Tag Archives: Tank car retirement

Bakken Crude, CPC-1232, DOT-111, Oil Industry, Oil prices, Oil producers, Rail traffic, Refinery safety, Tank car retirement, Tank car retrofit

Wall Street Journal: Fewer Oil Trains Ply America’s Rails

Repost from The Wall Street Journal

Fewer Oil Trains Ply America’s Rails

Safety concerns, low crude prices depress train traffic

By Alison Sider, April 6, 2015 3:30 p.m. ET
In March, oil-train traffic was down 7% from a year earlier. The slowdown comes amid safety concerns. Photo: David Paul Morris/Bloomberg News

The growth in oil-train shipments fueled by the U.S. energy boom has stalled in recent months, dampened by safety problems and low crude prices.

The number of train cars carrying crude and other petroleum products peaked last fall, according to data from the Association of American Railroads, and began edging down. In March, oil-train traffic was down 7% on a year-over-year basis.

Railroads have been a major beneficiary of the U.S. energy boom, as oil companies turned to trains to move crude to refineries from remote oil fields in North Dakota and other areas not served by pipelines. Rail shipments of oil have expanded from 20 million barrels in 2010 to just under 374 million barrels last year, according to the U.S. Energy Information Administration.

About 1.38 million barrels a day of oil and fuels like gasoline rode the rails in March, versus an average of 1.5 million barrels a day in the same period a year ago, according to a Wall Street Journal analysis of the railroad association’s data.

Oil-train traffic declined 1% in the fourth quarter of 2014 as crude-oil prices started to tumble toward $50 a barrel. More recently, data from the U.S. Energy Department show oil-train movements out of the prolific Bakken Shale in North Dakota have leveled off as drillers there have begun to pump less, though oil-train shipments from the Rocky Mountain region have risen.

WSJ_Shipped-By-US_Rail_2014-15The slowdown comes as federal safety experts call for stronger tank cars. On Monday the National Transportation Safety Board recommended an aggressive five-year schedule for phasing out or upgrading older railcars used to haul crude-oil. A string of oil train accidents in recent months have resulted in spills, intense fires and community evacuations. The NTSB said railcars in use today rupture too quickly and aren’t fire-resistant enough.

A few incidents have involved more modern tank cars—the CPC-1232 model. The NTSB also said the new railcar’s design isn’t sturdy enough. “We can’t wait a decade for safer rail cars,” said NTSB Chairman Christopher A. Hart Monday in a letter to federal transportation regulators.

Opponents of a fast phaseout have said that if tougher standards are introduced too quickly it will create a railcar shortage and make some oil train operations unprofitable.

Many refiners, including Philadelphia Energy Solutions, say they are still committed to shipping oil on trains. Chief Executive Phil Rinaldi in December said he likes that railroads don’t require long-term contractual agreements the way pipelines do. That allows his plant managers to buy crude only when it’s needed.

With pipelines, “you have to pay for that transit whether it makes sense or not,” Mr. Rinaldi said. “With rail, that’s not the case.”

Railroad operators have warned investors that their outlook for transporting crude is slightly weaker than it was last year, said David Vernon, a rail analyst at Sanford C. Bernstein & Co.

BNSF Railway Co., which is responsible for about 70% of U.S. oil-train traffic, operated as many as 10 trains a day last year, but is averaging nine a day now, a spokesman said.

Crude By Rail, DOT-111, Ethanol, Federal Regulation (U.S.), National Transportation Safety Board, Oil Industry, Tank car retirement, Tank car retrofit

NTSB: Equip oil trains with fire protection within 5 years

Repost from McClatchyDC
[Editor:   Bloomberg adds coverage of NTSB comments on the inadequacies of the CPC-1232 tank cars.  – RS]

NTSB: Equip oil trains with fire protection within 5 years

By Curtis Tate, McClatchy Washington Bureau, April 6, 2015
US NEWS RAILSAFETY-CA 2 SA
A tanker truck is filled from railway cars containing crude oil on railroad tracks in McClellan Park in North Highlands on Wednesday, March 19, 2014. (Randall Benton/Sacramento Bee/MCT)

The National Transportation Safety Board on Monday called for the nation’s fleet of railroad tank cars hauling crude oil and ethanol to be equipped with fire protection within five years in an effort to eliminate the large explosions associated with recent accidents.

