Repost from Politico

The dark side of the oil boom

By Kathryn A. Wolfe and Bob King | 6/18/14

Communities throughout the U.S. and Canada are waking up to the dark side of North America’s energy boom: Trains hauling crude oil are crashing, exploding and spilling in record numbers as a fast-growing industry outpaces the federal government’s oversight.

In the 11 months since a runaway oil train derailed in the middle of a small town in Quebec, incinerating 47 people, the rolling virtual pipelines have unleashed crude oil into an Alabama swamp, forced more than 1,000 North Dakota residents to evacuate, dangled from a bridge in Philadelphia and smashed into an industrial building near Pittsburgh. The latest serious accident was April’s fiery crash in Lynchburg, Virginia, where even the mayor had been unaware oil was rolling through his city.

(WATCH: News coverage of recent oil train spills)

A POLITICO analysis of federal data from more than 400 oil-train incidents since 1971 shows that a once-uncommon threat has escalated dramatically in the past five years:

• This year has already shattered the record for property damage from U.S. oil-train accidents, with a toll exceeding $10 million through mid-May — nearly triple the damage for all of 2013. The number of incidents so far this year — 70 — is also on pace to set a record.
• Almost every region of the U.S. has been touched by an oil-train incident. These episodes are spreading as more refineries take crude from production hot spots like North Dakota’s Bakken region and western Canada, while companies from California and Washington state to Missouri, Pennsylvania, Virginia and Florida build or expand terminals for moving oil from trains to barges, trucks or pipelines.
• The voluntary reforms that DOT and industry have enacted so far might not have prevented the worst accidents. For example, the department announced a voluntary 40 mph speed limit this year for oil trains traveling through densely populated areas, but DOT’s hazardous-incident database shows only one accident in the past five years involving speeds exceeding that threshold. And unlike Canada’s transportation ministry, DOT has not yet set a mandatory deadline for companies to replace or upgrade their tank cars.

Starting this month, DOT is requiring railroads to share more timely information with state emergency managers about the trains’ cargoes and routes. But some railroads are demanding that states sign confidentiality agreements, citing security risks.

Transportation Secretary Anthony Foxx says each step is a move in the right direction.

“There’s been such exponential growth in the excavation of this crude oil that it’s basically outrun our normal systems,” Foxx said in an interview. But Foxx, who became secretary four days before the Quebec disaster, added: “We’ve been focused on this since I came in. … We’re going to get this right.”

Defending the voluntary speed limits, Foxx said: “You have to understand that all these pieces fit together. So a stronger tank car with lower speeds is safer than a less strong tank car at higher speeds.”

Members of Congress are joining the call for more action.

“The boom in domestic oil production has turned many railways and small communities across our country into de facto oil pipelines, and the gold-rush-type phenomenon has unfortunately put our regulators behind the eight ball,” said Sen. Chuck Schumer (D-N.Y.), who has been pushing for stricter safety and disclosure rules. “It has become abundantly clear that there are a whole slew of freight rail safety measures that, while for many years have been moving through the gears of bureaucracy, must now be approved and implemented in haste.”

Sierra Club staff attorney Devorah Ancel said the rising damage toll should “ring alarm bells in the minds of our decision-makers, from cities all the way up to Congress and the president.”

“Our fear is that the regulators are being pushed over by the industry,” she said.

Like the oil boom itself, the surge in oil-train traffic has come much faster than anyone expected. Meanwhile, the trains face less onerous regulations than other ways of moving oil, including pipelines like TransCanada’s Keystone XL project.

Keystone, which would carry oil from Alberta to the Gulf Coast, has waited more than five years for a permit from the Obama administration while provoking a national debate about climate change. But no White House approval was needed for all the trains carrying Canadian oil into the United States. In fact, freight railroads in the U.S. are considered “common carriers” for hazardous materials, meaning they can’t refuse to ship it as long as it meets federal guidelines.

The oil-trains issue is bringing a flurry of foot traffic to the White House Office of Management and Budget these days as railroad and oil industry representatives press their case on what any new regulations should look like. Representatives of the country’s leading hauler of Bakken crude, Warren Buffett’s BNSF Railway, met with OMB regulatory chief Howard Shelanski on June 3 and June 6, and joined people from railroads including CSX, Union Pacific and Norfolk Southern in another meeting June 10.

DOT says it has been working to address the problem since as far back as September 2012, and that efforts accelerated after Foxx took over in July. His chief of staff, Sarah Feinberg, holds a meeting each morning on the issue, and she and Foxx meet regularly with top leadership at the two key DOT agencies that oversee railroads and the transport of hazardous materials.

The voluntary agreements that Foxx’s department has worked out with the freight rail industry and shippers address issues like track inspections, speed limits, brakes and additional signaling equipment. Those are all “relevant when dealing with reducing risk” from oil train traffic, the freight rail industry’s main trade group said in a statement.

“The number one and two causes of all main track accidents are track or equipment related,” the Association of American Railroads said. The statement added, “That is how the industry came up with the steps in the voluntary agreement in February aimed at reducing risks of these kinds of accidents when moving crude oil by rail.”

Meanwhile, the oil train business is primed to get bigger. Even TransCanada might start using rail to ship oil to the U.S. while waiting for Keystone to get the green light, CEO Russ Girling said in an interview in May — despite agreeing that trains are a costlier and potentially more dangerous option.

“If anybody thinks that is a better idea, that’s delusional,” Girling said.

In fact, the State Department estimated this month that because of the risks of rail compared with pipelines, an additional 189 injuries and 28 deaths would occur every year if trains end up carrying the oil intended for Keystone.

But environmentalists who warn about the dangers of crude-by-rail say it would be wrong to turn the issue into an excuse to approve Keystone. For one thing, the Texas-bound pipeline would replace only part of the train traffic, which has spread its tendrils all across the U.S. “There are no pipelines that run from North Dakota to the West Coast,” the Sierra Club’s Ancel said.