Tag Archives: Tesoro

Bloomberg: Feds announce weak “emergency order”

Repost from Bloomberg Business Week

The Government Takes a Weak Stab at Making Oil Trains Safer

By Matthew Philips  |  May 08, 2014

On Wednesday, a week after a train loaded with crude oil from North Dakota exploded in downtown Lynchburg, Va., dumping 30,000 gallons of oil into the James River, the Department of Transportation announced two moves to try to keep this from happening so frequently. It’s doubtful that either will make much of a difference in preventing what’s become a major safety hazard in the U.S.

Under a new “emergency order,” the DOT said it’s now going to require any railroad that ships a large amount of crude to tell state emergency responders what it’s up to. That includes telling them how much crude it’s hauling and the exact route it intends to take. Railroads also now have to provide local emergency responders with contact information of at least one person who’s familiar with the load, in case, you know the local fire chief needs to find out what the heck’s inside that overturned tank car that just unleashed a 400-foot fireball.

This emergency order applies to any train carrying more than 1 million gallons of crude specifically from the Bakken region of North Dakota. That’s essentially all the trains hauling crude across the U.S. right now. Since there aren’t enough pipelines connecting the oil fields in North Dakota, most of the nearly 1 million barrels the state produces leaves every day by train. It takes about 35 tank cars to haul 1 million gallons. Most of these oil trains are 100 cars long and stretch over a mile.

The reason this applies only to Bakken crude is twofold. First, that’s most of what’s being hauled. Second, the oil coming out of the Bakken is unlike any other kind that’s out there. It’s light, sweet, and superflammable, with high levels of propane and methane. That makes it almost impossible for local first responders to put out the fires that erupt when these trains derail. Sometimes, their only recourse is to evacuate the area and watch the tank cars burn.

The amount of oil moving by train each month has risen by nearly 400 percent since 2009Data: American Association of RailroadsThe amount of oil moving by train each month has risen by nearly 400 percent since 2009

On top of the emergency order, the DOT on Wednesday issued a “safety advisory,” in which it “strongly urg[ed]” the oil companies shipping Bakken crude on trains to use the best tank cars they can. This advisory came from the Federal Railroad Administration, a division of DOT. How that differs from the organization’s normal position on safety isn’t clear. But it seems not unlike the FAA, after a rash of plane crashes, “strongly urging” airlines to buy the safest kind of planes they can and stop using old, outclassed ones.

The old, outclassed ones in this case is the DOT-111 model of tank car that’s been involved in most of the crude train explosions, including the one last summer in Quebec that killed 47 people. Although it’s widely deemed unfit for transporting crude, the DOT-111 is used to move the vast majority of oil sent by train in the U.S. It’s also the same classification of tank car that’s used to haul agricultural commodities, such as corn or soybeans.

According to the investment bank Cowen Group, about 100,000 DOT-111 tank cars in the U.S. are used to haul flammables such as crude and ethanol. About three-quarters of them may require retrofitting or a gradual phaseout. While some energy companies, such as Tesoro, are already choosing to phase out DOT-111s in their North Dakota operations, most companies are sticking with them until they’re forced to change. A complicating factor is that it’s not even clear, given how volatile Bakken crude is, whether using safer, better-reinforced cars would even help keep a derailed train from exploding.

The DOT’s safety advisory urging the use of better tank cars is a weaker step than what Canadian regulators did two weeks ago, when they aggressively moved to phase out all DOT-111s from hauling crude within three years. In an e-mail, a DOT spokesperson wrote that the agency is moving as quickly as it can to update its tank car regulations and that the safety advisory is a step it can take immediately. Last week, DOT Secretary Anthony Foxx sent to the White House a list of options on how to make crude-by-rail safer.

Philips is an associate editor for Bloomberg Businessweek in New York.