The NTSB cited the performance of tank cars in four recent oil train derailments, two in the U.S. and two in Canada, where fire exposure weakened the bare steel tanks and increased the pressure inside the cars beyond what they were designed to sustain.

The agency called on the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration to require tank cars carrying oil and ethanol to be equipped with a ceramic blanket and high-capacity pressure-relief devices.

The NTSB also for the first time endorsed a five-year timeline for retrofitting or replacing the tank cars, including the goal that 20 percent of the fleet be made compliant per year. Industry groups representing oil producers and refiners have pushed for a 10-year timeline.

“We can’t wait a decade for safer rail cars,” NTSB Chairman Christopher Hart said in a statement. “The industry needs to make this issue a priority and expedite the safety enhancements, otherwise, we continue to put our communities at risk.”

In January, the NTSB added tank cars to its “ Most Wanted” list of safety improvements. But at the time, Hart wouldn’t say what the NTSB considered an appropriate timeline for making the fixes.

The independent board, which has only advisory power, has been recommending upgrades to the nation’s workhorse tank car, called the DOT-111, for more than 20 years.

The car’s design became an issue after railroads across North America began hauling exponentially larger volumes of crude oil and ethanol. An oil train derailment that killed 47 people in Quebec in July 2013 galvanized a new effort on both sides of the border to improve the cars.

In February, the Transportation Department sent a package of proposed regulations to the White House Office of Management and Budget for review. They include requirements for thermal protection on the tank cars and are similar to a tank car design the Canadian government proposed last month. The final rule is scheduled for publication next month.

In the meantime, four trains carrying different types of crude oil derailed in the span of four weeks. The derailments, two in Ontario, and one each in West Virginia and Illinois, led to spills, fires and evacuations.

Oil industry groups have called for more attention to preventing derailments and less emphasis on the cars and what’s in them. But the tank car improvements have widespread support from lawmakers, regulators, mayors and governors, the rail industry and the NTSB.

In statements Monday, Sen. Ron Wyden and Rep. Peter DeFazio, both Oregon Democrats, praised the NTSB’s recommendations.

“I am very happy to see that they recommended thermal protection for cars carrying hazardous materials, an aggressive retrofit or replacement schedule, and a transparent, publicly available reporting mechanism to report tank car replacement,” DeFazio said.

“It is my hope that the next step from the administration will be a strong DOT rule that will get these cars upgraded quickly, or get them off the tracks completely,” Wyden said.

The railroad industry’s leading advocacy group in Washington echoed those calls.

“The freight rail industry supports an aggressive retrofit or replacement program and believes final regulations on new tank car standards will provide certainty and chart a new course in the safer movement of crude oil by rail,” said Ed Greenberg, a spokesman for the Association of American Railroads, in a statement.

Bakken Crude, CPC-1232, Crude By Rail, Derailment, DOT-111, Explosion, Federal Regulation (U.S.), Insurance and liability, Massive increase in crude-by-rail, Oil industry lobby, Oil stabilization, Pipeline transport, Rail industry lobby, Rail routing, Tank car design, Tank car retirement, Tar sands crude, Train speed, Volatile gases

Why more pipelines won’t solve the problem of oil-train explosions

Repost from Grist

Why more pipelines won’t solve the problem of oil-train explosions

By Ben Adler on 6 Apr 2015
Shutterstock | Shutterstock
In the last few years, the grassroots environmental movement has energetically opposed constructing big new oil pipelines in North America. Their opposition is understandable, since, on a global level, fossil fuel infrastructure encourages fossil fuel consumption, contributing to climate change, and, on a local level, oil pipelines leak and explode. But conservatives have been delighted to argue that greens are endangering the public and being short-sighted. Oil that comes out of the ground has to get to market somehow, and currently a huge amount of it is being shipped on freight trains. The result? An epidemic of oil train derailments, causing spills and even deadly explosions.

Is it fair to blame activists for this? Should climate hawks throw in the towel and accept Keystone XL as the lesser evil?

