Repost from Reuters [Editor: The oil industry recommends highest-danger labeling on Bakken crude oil tank cars despite its misleading claim that Bakken is no different from other light sweet crudes. This stance puts pressure on the rail industry to come up with stronger tank cars sooner. Um… follow the money? – RS]
Oil group wants highest-danger label for Bakken rail shipments
New York, Aug 5, 2014
Aug 5 (Reuters) – A U.S. oil industry group is recommending that all crude shipped by rail from North Dakota’s Bakken fields be labeled as the most-dangerous type of oil cargo, a designation that could hasten the use of new or upgraded tank cars.
On Monday, the North Dakota Petroleum Council (NDPC) released the final results of a wide-scale study on the quality characteristics of Bakken crude, which has been involved in several fiery oil-train derailments over the past year.
The study confirmed preliminary findings released in May suggesting that Bakken was little different from other forms of light, sweet U.S. crude and posed no greater threat versus other fuels when transported by rail.
The NDPC also issued a series of recommendations following the study, however, including one urging oil-by-rail shippers to classify all Bakken crude oil as “Packing Group I” hazardous materials.
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That is the highest-risk level of a three-tiered danger assessment, and the NDPC said it was recommended “even though the majority of samples tested for the study would fall within specifications for PG (Packing Group) II.”
Current methods for testing boiling point, the key criteria for differentiating PG I and II classifications, can be inconsistent, the NDPC said. Because it typically contains a high proportion of very light hydrocarbons and petroleum gases, Bakken crude tends to boil at lower temperatures.
“The margin of error for the test methodology can result in different labs testing the same sample with values meeting both PGs. PG I has the more stringent standards and is therefore recommended to avoid further confusion,” said the NDPC report, which was prepared by industry consultants Turner, Mason & Co.
Historically the Packing Group label has made no material difference in how oil is handled on trains; its only purpose was to inform emergency responders about the cargo. The DOT-111 tank car, the model used almost exclusively to ship oil by rail, is able to transport any Packing Group. Many oil companies have been using PG I routinely simply to ensure they were compliant.
But under new regulations proposed last month by the U.S. Department of Transportation, the Packing Group determination could become a pivotal factor in determining how quickly shippers use new or upgraded tank cars that will gradually replace older-model DOT-111s long seen as flawed.
The NDPC represents major producers in the Bakken including Marathon Oil Corp, ConocoPhillips, Continental Resources and Hess.
Authorities had already begun to crack down on misclassified oil shipments after the Lac Megantic tragedy in Canada last year, when a runaway oil-train with cargo from the Bakken energy patch derailed and killed 47 people in the center of a Quebec town.
In February, the DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) fined three companies for using incorrect Packing Group labels for their Bakken cargoes. Two of them had mislabeled shipments as PG II, when in fact they should have been labeled PG I. A third company had used a PG III label rather than PG II.
The DOT rules last month said older model DOT-111 cars would not be allowed to carry Packing Group I crudes within two years, while less dangerous crudes that fall into PGs II and III could still be shipped in the older cars for three and five years.
The rules are open to public comment and may not be finalized for several months.
In its own study released last month, the PHMSA said most crude from the Bakken tested as PG I or II material – “with a predominance to PG I”. It also said the oil was “more volatile than most other types of crude,” a finding disputed by both the American Petroleum Institute and NDPC.
(Reporting by Jonathan Leff; Editing by Tom Brown)
By Kathryn A. Wolfe | 7/23/14
Anthony Foxx’s announcement follows a year-long spree of oil train crashes. | M.Scott Mahaskey/POLITICO
The Obama administration on Wednesday announced its long-awaited proposal to improve the safety of oil trains, a step meant to address a series of fiery derailments that have raised fears about the dark side of the North American energy boom.
The proposed rules include mandates for phasing out older, less-sturdy rail tank cars during the next two to five years, tightened speed limits, improved brakes and steps to address concerns that crude oil produced in North Dakota’s Bakken region is unusually volatile or flammable. The rules also include provisions that would affect the shipment of ethanol, another flammable liquid frequently transported by rail.
“We need a new world order on how this stuff moves,” Transportation Secretary Anthony Foxx told reporters in making the announcement.
“More crude oil is being shipped by rail than ever before,” Foxx said. “If America is going to be a world leader in producing energy, our job at this department is to ensure that we’re also a world leader in safely transporting it.”
