Tag Archives: Tar sands crude

New Oil Train Safety Regs Focus on Accident Response, Not Prevention

Repost from Center for Biological Diversity

CenterForBiolDiv_logoNew Oil Train Safety Regs Focus on Accident Response, Not Prevention

Long Phase-out of Hazardous Cars, Inadequate Speed Limits Leave Communities at Risk of Explosive Derailments

For Immediate Release, December 7, 2015
Contact: Jared Margolis, (802) 310-4054

WASHINGTON— A new transportation bill signed by President Obama includes provisions intended to improve the safety of oil trains, but leaves puncture-prone tank cars in service for years and fails to address the speed, length and weight of trains that experts point to as the leading causes of explosive derailments. The bill upgrades safety features on oil train tank cars and requires railroads to provide emergency responders with real-time information about when and where dangerous oil cargoes are being transported but doesn’t do enough to prevent oil train accidents, which have risen sharply in recent years.

“While these regulations improve our ability to prepare for oil train disasters they do virtually nothing to prevent them from ever occurring in the first place,” said Jared Margolis, an attorney with the Center for Biological Diversity who focuses on the impacts of energy development on endangered species. “Until we dramatically reduce the speed and length of these bomb trains it’s only a matter of time before the next explosive derailment sends fireballs rolling through one of our communities.”

The new regulations will require all oil train tank cars to include fire-resistant ceramic coatings and protections for protruding top fittings. The final rule issued by federal regulators in May only required oil trains with 35 loaded oil tank cars or 20-car blocks of oil tank cars to implement the new standards, and would not have required the ceramic blankets or top fitting protections for all retrofitted cars.

But experts say even the protective measures included in the new transportation regulations signed into law on Friday will do little to prevent a spill if a train derails at speeds faster than 18 mph, and oil trains are permitted to travel at 40 mph to 50 mph. And the new regulations do not require the phase-out of dangerous puncture-prone tank cars to begin until 2018, and allows them to remain in service until 2029.

“It’s irresponsible to continue to allow these bomb trains to roll through the middle of our communities and across some our most pristine landscapes,” said Margolis. “We need to quit pretending we can make these dangerous trains safe and simply ban them altogether.”

Congress has directed the U.S. Department of Transportation to continue requiring notifications to states of train routes and frequencies so communities can better prepare to respond to train derailments, explosions and oil spills. However, the new regulations do nothing to remedy the track infrastructure problems, or the excessive length and weight of oil trains, cited as leading causes of derailments. Further, it remains unclear whether the public will have access to information about these hazards.

“Keeping information on oil trains from public scrutiny is outrageous, and only serves to protect the corporate interests that care little about the risk to the homes, schools and wild areas that these trains threaten,” said Margolis. “We need to keep these trains off the tracks and keep these dangerous fossil fuels in the ground, rather than keeping the public in the dark.”

Background 

The National Transportation Safety Board has repeatedly found that current tank cars are prone to puncture on impact, spilling oil and often triggering destructive fires and explosions. But federal regulators have ignored the safety board’s official recommendation to stop shipping crude oil in the hazardous tank cars. Recent derailments and explosions have made clear that even the newer tank cars, known as CPC-1232s, are not significantly safer, often puncturing at low speeds.

The recent surge in U.S. and Canadian oil production, much of it from Bakken shale and Alberta tar sands, has led to a more than 4,000 percent increase in crude oil shipped by rail since 2005, primarily in trains with as many as 120 oil cars that are more than 1.5 miles long. The result has been oil spills, destructive fires, and explosions when oil trains have derailed. More oil spilled in train accidents just in 2013 than in the 38 years from 1975 to 2012 combined.

The Center for Biological Diversity is a national, nonprofit conservation organization with more than 900,000 members and online activists dedicated to the protection of endangered species and wild places.

The U.S. Has An Oil Train Problem

Repost from ThinkProgress

The U.S. Has An Oil Train Problem

By Samantha Page, Dec 3, 2015 2:43 PM
In this Feb. 16, 2015 photo, provided by the Transportation Safety Board of Canada, workers fight a fire after a crude oil train derailment south of south of Timmins, Ontario. CREDIT: AP PHOTO / TRANSPORTATION SAFETY BOARD OF CANADA

Recipe for disaster: Put a flammable substance under pressure into a metal container, then rumble it at 50 miles an hour down a metal rail, across hundreds or even thousands of miles, through towns and cities and over bodies of water. Repeat, as necessary.

The United States is coming to the end of the costliest year on record for oil train explosions, Bloomberg News reported Tuesday, as crude oil travelling by rail has reached its highest levels ever. This past year saw a town in North Dakota evacuated after a May derailment and explosion; another major derailment and explosion in Illinois in March; and a February derailment and explosion in West Virginia, which destroyed a home, forced the evacuation of 1,000 people, and caused the governor to declare a state of emergency.

oil-overtime

CREDIT: EIA DATA

At the beginning of 2010, the United States was shipping about one million barrels of oil by rail every month. By mid-2014, though, that number was around 25 million. Imports from Canada increased 50-fold during that time. The resulting surge in accidents — including a Quebec derailment in 2013 that killed 47 people — prompted the Department of Transportation to enact new safety rules in May 2015.