No and no — and I’ll explain two key reasons why.

First: Much of the oil criss-crossing the U.S. on trains is coming from North Dakota and traveling out along east/west routes where there aren’t even any proposals for big new pipelines. You can’t blame activists for that. Keystone would connect the Alberta tar sands to refineries on the Gulf Coast, but wouldn’t do anything to help move North Dakota’s fracked bounty. Right now rail is the main option for that. “Keystone XL would enable tar-sands expansion projects, but is unlikely to reduce crude-by-rail,” says Anthony Swift, an attorney at the Natural Resources Defense Council. But don’t just take his word for it. Oil-loving, Keystone-supporting North Dakota Sen. Heidi Heitkamp (D) makes the same point: “I am not someone who has ever said that the Keystone pipeline will take crude off the rails. It won’t,” Heitkamp said in November. “Our markets are east and west and it would be extraordinarily difficult to build pipelines east and west.”

Second: Climate activists are supporting something that actually would go a long way toward solving the problem of dangerous oil trains: strict regulation of those trains.

In the long term, of course, climate hawks want to keep the oil in the soil, and they are pushing for structural changes — like an end to federal leases for oil drilling offshore and on federal land — that would reduce the amount of oil we produce in the U.S. But in the short term, they’re not just being unrealistic and saying “no” to all oil transport — they’re pushing to make that transport safer.

The Department of Transportation has the authority to impose rules on oil trains’ design and speed, which would reduce the risk of them leaking and exploding when they derail or crash. DOT made an initial proposal in July of last year and is expected to finalize it in May. Green groups have been disappointed by the proposal, though — both the weakness of the rules and the slowness of the timetable. If all goes according to plan, the rules would be implemented later this year, but their requirements would still take years to phase in.

Fortunately there’s now a stronger proposal that climate hawks can get behind: a new Senate bill that would impose stiffer requirements than those being proposed by the Obama administration. Sen. Maria Cantwell (D-Wash.) introduced the Crude-By-Rail Safety Act late last month, along with three Democratic cosponsors: Tammy Baldwin (Wis.), Patty Murray (Wash.), and Dianne Feinstein (Calif.). It got immediate backing from big green groups.

Here are four critical things that need to be done to make oil trains safer, three of which are included in Cantwell’s bill:

  1. Stop the transport of oil in an old model of rail car, called the DOT-111, that was designed back in the ‘60s. DOT-111s “have a number of manufacturing defects that make them much more likely to rupture in a derailment,” says Swift. So environmentalists want to get 111s off the rails immediately. That’s exactly what Cantwell’s Senate bill would do. DOT, in contrast, proposes to delay that transition. “DOT only slowly phases out 111s by 2017 and the rest of fleet by 2020, and we think the industry is pushing to move the phaseout to 2025,” says Devorah Ancel, an attorney at the Sierra Club. “It’s very concerning.”
  2. Require steel jackets around vulnerable rail cars that carry oil. DOT would require freight companies to transition to a newer, sturdier model of car called the CPC-1232, but even those cars aren’t sturdy enough — they have already been involved some fiery accidents, including one in West Virginia in February and one in Illinois in March. Cantwell’s bill would go further, requiring CPC-1232s to be jacketed, and then calling for “new tank car design standards that include 9/16th inch shells, thermal protection, pressure relief valves and electronically-controlled pneumatic brakes.”
  3. Clamp down on the amount of flammable gases permitted in the oil on train cars. Oil fracked in North Dakota’s Bakken shale carries more volatile gases with it than your average crude, making explosions more common. DOT’s proposed rules do nothing to curb that. Cantwell et al would limit the volatility of the oil being transported and increase fines for violations.
  4. Reduce train speeds. Currently, the speed limit for crude-by-rail is 50 mph, and that’s voluntary. DOT would make a speed limit mandatory, but would only lower it to 40 mph, and even that may only apply in “high threat urban areas” with more than 100,000 people. “The question of speed limits is crucial,” says Swift. “You need to dramatically reduce the speed at which these trains are moving.” Swift notes that CPC-1232s may puncture when going above 18 mph, but environmental groups stop short of explicitly calling for that speed limit. NRDC says, “Crude oil unit trains must adhere to speed limits that significantly reduce the possibility of an explosion in the event of a derailment.” That would presumably fall somewhere between 18 mph and 40 mph. Stricter speed limits is the one major needed reform that the Senate bill doesn’t address.

