Repost from McClatchy News [Editor: Once again Curtis Tate has produced an incredible wide-ranging and deep analysis of current issues and developments around crude by rail in the US. This article can serve as a must-read primer on crude by rail. Note that the presentation below is only a rough copy – much better viewing on McClatchy’s website. – RS]
By Curtis Tate, December 31, 2014
TUSCALOOSA, Ala. — Every day, strings of black tank cars filled with crude oil roll slowly across a long wooden railroad bridge over the Black Warrior River.
Curtis Tate / McClatchyDecaying track and bridge conditions on the Alabama southern railroad could pose a risk to Tuscaloosa, Ala., population 95,000. Above, video of trains crossing the bridge.
The 116-year-old span is a landmark in this city of 95,000 people, home to the University of Alabama. Residents have proposed and gotten married next to the bridge. Children play under it. During Alabama football season, die-hard Crimson Tide fans set up camp in its shadow.
But with some timber pilings so badly rotted that you can stick your hand right through them, and a “MacGyver”-esque combination of plywood, concrete and plastic pipe employed to patch up others, the bridge demonstrates the limited ability of government and industry to manage the hidden risks of a sudden shift in energy production.
And it shows why communities nationwide are in danger.
“It may not happen today or tomorrow, but one day a town or a city is going to get wiped out,” said Larry Mann, one of the foremost authorities on rail safety, who as a legislative aide on Capitol Hill in 1970 was the principal author of the Federal Railroad Safety Act, which authorized the government to regulate the safety of railroads.
Almost overnight in 2010, trains began crisscrossing the country carrying an energy bounty that included millions of gallons of crude oil and ethanol. The nation’s fleet of tens of thousands of tank cars, coupled with a 140,000-mile network of rail lines, had emerged as a viable way to move these economically essential commodities. But few thought to step back and take a hard look at the industry’s readiness for the job.
It may not happen today or tomorrow, but one day a town or a city is going to get wiped out.
Larry Mann, principal author of the Federal Railroad Safety Act
In a series of stories, McClatchy has detailed how government and industry are playing catch-up to long-overdue safety improvements, from redesigning the tank cars that carry the oil to rebuilding the track and bridges over which the trains run.
Those efforts in the past year and a half may have spared life and property in many communities. But they came too late for Lac-Mégantic, Quebec, a Canadian lakeside resort town just across the border from Maine. A train derailment there on July 6, 2013, unleashed a torrent of burning crude oil into the town’s center. Forty-seven people were killed.
“Sometimes it takes a disaster to get elected officials and agencies to address problems that were out there,” said Rep. Michael Michaud, D-Maine, a member of the House of Representatives subcommittee that oversees railroads, pipelines and hazardous materials, who’s leaving Congress after six terms.
Other subsequent but nonfatal derailments in Aliceville, Ala., Casselton, N.D., and Lynchburg, Va., followed a familiar pattern: massive fires and spills, large-scale evacuations and local officials furious that they hadn’t been informed beforehand of such shipments.
The U.S. Department of Transportation will issue a set of new rules in January regarding the transportation of flammable liquids by rail.
“Safety is our top priority,” said Kevin Thompson, a spokesman for the Federal Railroad Administration,“both in the rule-making and through other immediate actions we have taken over the last year and a half.”
Nevertheless, McClatchy has identified other gaps in the oversight of crude by rail:
The Federal Railroad Administration entrusts bridge inspections to the railroads and doesn’t keep data on their condition, unlike its sister agency, the Federal Highway Administration, which does so for road bridges.
Most states don’t employ dedicated railroad bridge inspectors. Only California has begun developing a bridge inspection program.
The U.S. Department of Transportation concluded that crude oil from North Dakota’s Bakken shale region posed an elevated risk in rail transport, so regulators required railroads to notify state officials of large shipments of Bakken crude. However, the requirement excluded other kinds of oil increasingly transported by rail, including those from Canada, Texas, Wyoming, Colorado and Utah.
While railroads and refiners have taken steps to reserve the newest, sturdiest tank cars available for Bakken trains, they, too, have ruptured in derailments, and Bakken and other kinds of oil are likely to be moving around the country in a mix of older and newer cars for several more years.
We anticipate that crude by rail is going to stay over the long term
Kevin Birn, director of IHS Energy
Staying power
American railroads moved only 9,500 cars of crude oil in 2008 but more than 400,000 in 2013, according to industry figures. In the first seven months of 2014, trains carried 759,000 barrels a day – that’s more than 200,000 cars altogether – or 8 percent of the country’s oil production, according to the federal Energy Information Administration.
The energy boom, centered on North Dakota’s Bakken region, was made possible by hydraulic fracturing, or fracking, a horizontal drilling method that unlocks oil and gas trapped in rock formations. It was also made possible by the nation’s expansive rail system.
Crude by rail has become a profitable business for some of the world’s richest men. Warren Buffett, the billionaire investor, bought BNSF Railway in 2009. It’s since become the nation’s leading hauler of crude oil in trains. Bill Gates, the Microsoft founder and philanthropist, is the largest shareholder in Canadian National, the only rail company that has a direct route from oil-rich western Canada to the refinery-rich Gulf Coast.
Amid a worldwide slide in oil prices in recent weeks, crude by rail shows few signs of slowing down. The price per barrel of oil has dropped nearly 50 percent since last January. Still, the six largest North American railroads reported hauling a record 38,775 carloads of petroleum the second week of December.
“We anticipate that crude by rail is going to stay over the long term,” said Kevin Birn, director at IHS Energy, an energy information and analysis firm, and a co-author of a recent analysis of the trend.
Regulatory agencies and the rail industry may not have anticipated the sudden increase in crude oil moving by rail. However, government and industry had long known that most of the tank cars pressed into crude oil service had poor safety records. And after 180 years in business, U.S. railroads knew that track defects were a leading cause of derailments.