The details of the White House-vetted proposal had been the subject of fierce lobbying by the oil industry, which maintains that Bakken crude doesn’t pose unusual dangers, and the railroads, which have long called for tougher tank-car standards but objected to calls for reduced speed limits. The rules would offer both industries incentives to go along — for instance, oil trains meeting the toughened standards for crashworthiness and brakes could travel as fast as 50 mph in all areas, while those that don’t could be limited to 30 mph or 40 mph.
“The fact that the proposed rule incorporates several of the voluntary operating practices we have already implemented demonstrates the railroad industry’s ongoing commitment to rail safety,” Ed Hamberger, CEO of the Association of American Railroads, said in a statement Wednesday. “We look forward to providing data-driven analyses of the impacts various provisions of the proposal will have on both freight customers and passenger railroads that ship millions of tons of goods and serve millions of commuters and travelers across the nationwide rail network every day.”
The American Petroleum Institute initially said it would review the proposal, but it later blasted out a statement rejecting “speculation by the Department of Transportation” about the safety of transporting Bakken crude.
“Multiple studies have shown that Bakken crude is similar to other crudes,” CEO Jack Gerard said. “DOT needs to get this right and make sure that its regulations are grounded in facts and sound science, not speculation.”
The DOT proposal drew initial praise from lawmakers, along with some calls to go further.
Wednesday’s rollout followed months of interim rules and voluntary agreements with the railroad and oil industries. It also came after a year-long spree of oil train crashes in communities from Quebec and North Dakota to western Pennsylvania, rural Alabama and Lynchburg, Virginia — including one that killed 47 people in the Canadian town of Lac-Mégantic last July.
Even without any fatalities so far in the U.S., oil train accidents in 2014 have already shattered records for property damage, based on POLITICO’s review of data from the federal Pipeline and Hazardous Materials Safety Administration. As of late May — a month after the Lynchburg derailment — the damage toll exceeded $10 million through mid-May, nearly triple the damage for all of 2013. The number of incidents at that point in the year — 70 — was also on pace to set a record.
Oil trains have also inspired local opposition in communities from Albany, New York, to Washington state and the San Francisco Bay area, where residents expressed alarm at finding that they had become key way stations in a network of virtual pipelines that carry oil from production hot spots like North Dakota and western Canada.
Sen. Chuck Schumer (D-N.Y.) urged DOT to see that the rules are “finalized, implemented and enforced as soon as possible.”
“These desperately needed safety regulations will phase out the aged and explosion-prone … tanker cars that are hauling endless streams of highly flammable crude oil through communities across the country and New York,” Schumer said in a statement Wednesday.
Sen. John Hoeven (R-N.D.) said the proposal “appears to be comprehensive,” adding that “we will continue to review these proposed standards to ensure they are workable and will keep our communities safe.”
But Sen. Patty Murray (D-Wash.) who chairs the Appropriations subcommittee overseeing DOT, said in a statement that “there is still more work to be done, by both regulators and industry.”
“I’m pleased that the proposed regulations address issues I outlined in the 2015 transportation spending bill, like enhanced rail tank car standards and improved classification of flammable liquids, that are much-needed steps to improve the safety of our rail system,” Murray said.
[Editor: The following studies were recommended to me by a neighbor who supports Valero’s crude by rail proposal. Both are loaded with valuable information, useful to anyone who wants facts to back up an argument for or against Valero’s project. You can download the document by clicking on the green text. Thanks, neighbor! – RS]
By David Pumphrey, Lisa Hyland, and Michelle Melton, March, 2014
Summary
In the last several years, rail has come to play an important role in the transportation of growing U.S. crude oil production. Over the last seven months, a number of serious accidents have resulted in intense review of the safety of shipping large quantities of oil by rail. The focus has been on classification of the oil, the integrity of tank cars, and rail operations. Regulatory processes have been initiated to attempt to deal with these issues in a timely manner. This issue analysis provides facts that illuminate the players, concerns, current status of regulatory action, as well as the potential issues going forward.