Cantwell’s bill also doesn’t compensate communities when accidents happen (the DOT proposal doesn’t either). But the bill’s sponsors intend to introduce future legislation to establish an oil spill liability trust fund paid for by fees from the companies moving crude oil. “Taxpayers should not be on the hook to bail out communities after a disaster caused by private companies,” said Cantwell.

It’s hard to imagine this bill passing both houses of an intensely pro-business, pro–fossil fuel Republican Congress. But Senate Democrats hope that by raising the issue they can build public awareness and support for stronger rules.

The bill could put pressure on the Obama administration to adopt the strongest possible version of its proposal. During the public comment period on DOT’s draft rules, the oil and rail industries argued for the weakest rules under consideration. Now the plans are being reviewed by the White House Office of Management and Budget, which tends to scale rules back in order to reduce their cost to business. Representatives from the oil and rail industries have been meeting with OMB to lobby for weaker rules.

Late last month, Chuck Schumer (N.Y.), who will take over as Senate Democratic leader after Harry Reid (Nev.) retires next year, announced that he and six colleagues — including Baldwin and Democratic Whip Dick Durbin (Ill.) — had sent a letter to OMB Director Shaun Donovan asking him to ensure “the rule is strong and comprehensive and that it is finalized as quickly as possible.” If nothing else, Schumer’s push and Cantwell’s bill will set up a countervailing force to the industry voices that the Obama administration is listening to.

The administration should protect public safety without being pushed by fellow Democrats — in this case, it has the power to do so without congressional approval. There is definitely a clear alternative to the false choice between pipelines and dangerous oil trains.

Bakken Crude, Crude By Rail, Derailment, DOT-111, Emergency Readiness & Response, Federal Regulation (U.S.), Fire, Positive Train Control, Rail inspection, Rail routing, Tank car retirement, Tank car retrofit, Train braking systems, Train length, Train speed

Benicia City Council to consider rail safety letter to Feds

Repost from The Benicia Herald
[Editor:  Original documents on the City of Benicia’s website:
      – Staff’s Agenda Report
      – Mayor Patterson’s draft letter of support
      – League of Cities letter requesting letters of support & sample letter]

City Council to mull rail safety missive

By Donna Beth Weilenman, April 2, 2015

Mayor Patterson seeks endorsement of letter calling for action to update federal policy on crude oil transport; no conflict seen with pending Valero request

Benicia, California

Mayor Elizabeth Patterson will ask the City Council on Tuesday to endorse a letter supporting the League of California Cities’ call for increased crude-by-rail safety measures.

Christopher McKenzie, the LCC’s executive director, already has sent a letter March 6 on behalf of its board of directors to U.S. Secretary of Transportation Anthony R. Foxx, asking that his department make LCC’s recommendations part of federal policy in governing rail safety.

“The continued increase in the transport of crude oil by rail, combined with recent rail rail accidents involving oil spills and resulting fires, have served to heighten concerns about rail safety among many of our member cities,” McKenzie wrote.

Rail safety, particularly in transport of crude oil from North Dakota’s Bakken fields, has become a growing concern nationwide and elsewhere.

The California Environmental Protection Agency has been presenting a series of forums on the matter, one of which took place March 26 in Crockett, a meeting attended by several Benicia residents who oppose delivery of oil by train.

In another development this week, WesPac Midstream has dropped the crude-by-rail component of its intent to transform a Pacific Gas and Electric tank farm into a regional oil storage site.

In explaining the move Project Manager Art Diefenbach cited uncertainties about prospective changes in regulations of oil shipping by rail, a series of protests and falling crude prices that have made shipping by train less attractive. Should the project be completed, oil would arrive either by ship or pipeline, which Pittsburg Mayor Pete Longmire suggested would make the operation safer and less controversial.