Richmond City Council calls for ban on Bakken crude by rail

Repost from The Contra Costa Times
[Editor’s note: See Contra Costa County Supervisor John Gioia’s letter to Richmond Mayor/City Council here. – RS]

Richmond calls on Congress to halt crude oil transport through Bay Area

By Robert Rogers Contra Costa Times

Posted:   03/25/2014

RICHMOND — A unanimous Richmond City Council voted Tuesday to call on Congress to halt rail transport of Bakken crude oil from North Dakota pending new regulations and explore what local measures could be enforced to thwart truck transport of the volatile fuel mix on local streets.

The resolution, proposed by Mayor Gayle McLaughlin, follows revelations in recent days of massive increases in crude-by-rail shipments into Contra Costa County, including at Kinder Morgan in Richmond, the only facility in the Bay Area that receives crude shipped on Burlington Northern Santa Fe trains and transfers it to trucks for transport to Bay Area refineries.

“There are terrible threats in our midst,” McLaughlin said. “Ultimately, we need to ban (Bakken crude) from coming through our community.”

The resolution directs city staff to send a letter to the Bay Area Air Quality Management District, Contra Costa County Hazardous Materials Division Director Randy Sawyer, Congressmen George Miller and Mike Thompson, Senators Dianne Feinstein and Barbara Boxer, State Senators Loni Hancock and Mark Desaulnier and Assemblymember Nancy Skinner urging them to work on new regulations, including halting the transport of crude near Bay Area communities. Councilman Tom Butt added an amendment directing staff to explore whether the city could use its own regulatory powers to ban transport of Bakken crude on city streets.

Railroad activity is typically beyond the scope of local laws and is regulated at the federal level.

The vote followed a presentation by oil industry author Antonia Juhasz detailing the nationwide increase in accidents associated with rail transport of Bakken crude, which is fracked in North Dakota and is more volatile and susceptible to explosion than heavier crude blends.

The volume of crude transported by rail into Northern California increased by 57 percent during 2013, according to California Energy Commission statistics.

About 85 percent of the crude by rail delivered to Northern California in 2013 came from North Dakota, followed by 12.5 percent from Colorado, according to the commission. Four of the five Northern California oil refineries listed by the commission are in Contra Costa County, with the other in Benicia.

“A whole lot more oil is being spilled by trains,” Juhasz said. “It’s dramatically worse.”

From 1975-2012. 792,600 gallons of oil were spilled in train accidents, Juhasz said. In 2013, 1.3 million gallons were spilled in accidents, more than the combined total of every year since 1975.

Juhasz said the problem centers on three factors: More oil is being harvested and moved within the continent, it’s being sent to coastal refineries for processing and export due to higher international prices, and regulation has not kept pace with the rapid changes.

“The National Transportation Safety Board said oil spill response planning requirements are practically nonexistent,” Juhasz said. “They recommend that you require rerouting to avoid transportation of such hazardous materials through populated and other sensitive areas.”

In the past month, critics have hosted town hall meetings in Richmond, Martinez and Pittsburg decrying planned increases in crude-by-rail shipments into the Bay Area. On Tuesday night, the Berkeley City Council passed a resolution directing city staff to oppose efforts to transport Bakken crude through the city.

Juhasz drew specific attention to rising accident numbers, with particular emphasis on a train explosion in July in Lac-Mégantic, Quebec, where 47 people were killed.

“There is a movement toward more federal regulation,” Juhasz said. “This (resolution) would not just be an exercise, it would add to the cacophony of voices making that demand.”

Not all residents were convinced.

“I read about your agenda item to encourage to regulate this, now I am hearing ban it,” said Don Goseny, a Richmond resident. “That is kind of overregulation isn’t it? No one is even asking is there a safe way to transport this crude.”

Contra Costa County Supervisor John Gioia released a statement Tuesday saying he is concerned that “there was no clear communication” between BAAQMD staff members and Kinder Morgan before a permit was issued to the offloading company last September, when Juhasz said it began offloading Bakken crude. He said the issue will be discussed at the next BAAQMD meeting on April 21.

“The dramatic increase in the volume of Bakken shale crude oil being transported by rail through Northern California should be of great concern to local government,” Gioia wrote.