But those rules didn’t prevent costs from ballooning from $7.5 million in damage in 2014 to $29.7 million in 2015, according to Department of Transportation data.

crude by rail

CREDIT: ENERGY INFORMATION ADMINISTRATION

Still, carloads of petroleum products have declined significantly since their peak in December 2014, and Bloomberg reporter Mathew Philips suggests that we are unlikely to see this amount of crude by rail in the future.

The reasons for this decline are two-fold. The United States sees crude by rail mainly from two places: Alberta, Canada’s tar sands and the Bakken oil fields of North Dakota, which are affected by two very different scenarios. The Alberta tar sands are expensive to develop and are far from refineries and consumers. That means developers who have already invested will turn to rail as a way to recoup expenses, but it is not their first choice. Without available, low-cost transportation, new development in the tar sands is economically unfeasible, Oil Change International’s Lorne Stockman told ThinkProgress. According to his group’s report “Lockdown: The End of Growth in the Tar Sands,” without more pipelines, tar sands development is going to hit a wall. (In other words, the group agrees with climate activists who say the Keystone decision really will keep more oil in the ground.

But even though stopping pipeline expansion could inhibit oil extraction in Canada, it’s not so simple in the United States. Developing the Bakken fields is significantly less expensive than in Alberta, and producers have — for the past five years — had no problem using rail to bring their cheap crude to the coasts, where it competed with more expensive overseas oil. Now that overseas prices have dropped, producers are building out more pipeline infrastructure, but without it, they could still compete on the open market.)

“It’s hard to say that if you don’t build the pipe, it won’t go by rail,” Stockman said. “We’ve seen in the last five years that it does go by rail.”

He admits this is probably not what anti-pipeline activists want to hear.

“There are local issues around [pipelines], landowner issues, and I totally sympathize with that,” he said. The answer just isn’t going to be found in infrastructure. “If you want to stop production in the Bakken, you should make the producers pay for their pollution.”

The fact is, there is no safe way to transport oil. Studies have shown that while trains spill more often, pipelines spill more oil per incident. When the new regulations came out in 2014, environmentalists — and some legislators — criticized them as not going far enough. Because the realities of transporting an explosive material are pretty scary: while the new regulations lower allowable speeds, tests have shown that the cars can be punctured travelling at less than 20 miles an hour. The new speed limit is 50 miles an hour.

This week, New York Attorney General Eric Schneiderman filed a petition to reduce the pressure of crude rail cars.

“In New York, trains carrying millions of gallons of crude oil routinely travel through our cities and towns without any limit on its explosiveness or flammability – which makes crude oil more likely to catch fire and explode in train accidents,” Schneiderman said in an emailed statement. “The federal government needs to close this extremely dangerous loophole, and ensure that residents of the communities in harm’s way of oil trains receive the greatest possible protection.”

How Cheap Crude Stalled America’s Booming Oil Trains

Repost from Bloomberg Business

How Cheap Crude Stalled America’s Booming Oil Trains

It was a record year for oil train mishaps—and the year crude-by-rail hit the brakes.

By Matthew Philips , December 2, 2015 – 4:00 AM PST

 

David Wilson/Flickr

It’s been several months since an oil train accident grabbed big headlines—but not because there haven’t been any. A single weekend in November saw two trains derail in Wisconsin. The first spilled about 20,000 gallons of ethanol into the Mississippi River, followed a day later by a spill of about 1,000 gallons of North Dakota Bakken crude.

This year has already been the costliest by far for crude train explosions. Derailments in 2015 have caused $29.7 million in damage, according to data from the U.S. Department of Transportation, a huge increase from $7.5 million in 2014. Most of this year’s price tag can be attributed to two crashes within a three-week span. The Feb. 16 derailment of a CSX train in West Virginia triggered a massive explosion near a cluster of homes along the Kanawha River and led to more than $23 million in damage. A BNSF train that derailed and exploded in Illinois on March 5 caused an additional $5.5 million in damage. Both trains were carrying highly explosive crude from North Dakota.

The lesser-noticed recent accidents haven’t come with explosions or towering fireballs. At least some of the ruptured tank cars were the newer-model CPC-1232, which are supposed to be less likely to split open. The U.S. and Canada earlier this year announced stricter tank car standards, mandating further improvements in the future. Those rules will cost companies—mostly those that ship crude—an estimated $2.5 billion from 2015 to 2034; government estimates suggest the benefits will range from $912 million to $2.9 billion, presumably from fewer accidents.