League-of-CA-Cities-LogoIn his letter, McKenzie cited incidents that prompted the LCC to express its own safety concerns and to offer recommendations that might reduce the potential for accidents.

“Specifically, two derailments accompanied by fires involving unit trains (100 or more tank cars) carrying crude oil in West Virginia and in Ontario, Canada, earlier this month have greatly increased public anxiety about what steps the relevant federal regulatory agencies are taking to improve rail safety and on what timetable,” he wrote.

He said the LCC wanted to make three points: First, that improvements that are required of participating industries should be mandates, not recommendations; second, that the mandates should have a hard deadline for implementation; and third, that the Department of Transportation should include the LCC’s recommendations in the final rule for Safe Transportation of Crude Oil and Flammable Materials.

McKenzie wrote that the LCC wants all federal agencies involved in regulating crude-by-rail shipments to require electronically controlled braking systems on trains carrying the sweeter crude from the North Dakota Bakken oil fields, and to set a sooner date for phasing out or retrofitting the older DOT-111 tanks.

More federal money should be directed toward training and equipment for first responders who are sent to hazardous materials accidents, he wrote, and how the funding is to be distributed needs to be defined. In addition, trains should have maximum speed limits in all areas.

His letter said the LCC wants the number of tank cars that trigger a California Energy Commission and State Emergency Response Commission report lowered to 20 from 33, which in turn would lower the trigger point from shipments of 1.1 million gallons or more to those of 690,000 gallons or more.

Priority routes for positive train control, a technology that incorporates geopositioning tracking to slow or halt trains automatically to reduce collisions, should be identified, McKenzie wrote, and parking and storage of tank cards need regulating, too.

He further wrote that railroads should be forced to comply with their Individual Voluntary Agreements with the US-DOT, because currently there is no requirement for them to do so. Those pacts involve reducing speed limits for oil trains that use older tank cars and travel through urban areas; determining the safest rail route; increased track inspection; adding enhanced braking systems; improving emergency response plans and training; increasing track inspections; and working with cities and communities to address their concerns about oil transport by train.

“The League of California Cities understands that this area of regulation is largely preempted by federal law,” McKenzie wrote. “That is why we are urging specific and timely action by the federal agencies charged with regulatory oversight in this area. We do not expect that derailments and accidents will cease altogether, but we anticipate that stricter safety standards will reduce their numbers over time.”

The LCC also has supplied member cities with a sample letter patterned after McKenzie’s message, to customize before sending to Foxx.

In a report to Benicia City Council, City Manager Brad Kilger wrote, “The League Executive Director has requested that cities send letters to the appropriate federal rail safety rulemaking authority requesting that these measures be implemented.”

Since the preparation of the letter template, he wrote, the LCC has learned that any decisions on improved safety regulations would be made in the Office of Management and Budget.

“The mayor is requesting that the city send a letter on behalf of the Benicia City Council,” Kilger wrote.

Consideration of the letter won’t conflict with future consideration of a request by Valero Benicia Refinery to extend Union Pacific Railroad tracks onto its property and make other modifications so it can substitute rail delivery for tanker ship delivery of crude oil, a highly contentious proposition that is currently undergoing environmental review.

“In that the city is currently processing the use permit and EIR (environmental Impact Report) for the Valero Crude-by-Rail Project, I asked the city attorney to determine whether sending a letter requesting rail safety improvements would in any way create a due process issue for the city,” Kilger wrote.

He said City Attorney Heather McLaughlin informed him there would be no conflict because the letter doesn’t take any position on the Valero project or the adequacy of the ongoing environmental review.

“The letter simply urges the adoption of more stringent federal standards for the transportation of crude by rail,” Kilger wrote.

If the Council agrees the letter should be sent to Foxx, it would be signed by Patterson as mayor, and copies would be sent to California’s two U.S. senators, Dianne Feinstein and Barbara Boxer, all members of California’s delegation in the U.S. House of Representatives, the Federal Railroad Administration, the National Transportation Safety Board, the Solano County Board of Supervisors, the Solano Transportation Authority, Kilger, McLaughlin and members of the Council.

The Council will meet at 7 p.m. Tuesday in the Council Chamber of City Hall, 250 East L St.