Further regulation of crude by rail is a near certainty, but the ultimate scope and pace remains unclear. Whether regulatory action actually slows down what has become a burgeoning transportation option for crude oil producers and refiners is an open question. It is increasingly unlikely that regulatory action—unless truly drastic—will stop shipment of crude by rail. However, moving forward, regulatory action such as phasing out older tank cars, rerouting trains, or imposing stringent requirements for testing, could impact the economics of crude by rail. [MORE – a 9-page report in PDF format]
by Anthony Andrews, Specialist in Energy Policy, February 18, 2014
Summary
The dramatic increase in U.S. crude oil production, coupled with the increase in crude oil transport by rail, has raised questions about whether properties (e.g., flammability) of these crude types—particularly Bakken crude oil from North Dakota—differ sufficiently from other crude oils to warrant any additional handling considerations. The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a Safety Alert to notify emergency responders, shippers, carriers, and the public that recent derailments and resulting fires indicate that the type of crude oil transported from the Bakken region of North Dakota may be more flammable than traditional heavy crude oil. The alert reminds emergency responders that light sweet crude oil, such as that coming from the Bakken region, pose significant fire risk if released from the package (tank car) in an accident. PHMSA has expanded the scope of lab testing to include other factors that affect proper characterization and classification of crude oil such as volatility, corrosivity, hydrogen sulfide content and composition/concentration of the entrained gases in the material.
All crude oils are flammable, to a varying degree. Further, crude oils exhibit other potentially hazardous characteristics as well. The growing perception is that light volatile crude oil, like Bakken crude, is a root cause for catastrophic incidents and thus may be too hazardous to ship by rail. However, equally hazardous and flammable liquids from other sources are routinely transported by rail, tanker truck, barge, and pipeline, though not without accident.
A key question for Congress is whether the characteristics of Bakken crude oil make it particularly hazardous to ship by rail, or are there other causes of transport incidents, such as poor maintenance practices, inadequate safety standards, or human error. [MORE – a 13-page report in PDF format]
A warning placard on a tank car carrying crude oil. | Associated Press
By NATASHA KHAN, PublicSource, July 13, 2014
More trains carrying crude oil to East Coast refineries mean a greater risk of accidents. Derailments in Pennsylvania and throughout the country are a signal to some that an accident could be disastrous.
Why is more crude oil moving through Pennsylvania?
North America is now the biggest producer of crude oil in the world, partly as a result of fracking in North Dakota and other Western states. Without pipelines to move the oil, much of it has been pushed onto the rails. In 2013, U.S. railroads carried more than 40 times what they carried in 2008. Refineries processing much of the crude from the Bakken formation in the West are in the Philadelphia area.
Are these trains dangerous?
As crude-by-rail traffic increased, so did its accidents. Some lawmakers and public safety groups are concerned that as production surges, people near railroad tracks are exposed to more danger. And some believe the crude boom has outpaced the necessary regulations to ensure safety.
There have been at least 12 significant derailments involving crude since May 2013 in North America. Some involved explosions, evacuations, environmental damage and injuries. The most devastating was in Lac-Mégantic, Quebec, in July 2013, when 47 people died after a train carrying crude exploded. Since January, Pennsylvania has had derailments involving crude in Philadelphia, Vandergrift and McKeesport. There were no injuries in any of the accidents.
How much crude oil do these trains carry?
Right now Norfolk Southern and CSX, the major railroads in the state, move as many as eight trains of crude oil a day combined through the state.
Dubbed “virtual pipelines,” these trains can have more than 100 tank cars and can carry millions of gallons of crude.
Is Bakken crude more volatile than other types of oil?
North Dakota Bakken crude is potentially more volatile, corrosive and flammable than other kinds of crude oil. Investigations found that the Bakken crude that exploded in Quebec was classified as a less dangerous type of oil. In February, the U.S. Department of Transportation issued an emergency order requiring testing of all Bakken crude to determine its explosive nature.
Are other types of crude oil dangerous?
Other types of crude from the U.S. and Canada also could pose a threat. All crude oil is flammable and can cause environmental damage, Christopher Hart, acting National Transportation Safety Board Chairman, told the Associated Press in June.
What’s wrong with the rail cars?
Sometimes referred to as the “Ford Pinto of railcars,” the DOT-111 tank cars used to ship crude have been known to be a safety hazard for decades, according to federal safety investigators. Designed in the 1960s, they are prone to puncture and “catastrophic loss of hazardous materials” when trains derail, according to the NTSB.
The derailments have caused an outcry by state and federal officials and safety groups demanding that the cars be taken off the tracks. Canada has already ordered railroads to stop using them by 2017, but U.S. regulators have been slow to act. The U.S. DOT did advise railroads in May to stop using the cars to carry crude oil. The White House is reviewing new standards for tank cars, but it could take months before rules are in place.
How are trains carrying crude oil regulated?
