the Iowa and Wisconsin borders.
No deaths were reported from that incident and, like several other derailments that have resulted in explosions and fires in recent years, it occurred in a rural area.
Mr. Weisner and others fear it is a matter of time before a much higher-profile incident occurs in Chicago or some other big city where the death toll could be significant.
Shortly after he finished, an oil train moved past Halsted Station, whose tracks are flanked by high-rise apartment buildings.
Oil trains move throughout the Great Lakes region after getting filled with Bakken crude, often ending up on the East Coast.
Chicago and the rest of the Great Lakes region is “the heart of the country,” Mr. Weisner said.
“We’re always going to be at one of the highest levels of exposure,” the Aurora mayor said. “There’s no doubt about it.
This July 7, 2013, photo shows fire fighters watering smoldering rubble in Lac Megantic, Que., after a runaway train derailed causing explosions that killed 47 people and leveled the town’s business district. ASSOCIATED PRESS
Environmental activists such as Josh Mogerman, spokesman for the Natural Resources Defense Council’s Great Lakes regional office in Chicago, put the risk in more graphic terms.
“Welcome to the Bomb Train Capital of America,” he told reporters outside a coffee shop at West Maxwell and Halsted streets, three blocks north of the train station where Mr. Weisner would speak moments later.
“Of all the suite of issues I work on for the NRDC, this is the scariest,” Mr. Mogerman said. “These are moving targets going through very, very densely populated areas.”
Tony Phillips is an artist who lives in a condominium adjacent to Chicago’s Halsted Station.
He said he can hear “the rip of noise” and feel his building shudder as oil trains come by, often in the wee hours of the morning. He said he feels a “slosh effect” in the flooring from the oscillating weight of crude if he gets up in the middle of the night.
“That’s a little spooky,” Mr. Phillips said.
He and others want reforms, tighter rules, and more robust train cars, if nothing else. Some efforts are being made through tighter regulations, but critics claim they’re either not enough or being phased in too slowly.
Fracking boom
Tony Phillips points to the condo in Chicago where he lives on the other side of the tracks at the Halsted Station, where oil trains pass by. THE BLADE/TOM HENRY
Lora Chamberlain, spokesman for Frack Free Illinois and a new coalition called Chicagoland Oil By Rail, said vapor removal should be on the list of priorities to help mitigate the risk.
In a May 7, 2014, order, the U.S. Department of Transportation called for state emergency responders to receive more information about railroad routes handling 1 million gallons or more of Bakken crude oil per week because the number and type of railroad accidents “is startling.”
In 2013, America moved 8.3 billion barrels (348.6 billion gallons) of crude oil via pipeline — nearly 29 times the 291 million barrels (12.2 billion gallons) moved by rail, according to data from the Association of Oil Pipelines and the Association of American Railroads.
Safety experts see North America at a turning point because of the oil and gas industry’s rapid increase in hydraulic fracturing of shale bedrock, a process commonly known as “fracking” that the U.S. Energy Information Administration predicts will remain strong for at least the next 30 years.
Fracking has occurred commercially since the 1950s. The game-changer occurred less than a decade ago, when a technique developed to combine horizontal drilling with fracking made it economical to go after vast reserves of previously trapped oil and natural gas worldwide — including in eastern Ohio and western Pennsylvania, where the Utica and Marcellus shale regions meet.
Rail traffic
Railroads moved 493,126 tank-car loads of oil in 2014, a nearly 5,200 percent increase over the 9,500 tank cars that hauled oil before the fracking boom began to hit its stride in many parts of North America in 2008, according to the U.S. Department of State. Before the fracking boom, rail shipment of crude was rare and generally confined to a few isolated corridors where pipelines hadn’t been built.
Overall domestic crude production has risen 70 percent during that same period. U.S. Energy Information Administration figures show domestic oil produced at a rate of 8.5 million barrels a day in 2014, up from 5 million barrels a day in 2008.
Mogerman | THE BLADE/ BRIAN BUCKEY
This year, crude is expected to be produced at a rate of 9 million barrels a day, just shy of its peak rate of 9.6 million barrels a day in 1970, according to the Energy Information Administration.
