Tag Archives: Tesoro-Savage

Vancouver City Council passes oil moratorium

Repost from The Columbian

Vancouver City Council passes oil moratorium

Unanimous vote approves emergency six-month measure
By Stephanie Rice, September 11, 2014
An oil train passes through Vancouver. The Vancouver City Council on Thursday unanimously passed an emergency six-month moratorium on new or expanded facilities that would accept crude oil. The moratorium won’t affect the oil transfer terminal proposed by Tesoro Corp. and Savage Companies that’s currently under review by the state. (Steven Lane/The Columbian)

The Vancouver City Council on Thursday unanimously passed an emergency six-month moratorium on new or expanded facilities that would accept crude oil.

The moratorium won’t affect the oil transfer terminal proposed by Tesoro Corp. and Savage Companies that’s currently under review by the state.

While the six-month moratorium was straightforward — a public hearing will be Oct. 20, and it will expire March 10, 2015, unless extended by the council — a last-minute filing muddied the issue.

The special council meeting was announced Wednesday in accordance with a state law requiring 24-hour public notice. It was meant to head off plans by NuStar Energy L.P. of San Antonio to apply to start storing crude oil at its two bulk tank terminals in Vancouver, one at the port and one at 5420 Fruit Valley Road.

At 3:30 p.m. Wednesday, a preliminary application was filed by NuStar with the city, said Brent Boger, an assistant city attorney.

Boger said he doesn’t know whether a pre-application qualifies the project as vested, and therefore exempt from the moratorium.

A pre-application signals interest to do a project in the city. During a pre-application conference, the applicant learns what the city would require before permits would be issued so the applicant can decide whether to go forward with an application.

Without a moratorium, NuStar would be allowed to store crude oil under current city zoning, Boger said.

Jon Wagner, a senior planner, told the council he hadn’t had enough time to thoroughly review the thick packet submitted by NuStar.

NuStar has handled jet fuel, antifreeze, diesel, methanol and other products at its Vancouver terminals, but not crude oil. In April, NuStar submitted an application for an air quality permit with the Southwest Clean Air Agency to convert a tank at each of its locations to handle crude oil.

The terminals would receive oil by rail, and then ship it out by barge.

NuStar spokesman Chris Cho said Thursday the potential crude-by-rail project at the Vancouver terminal is in the early stages of development, but a pre-application was submitted for a building permit to start the lengthy permitting process.

“If we receive regulatory approvals to build the facility, we anticipate it would handle an average of 22,000 barrels per day — approximately one-third the capacity of one unit train per day,” Cho said. “This project would provide revenue to the port, create jobs, bring more low-cost crude to the region, and further support U.S. energy independence. It would also be a state-of-the-art facility that would be operated safely, in accordance with NuStar’s very high safety standards,” Cho said.

Cho emphasized that NuStar operates rail facilities at many terminals and invests in safety equipment, technology and specialized training for employees and ensures trains comply with all regulatory safety standards.

Aside from the NuStar questions, the council focused on wanting the six months to discuss how crude petroleum facilities should be regulated. The proposed moratorium referenced Bakken crude oil, but Councilor Anne McEnerny-Ogle suggested the moratorium cover all crude oil facilities and other councilors agreed.

The only councilor who objected to the moratorium was Bill Turlay, but he changed his mind and voted with his six peers.

Initially, Turlay, speaking to the audience that filled the council chambers, said he remembers when many of them showed up to protest coal trains.

Now it’s oil trains, he said.

Critics of the Tesoro-Savage facility cite many concerns, including potential oil spills, the volatility of North Dakota Bakken crude and global climate change.

Turlay, who believes that carbon dioxide has only a negligible effect on climate change, said instead of rushing to a moratorium he wants a public debate about causes of climate change. His comments prompted laughter and groans from the audience.

Turlay said he does have concern about safety, but trusts the rigorous review by the Washington State Energy Facility Site Evaluation Council weeds out any dangerous proposals.

Councilor Jack Burkman pointed out to Turlay that smaller projects need city, not state, approval. Those smaller projects don’t have to be reviewed by the state evaluation council, and that’s the point of enacting a moratorium.