But even without changing safety standards, there’s reason to suspect that costly train accidents will decline. While 2015 will go down as the worst year for crude train disasters, it’s also shaping up to be the year crude-by-rail hit the brakes. The crash in prices has slowed activity in the oilpatch and reduced the amount of petroleum riding the rails. The number of train carloads carrying petroleum has fallen 30 percent through Nov. 20 since peaking in December 2014, according to the American Association of Railroads. The monthly data on crude-by-rail shipments kept by the U.S. government lags a few months behind, but as of September those shipments had dropped 21 percent from their peak in January 2015.

Rail shipments of petroleum are down 30 percent in 2015.
Rail shipments of petroleum are down 30 percent in 2015.

This marks the first sustained decline in crude-by-rail traffic since it took off in 2009, jumping an astounding 5,000 percent in a little more than five years. Putting oil on trains was never the most efficient way to move it. It’s expensive and slow, not to mention dangerous. But in the places where the shale boom has unlocked the biggest amounts of crude, trains were often the only option.

That’s especially true in North Dakota, home to the Bakken formation, where oil production has risen from about 200,000 barrels a day to more than 1 million. By 2013, 71 percent of Bakken crude was transported by train. North Dakota has almost single-handedly driven the crude-by-rail boom, accounting for 80 percent of all oil train traffic in the U.S. as of earlier this year.

Since the third quarter of 2014, however, two pipeline projects have been completed in North Dakota, increasing the amount of oil that can be piped out of the state by nearly 200,000 barrels a day. There’s also a new refinery that opened earlier this year, reducing the amount of oil that needs to be railed down to the large refineries outside Chicago. Since 2011, North Dakota’s combined pipeline and refining capacity has doubled, from 400,000 barrels a day to 800,000. By the end of 2017 it’s slated to double again, to 1.5 million barrels a day.

Oil traders now have options for how to move oil out of North Dakota. But there’s another reason they’re pulling back on the amount they put on the rails: It’s not as profitable as it used to be. Early on, the shale boom created an enormous glut of crude that ended up stuck in the middle of the country. Getting it to market meant putting it on trucks and trains and barges, which was expensive and slow. So the price of U.S. crude fell compared with international prices. By October 2011 a barrel of U.S. oil pegged to the West Texas Intermediate contract that trades in New York was $27 cheaper than an equivalent barrel priced against the Brent contract trading in London.

That differential led to one of the biggest arbitrage opportunities the oil market has ever seen. Savvy traders could buy cheap oil in the middle of the U.S., find a way to move it, and sell it for higher prices along the coasts, where the market is more exposed to Brent prices. The price to send a barrel of oil by rail from North Dakota down to the U.S. Gulf Coast was about $9 or $10; the rest became profit. Over the past few years, millions of barrels of oil in North Dakota got loaded onto trains bound for the East Coast and the Gulf.

But as the U.S. oil infrastructure reoriented around the shale boom and pipelines began moving domestic oil to the coasts, instead of moving imports into the heartland, the spread between WTI and Brent has narrowed. The crash in global oil prices has closed the gap even further, to the point that a barrel of WTI crude is now just $3 cheaper than a barrel of Brent. That’s not enough to make money if you have to ship it hundreds of miles on a train. Refineries in Texas and Louisiana have switched from railing oil in from North Dakota to importing more crude from West Africa.

As a result, there’s now a glut of tank cars on the market. According to energy research firm Genscape, lease rates have fallen from $2,500 a month to about $500. Big refining companies, which are among the largest crude-by-rail shippers, are shifting their strategy and trying to lock in prices for three and four years rather than just a few months.

David Vernon, a transportation analyst at Sanford C. Bernstein, thinks crude-by-rail traffic has peaked. “The heyday is over,” he said. “The high-water mark has likely been set in terms of volumes.”

Canada’s growing oil production is expected to outpace its capacity of new pipelines.
Canada’s growing oil production is expected to outpace its capacity of new pipelines.
Citigroup

Canada, however, could be a different story. Although the country’s oil sands industry is struggling against low prices, there are projects currently under construction that will be finished over the next few years. That extra oil will have to move somehow, and as of now, trains are looking like a strong candidate. Canada’s oil production is forecast to grow faster than pipelines can be built, especially now that the Keystone XL is officially dead. So while the number of trains loaded with crude crisscrossing the U.S. may diminish in the next few years, rail may remain a viable option in Canada.

 

 

Tesoro Savage Port of Vancouver report: 28 more oil trains each week; salmon, earthquake, derailment risks, etc.

Repost from the Seattle Times
[Editor:  The press is full of revealing information taken from the Draft Environmental Impact Statement (DEIS) analyzing the proposed Tesoro Savage Vancouver Energy Project.  The document was released yesterday.  Several media links are provided below.  – RS]

28 more oil trains across state each week if big terminal built, study says

By Hal Bernton,  November 24, 2015, Updated 11/25/15 9:25 am

A major oil terminal proposed for Vancouver, Wash., would bring an additional 28 oil trains per week across the state and launch a new era of oil-tanker traffic down the Columbia River, according to a draft state study released Tuesday.
…but concerns about the risks of oil-train derailments … the study noted that trains also may deliver bitumen — a heavier crude …  [FULL STORY]

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