“While pipelines transport the majority of oil and gas in the United States, recent development of crude oil in parts of the country under-served by pipeline has led shippers to use other modes, with rail seeing the largest percentage increase,” a Government Accountability Office report said. “Although pipeline operators and railroads have generally good safety records, the increased transportation of these flammable hazardous materials creates the potential for serious accidents.”
The agency cited a need for better U.S. Department of Transportation rules on flammability of products shipped by rail and a greater emphasis on emergency preparedness, “especially in rural areas where there might be fewer resources to respond to a serious incident.”
In its 2015 forecast, the Association of American Railroads contends railroads “are making Herculean efforts” to improve “an already safe nationwide rail network” now crisscrossing some 140,000 miles of the country.
The trade association said freight railroads plan to spend a record $29 billion in 2015 — a staggering $3 million an hour or about $79 million a day — to rebuild, maintain, and expand America’s rail network. Much of the money will go toward new equipment and locomotives, new track and bridges, higher tunnels, and newer technology.
Freight railroads are expected to hire 15,000 more people this year, continuing its upward hiring trend for an industry that employs 180,000 people, the association said.
While considering safety reforms, Congress must ensure that “any changes to public policy still allow railroads to continue private infrastructure spending and other network investments needed to meet customer demand,” the industry group said.
BNSF Railway carried the Hess Corp.-owned rail car, which carried highly volatile Bakken crude oil from North Dakota and appears to have followed the law.
President Barack Obama weighed and rejected using executive authority to curb the transport of this explosive crude oil, rich in butane and propane, because he decided North Dakota state law should be the controlling authority. But the law North Dakota passed in December and went into effect just last month, only requires less than 13.7 pounds-per-square-inch vapor pressure inside the tanker, despite explosions at lower pressures.
That’s almost 40 percent more than the average vapor pressure among the 63 tanker cars that exploded July 6, 2013, at Lac-Megantic, Quebec. That disaster killed 47 people, some of whom could not be found because they were vaporized, and is driving recent federal and state rail car regulations.
According to an Albany, N.Y., Times Union investigation, the average vapor pressure among 72 tanker cars in the Lac-Megantic train was 10 psi.
Hess Corp. tested the crude just before loading at 10.8 psi, according to Associated Press reporters Matthew Brown and Blake Nicholson, in their follow-up story about the derailment at Heimdal, N.D.
While federal regulations only require flash point and boiling point to be measured, North Dakota now requires vapor pressure be measured. But measuring and labeling the danger does not make transporting it safe.
The U.S. Department of Transportation’s two divisions, the Federal Railroad Administration and the Pipeline and Hazardous Materials Safety Administration, are the regulating authorities overseeing railway transport of crude oil. Generally, the FRA is responsible for train car and rail safety, while the PHMSA inspects the proper testing of the oil. That determines the oil’s proper classification and its proper “packaging” in pressurized cars and their labeling.
Other PHMSA duties include checking shipping documents to see if the shipper has self-certified the procedures properly as well as employee safety and handling training.
The U.S. DOT initiated “Operation Safe Delivery” in August 2013, in reaction to the Lac-Megantic incident, although the Bakken oil boom dates to 2008.
A federal rule-making process also began in August 2013. Those rules went into effect last week.
PHMSA, as part of Operation Safe Delivery, took several samples of Bakken crude oil from rail-loading facilities, storage tanks and pipelines used to load rail cars. Several also were collected from cargo tanks.
The first set of samples were taken August through November 2013 and the second set February through May 2014.
The first set showed psi vapor pressure among a dozen samples ranging from 7.7 psi to 11.75 psi.
A second set of 88 samples showed vapor pressure ranging from 10.1 psi to 15.1, with the average at about 12 psi.
Only six of the 88 samples were at or exceeded North Dakota’s 13.7 psi. This means shippers are not required to treat most of the crude generated from the Bakken oil formation before loading it onto cars.
The “Operation Safe Delivery Update,” available on the PHMSA website, also gives test results for propane, sulphur, hydrogen sulfide, methane and butane content.