Councilor Alishia Topper told Turlay the council was doing what he said he wanted, which was to slow down and carefully weigh the pros and cons of additional regulations.

When it came time for roll call, Turlay said he changed his mind and voted “yes.”

In June, the City Council voted to formally intervene in the EFSEC process, a legal maneuver giving the city the right to present evidence and appeal.

The council also approved a broad policy statement opposing any proposal that would result in an increase of Bakken crude oil being hauled through Clark County.

Tesoro-Savage wants to build an oil-by-rail terminal that would receive an average of 360,000 barrels of crude per day at the port.

Eventually, the evaluation council will make a recommendation to Gov. Jay Inslee, who will approve or deny the project.

While the city’s moratorium won’t stop the Tesoro-Savage project, Vancouver resident Jim Luce, a former chairman of EFSEC who opposes the oil terminal, said it could influence Inslee.

“It sends a signal to the state — and the governor — that the Vancouver City Council is not enthusiastic about siting oil terminals in its backyard,” Luce said Thursday.

Erin Middlewood contributed to this article.

Bloomberg News – Valero Oil-by-Rail Plan Has ‘Unavoidable’ Air Impacts, City Says

Repost from Bloomberg News

Valero Oil-by-Rail Plan Has ‘Unavoidable’ Air Impacts, City Says

By Lynn Doan Jun 17, 2014

Valero Energy Corp. (VLO)’s plan to unload as many as 70,000 barrels of oil a day from trains at its Benicia refinery will increase emissions across California in a “significant and unavoidable” way, a city report shows.

Valero has applied to build a rail-offloading rack at the plant northeast of San Francisco that would take oil from as many as 100 tanker cars a day. The San Antonio-based company delayed the project’s completion by a year to early 2015 as it awaits approval from the city.

“Project-related trains would generate locomotive emissions in the Bay Area Basin, the Sacramento Basin, and other locations in North America,” the city of Benicia said in an environmental assessment posted on its website today. “The city has no jurisdiction to impose any emission controls on the tanker car locomotives; therefore, there is no feasible mitigation available to reduce this significant impact to a less-than-significant level.”

Valero is proposing the rail spur as record volumes of oil are extracted from North American shale formations that the U.S. West Coast has little pipeline access to. California’s refiners are already bringing in the biggest-ever volumes of oil by rail as they seek to displace shrinking supplies of crude within the state and from Alaska.

A series of explosions and derailments of trains carrying crude, including one in Quebec that killed 47 people in July, touched off a flood of letters to the city of Benicia about Valero’s project and compelled the planning commission to put off a decision until an environmental study could be done.

New Rules

Regulators in both the U.S. and Canada are imposing new rules designed to improve the safety of trains carrying oil and a group of California agencies released a report June 10 recommending ways in which the state should respond.

Earlier this month, the city council in Vancouver, Washington, voted to oppose a proposal by Tesoro Corp. (TSO) and Savage Cos. to build a 360,000-barrel-a-day, rail-to-marine complex at the Port of Vancouver.

Valero’s Benicia project would probably result in a spill of more than 100 gallons once every 111 years, according to an analysis conducted as part of the city’s environmental report. The report was prepared by researchers at the University of Illinois’s Rail Transportation and Engineering Center in Urbana, Illinois.

California’s refiners received 557,315 barrels of oil by rail in April, the most ever for that month, state Energy Commission data show. Crude from Canada made up 45 percent of the state’s total rail receipts. Oil from North Dakota accounted for 22 percent.

’Challenged’ Market

Valero has described refining in the western U.S as “a challenged market” with margins close to break-even when all of the region’s plants are running normally. Profits from the 132,000-barrel-a-day Benicia refinery are particularly under pressure, Joe Gorder, the company’s president and chief executive officer, said in a presentation May 21.

The plant “produces a significant yield of gasoline, which, of course, we’ve seen the margins compressed on and demand not be the greatest on,” Gorder said at the UBS Global Oil and Gas Conference in Austin, Texas. Sourcing alternative crudes on the West Coast “would increase the economics out there for us substantially,” he said.