Two federal entities regulate railroads carrying crude: The Federal Railroad Administration (FRA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA). The FRA has about 400 inspectors who sometimes work with state inspectors. In Pennsylvania, the state’s Public Utility Commission does spot inspections of tracks and rail equipment.
Emergency planning is largely left up to counties. A state agency oversees 67 Local Emergency Planning Committees, which can request general information from railroads about hazardous materials coming through their counties. That information is not public.
Can you find out when crude oil trains come through your neighborhood?
Officially, no. Railroads are not required to share information about hazardous materials under federal law. Norfolk Southern and CSX, for example, said they don’t give out that information, citing possible security incidents and competition.
In May, the DOT said it no longer viewed information on crude oil from the Bakken as security sensitive. The agency told railroads with trains carrying more than 1 million barrels of Bakken crude to give the information to states. At least six states, including Washington, California and Virginia, made the information available. Pennsylvania didn’t. The Pennsylvania Emergency Management Agency refused to release the information to PublicSource. The agency denied our Right-to-Know request, calling the information “confidential” and “proprietary.”
Bakken and other crude oils are believed to be shipped through Pittsburgh and other Pennsylvania cities on a regular basis on their way to Philadelphia refineries. A spokeswoman for the Pennsylvania Public Utility Commission told PublicSource that Bakken crude is shipped through Pittsburgh.
What has been done to improve safety?
U.S. regulators asked railroads to comply with a number of voluntary actions. The railroads agreed to slow crude trains to no more than 40 mph in high-risk urban areas. (However, a train that derailed in Lynchburg, Va., in April was traveling at just 24 mph.)
Recent proposed rules for crude oil, including new standards for tank cars, drew comments from the public representing more than 100,000 people.
In March, CSX agreed to give PEMA access to its real-time monitoring system that tracks crude’s movement through the state. Cory Angell, the agency’s spokesman, said it is working with Norfolk Southern on a similar agreement.
Are first responders prepared for a significant derailment in Pennsylvania?
Daniel Boyles, the emergency services coordinator for Blair County, told PublicSource he thinks railroads are doing everything in their power to prevent accidents. However, he said, first responders need more training. Trains carrying Bakken crude roll through his county twice a week, he said.
Emergency officials in Beaver, Allegheny and Dauphin counties said that awareness has increased and railroads have given emergency responders more training.
A PEMA spokesman said the state is prepared in the case of a major derailment. He added that Pennsylvania will soon use a DOT grant to train county hazmat teams and first responders.
Who doesn’t think first responders are prepared?
“No community is prepared for a worst-case event,” Deborah Hersman, former chairwoman of the National Transportation Safety Board, told a Senate subcommittee in April.
Under voluntary safety measures effective July 1, railroads will contribute $5 million for training for emergency responders. And they will develop a list of emergency-response resources in case of a derailment.
But federal safety officials have questioned whether voluntary actions are enough. Currently, railroads don’t have to provide comprehensive emergency plans for the crude oil being transported. That’s what’s needed, Hersman said.
In a Jan. 23 letter to federal regulators, she said that without comprehensive crude oil response plans “(rail) carriers have effectively placed the burden of remediating the environmental consequences of an accident on local communities along their routes.”
Which officials are talking about this in Pennsylvania?
Sen. Bob Casey, D-Pa., endorsed a bill he said would boost safety. The bill would include $3 million for track inspections and hire 20 new inspectors.
Philadelphia Mayor Michael Nutter backed a proposal to charge a federal freight fee to crude-oil producers and industrial consumers. The money would be used to improve tracks.
Christina Simeone, director of PennFuture’s energy center, said other states have shown leadership on the issue — but not Pennsylvania.
New York Gov. Andrew Cuomo commissioned a safety report for his state. The report laid out actions the state should take. Minnesota lawmakers allocated $6.4 million for more inspectors, specialized training for first responders and fixes for highway-rail grade crossings along crude routes.
Republican Gov. Tom Corbett has been silent about the safety issue, said Simeone, who commented that there is interest in “minimizing the issue” because of concerns about the refinery business in Philadelphia and gasoline prices in the region.
Pittsburgh Mayor Bill Peduto has not been part of the conversation. In a recent meeting with PublicSource, Peduto said that he is “aware of the reality of what is coming through.” In the case of an accident, Pittsburgh could call on the PA Region 13 Task Force, he said. The task force is an initiative that allows counties to pull resources from the entire region in case of an emergency.