The conclusions in the Operations Safe Delivery Update, which was not dated, are:
“Bakken crude’s high volatility level — a relative measure of a specific material’s tendency to vaporize — is indicated by tests concluding that it is a ‘light’ crude oil with a high gas content, a low flash point, a low boiling point and high vapor pressure …
“Given Bakken crude oil’s volatility, there is an increased risk of a significant incident involving this material due to the significant volume that is transported, the routes and the extremely long distances it is moving by rail… These trains often travel over a thousand miles from the Bakken region to refinery locations along the coasts…”
And although the report states, “PHMSA and FRA plan to continue … to work with the regulated community to ensure the safe transportation of crude oil across the nation,” the new rules that went into effect last week did nothing about regulating vapor pressure.
Instead, the rules phase out weaker and older pressurized tanker cars, the DOT-111, by 2020, and phase in CPC-1232 cars.
So far, at least four derailments of CPC-1232 cars carrying Bakken oil have exploded:
March 5 in Galena, Ill.;
Feb. 1 in Mount Carbon, W.Va.;
Feb. 15 near Timmons, Ontario; and
Last year in Lynchburg, Va.
Experts in various news articles and public comment submitted during the federal rule-making stated the way to make transport safe is to refine the crude before shipping. That would involve building refineries near the extraction point, which experts pointed out would be expensive.
In a Sept. 26, 2014, story, Railway Age contributing editor David Thomas applauded North Dakota for “using state jurisdiction over natural resources to fill the vacuum created by the federal government’s abdication of its constitutional responsibility for rail safety and hazardous materials.”
But Thomas admitted the state law on crude treatment would reduce the danger only slightly.
“Simply put, North Dakotan crude will have to be lightly pressure-cooked to boil off a fraction of the volatile ‘light ends’ before shipment,” Thomas said. “This conditioning lowers the ignition temperature of crude oil — but not by much. It leaves in solution most of the culprit gases, including butane and propane. Even the industry itself says conditioning would not make Bakken crude meaningfully safer for transportation, though it would make the state’s crude more consistent from one well to another.”
“The only solution for safety is stabilization, which evaporates and re-liquifies nearly all of the petroleum gases for separate delivery to refiners,” Thomas said.
He points out owners and shippers in the Eagle Fork formation in Texas, voluntarily stabilize their crude before shipping. It’s more volatile than Bakken crude.
“So far, stabilized Eagle Fork crude has been transported by tank car as far away as Quebec City, without the fireballs that have plagued the shipment of unstabilized Bakken crude,” Thomas said. “The Texan gases are liquefied and piped underground to the state’s Gulf Coast petrochemical complex for processing and sale.”
Keeping the volatile gases in solution during shipping, while dangerous, is profitable.
Thomas said North Dakota has no nearby petrochemical plants, which “explains the oil industry’s collective decision not to extract the otherwise commercially valuable gases from North Dakota crude oil. Instead, most of the explosive gases remain dissolved in the unstabilized Bakken oil for extraction after delivery to distant refineries.”
The PHMSA, however, requires butane and propane be removed from the crude before it is injected into pipelines, Thomas said.
Comments to the federal rule-making pointed out Bakken oil is made more dangerous still by corrosive chemicals used in the fracking process. The crude is further treated with chemicals to make the molasses-like consistency easier to pump.
Severe corrosion to the inner surface of the tanker cars, manway covers, valves and fittings have been recorded in various incidents, commentators said.
The lack of federal regulations is not the only problem. Enforcement is minimal because there are only 56 inspectors, according to PHMSA spokesman Gordon Delcambre.
Ten of those have been assigned to the North Dakota Bakken oil formation region, he said.
In the PHMSA 2013 annual enforcement report, 151 cases were prosecuted and 312 civil penalty tickets were issued, resulting in $1.87 million in fines. The largest fine was $120,200.
The report did not mention what the hazardous material was in 173 of the 463 enforcement actions.
Only one enforcement action appeared to result from an inspection of “fuel oil” transport, which resulted in a $975 fine for incorrect “packaging” and failure to prove, through documents, employees had been given the required safety and hazardous material handling training.
According to BNSF Railway’s report to the state Homeland Security and Emergency Management, required by a U.S. DOT emergency order since May 2014, a range of zero-to-six trains carrying at least 1 million gallons (30,000 gallons per car or about 35 cars or more) pass through Burlington each week.