Spot California-grade diesel has traded about 3.5 cents a gallon above gasoline in Los Angeles this year and averaged an 8.75-cent premium in 2013, data compiled by Bloomberg show.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net Charlotte Porter

Washington Governor Inslee orders spill response plan

Repost from The Columbian

Inslee issues oil train directive

Dept. of Ecology ordered to develop spill response plan
By Lauren Dake, June 12, 2014
An oil train travels through downtown Vancouver in April. According to state estimates, crude oil shipments in Washington went from zero in 2011 to 17 million barrels in 2013. (Zachary Kaufman/The Columbian)

Gov. Jay Inslee directed state agencies Thursday to tackle mounting public safety concerns and develop an oil spill response plan as train traffic continues to increase, particularly in Southwest Washington.

He announced the directive at a meeting of The Columbian’s editorial board in Vancouver.

“The Pacific Northwest is experiencing rapid changes in how crude oil is moving through rail corridors and over Washington waters, creating new safety and environmental concerns,” the directive reads.

The governor asked the Department of Ecology to work with other state agencies, the Federal Railroad Administration and tribal governments to “identify data and information gaps that hinder improvements in public safety and spill prevention and response.”

Specifically, the governor’s directive asks agencies to:

  • Characterize risk of accidents along rail lines.
  • Review state and federal laws and rules with respect to rail safety and identify regulatory gaps.
  • Assess the relative risk of Bakken crude with respect to other forms of crude oil.
  • Identify data and information gaps that hinder improvements in public safety and spill prevention and response.
  • Begin development of spill response plans for impacted counties.
  • Identify potential actions that can be coordinated with neighboring states and British Columbia.
  • Identify, prioritize, and estimate costs for state actions that will improve public safety and spill prevention and response.

He set an Oct. 1 deadline for Ecology to respond.

He also said he’ll reach out to other states to develop coordinated oil transportation safety and spill response plans, and pledged to ask the 2015-17 Legislature for money for oil train safety.

The directive comes as the state Energy Facility Site Evaluation Council is reviewing an application by Tesoro Corp. and Savage Companies to build an oil shipping terminal at the Port of Vancouver. Bakken crude would arrive at Vancouver by train from North Dakota and leave by ship or barge via the Columbia River.

As governor, Inslee will have the final say on the Tesoro-Savage permit. Inslee said he had to be “very guarded” in his comments about the oil terminal while the review is happening. “We will make the right decision at the right time,” he said.

“I can tell you we have very serious concerns with safety associated with oil trains,” he said.

The governor said he would be “heavily invested in understanding the full ramifications” and plans to be as well-versed as anyone in the state on the topic.

Schools and bridges

The interview was wide-ranging; Inslee also talked about the need to close tax loopholes in order to find additional revenue to fund the state’s public schools.

“We have a sort of Swiss-cheese tax code because some lobbyists have been successful in getting some special favors over the decades,” Inslee said. “Some of those make sense … They are not uniformly virtuous.”

In this coming legislative session, he said, he will push lawmakers to increase the state’s minimum wage.

“I do believe minimum wage is one of the tools that are useful to give working people a fair break,” he said.

And, he said, the state continues to have a lot of “unmet needs” when it comes to transportation.

“Many of them are here (in Southwest Washington), the (Columbia River Crossing) just being one of them. We know there are other needs as well,” Inslee said.

Inslee said once the region has “legislators that really want to find a solution for Southwest Washington,” the area would be better represented in any transportation package.

Inslee was asked about Republican efforts to organize a new bistate bridge coalition. He said the only thing he’s heard is “there have been some discussions.”

It’s an effort spearheaded by Sen. Ann Rivers, R-La Center, and Rep. Liz Pike, R-Camas. Yet another bridge plan is being promoted by Republican County Commissioner David Madore, who vows to open his bridge to traffic in five years.

“The last bridge took, I think, 10 to 13 years to get all the permitting done,” Inslee said. “This is an arduous, lengthy, multijurisdictional process … There might be 1,000 other plans.”

A new bridge is “pivotal to the entire state” and he planned to spend his day in Vancouver talking to “people of good faith and open minds” to discuss the best way to move forward.

The first-term Democrat spent all day Thursday in Vancouver. He presented awards to state Department of Transportation employees, and visited a local technology firm, Smith-Root, that is expanding. Thursday evening he gave the commencement address at the Washington School for the Deaf’s graduation ceremony.