Billionaire fights to keep tar-sands oil out of state
By David R. Baker, April 29, 2015
Tom Steyer hopes to block Canada oil from the state. Photo: David Paul Morris, Bloomberg
Billionaire environmentalist Tom Steyer has a new mission
— keeping oil from Canada’s tar sands out of California.
Steyer’s NextGen Climate organization released a report Tuesday warning that an “invasion” of tankers and railcars carrying crude from the oil sands could soon hit West Coast refineries, which currently process very little Canadian oil.
Steyer, a major Democratic donor who quit his hedge fund to focus on fighting climate change, has risen to prominence as a vocal opponent of the Keystone XL pipeline extension, which would link the oil sands to American refineries on the Gulf Coast.
A train carries crude oil through Kansas City, Mo., in 2014. Environmentalist Tom Steyer’s NextGen Climate organization warns that railcars carrying oil from Canada could soon hit West Coast refineries. Photo: Curtis Tate, McClatchy-Tribune News Service
But Tuesday’s report, prepared with the Natural Resources Defense Council and a coalition of other environmental groups, notes that the oil industry is pursuing other pipeline routes that would carry tar-sands petroleum to Canada’s Pacific Coast. From there, it could be shipped to refineries in California and Washington. In California, companies have proposed five new terminals for receiving oil shipped by rail — another potential means of entry. California’s policies to fight climate change discourage but don’t prevent the use of oil-sands crude.
“Keystone is not the only way the tar sands threaten our country,” Steyer said Tuesday at an event in Oakland, releasing the report. “The owners of the tar sands are always looking for other routes to the world’s oceans and the world’s markets.”
Steyer and other environmentalists have made blocking Keystone a rallying cry in the fight against global warming, since extracting hydrocarbons from the oil sands releases far more carbon dioxide into the atmosphere than other forms of oil production. And unlike common oil, the diluted bitumen (a tar-like substance extracted from the sands) sinks in water, making spills from pipelines and tankers difficult to clean.
“It is shockingly toxic, it is extremely nasty and it takes forever to clean up,” Steyer said. “To end the risk from tar-sands oil once and for all, we need to move beyond oil to a clean energy future. Luckily, this is the kind of leadership California excels at.”
The oil industry, and the Canadian government, call the oil sands a reliable source of oil from a friendly ally. And industry representatives often note that California’s dependence on imported oil has grown in recent years, in large part because production in Alaska — once one of California’s biggest suppliers of crude — has dropped.
Steyer has devoted a sizable chunk of his personal fortune, estimated at $1.6 billion, to backing political candidates who support action on climate change and targeting those who don’t, spending $73 million in the last election cycle. He said Tuesday that he has not yet decided whether to pay for an advertising campaign against bringing oil-sands crude to the West Coast.
“I’m not 100 percent sure,” he said. “Exactly how we fight it, I don’t think we’ve determined.”
Crude from the tar sands makes up a tiny fraction of the oil processed in California refineries — less than 3 percent, according to the report. And while the amount of oil shipped into the the Golden State by rail has soared in recent years, most of that petroleum comes from North Dakota and other states where hydraulic fracturing, or fracking, has produced a glut of crude.
But oil companies have proposed two pipeline projects that would link the oil sands to the Pacific Ocean, both of them traveling through British Columbia. If built, they could lead to an additional 2,000 oil tankers and barges moving up and down the West Coast each year, according to the report. The rail terminal projects proposed in California could raise the amount of oil-sands crude processed in the state each day from the current 50,000 barrels to 650,000 barrels by 2040.
However, that outcome is hardly certain.
A California policy known as the low carbon fuel standard requires oil companies to cut by 10 percent the amount of carbon dioxide associated with each gallon of fuel they sell in the state, reaching that milestone by 2020. In addition, the state’s cap-and-trade system forces refineries to cut their overall greenhouse gas emissions. Neither policy specifically prevents refineries from using oil-sands crude, but both give oil companies a powerful incentive to use other sources of petroleum.
Anthony Swift, one of the report’s authors, said California needs to adopt more stringent emissions targets to keep out crude from the oil sands.
“These policies are a very good start,” said Swift, of the Natural Resources Defense Council. “We need to get more robust targets — for both the low carbon fuel standard and the cap — to signal to the industry that California is not going to be an option for tar-sands refining.”
David R. Baker is a San Francisco Chronicle staff writer.