To be sure, railroads are taking corrective steps, including increased track inspections and reduced train speeds. They’ve endorsed stronger tank cars and funded beefed-up training for first responders.
Ed Greenberg, a spokesman for the Association of American Railroads, the industry’s principal trade group, said railroads began a “top-to-bottom review” of their operations after the Quebec accident.
“Every time there is an incident, the industry learns from what occurred and takes steps to address it through ongoing investments into rail infrastructure, as well as cutting-edge research and development,” he said. “The industry is committed to continuous improvement in actively moving forward at making rail transportation even safer.”
But the industry continues to resist other changes, including calls for more transparency. The dominant Eastern railroads, Norfolk Southern and CSX, sued Maryland to stop the state from releasing information to McClatchy about crude oil trains.
The industry also seeks affirmation from the courts that only the federal government has the power to regulate railroads. The dominant Western carriers, BNSF and Union Pacific, joined by the Association of American Railroads, sued California over a state law that requires them to develop comprehensive oil spill-response plans.
Repost from Inter Press Service [Editor: Significant quote: “’Under pressure from the fossil fuel industry – which has deep pockets and promises employment and investment – several governments have already started to weaken their environmental legislation, alter their tax regimes and put in place industry-friendly mining licensing and production processes, in order to attract foreign investors and expertise….’” See especially U.S. government promotion below. – RS]
First Phase of Global Fracking Expansion: Ensuring Friendly Legislation
By Carey L. Biron
Fracking fluid and other drilling wastes are dumped into an unlined pit located right up against the Petroleum Highway in Kern County, California. Credit: Sarah Craig/Faces of Fracking
WASHINGTON, Dec 1 2014 (IPS) – Multinational oil and gas companies are engaged in a quiet but broad attempt to prepare the groundwork for a significant global expansion of shale gas development, according to a study released Monday.
Thus far, the hydraulic fracturing (or “fracking”) technologies that have upended the global gas market have been used primarily in North America and, to a lesser extent, Europe. With U.S. gas production in particular having expanded exponentially in recent years, however, countries around the world have started exploration to discern whether they, too, could cash in on this new approach.
According to an estimate published last year by the U.S. Energy Information Administration, some 90 percent of the world’s shale gas could be found outside of the United States – an incredibly lucrative potential. “It’s likely there will be a revolution,” Maria van der Hoeven, the executive director at the Paris-based International Energy Agency, has said.
Yet according to the new study, from Friends of the Earth Europe, a watchdog group, only Brazil has strengthened its regulatory regime in anticipation of this expansion. Of the nearly dozen countries the new report looks at, most are doing the opposite.
“Under pressure from the fossil fuel industry – which has deep pockets and promises employment and investment – several governments have already started to weaken their environmental legislation, alter their tax regimes and put in place industry-friendly mining licensing and production processes, in order to attract foreign investors and expertise,” the report states. “This is often at the expense of the public interest.”
In terms of production this remains a nascent industry. Nonetheless, neither governments nor companies appear to have undertaken efforts to guard against the complexities that will arise, including around the potential for social, environmental and even political tensions.
“The industry is trying to change the legislation in those places where they want to operate, to try to repeat as much as possible the favourable policies we’ve seen in U.S. energy policy,” Antoine Simon, a shale gas campaigner with Friends of the Earth Europe and lead author on the new report, told IPS.
“The key here is to ensure that the legal frameworks are as friendly for the industry as possible. That’s the first phase of this global strategy, and we’re seeing it in each country we studied.”
No safeguards
Outside of North America and Europe, Argentina has moved forward the quickest on shale gas development, and thus offers a key example on legislative action for which companies may be looking.
For instance, Argentina has put in place a new law guaranteeing a minimum price for fracked gas. Further, this minimum price is some 250 percent higher than the previous valuation – a sweetheart guard against the bottomed-out prices that are currently impacting on gas production in the United States.
Simon says this law has a telling nickname in Argentina – the “Chevron Decree”, a reference to the U.S. oil and gas company. The day after the law was passed, he notes, Argentina’s main state-backed oil and gas producer signed a long-term production deal with Chevron.
Other countries have put in place favourable new tax policies for oil and gas investors. In Morocco, for instance, producers will be exempt from corporate taxes for the first decade of operation, while Russia has created similar policies for oil production over the next 15 years.
Yet the lack of action to simultaneously put in place environmental or social safeguards in most countries runs a variety of risks, Friends of the Earth Europe and others warn. Hydraulic fracturing requires massive amounts of water, for instance – up to 26 million litres per drill site.
The new report finds that a significant proportion of shale gas reserves around the world are located in areas that are already experiencing significant water shortages and even related violence. Likewise, many of these shale basins are beneath major cross-border aquifers.
Even before these issues are addressed by national governments, then, the oil and gas industry could gain influence in setting policy on the notoriously contentious issue of freshwater use.
Alongside concerns about the local impact of shale gas development is a broader lack of clarity today on the extent to which developing countries would be able to benefit from any new gas-related revenues. Thus far, only Brazil has specifically addressed this issue.
“In our research, Brazil was the only exception in terms of passing legislation that ensured they would get some significant revenues,” Simon says. “Really that doesn’t seem to be happening in other countries, where instead we’re seeing a lot of legislation that offers state aid to push investors to come to their countries.”
Beyond a few notable exceptions in Latin America and South Africa, Simon suggests that this issue has not yet seen significant opposition by civil society. Still, advocacy groups do point to a growing trend of global understanding and mobilisation on fracking concerns.
“As more and more studies confirm the risks of air pollution, water contamination, increased earthquake activity and climate change impacts from fracking, the more people oppose this destructive and intensive process,” Wenonah Hauter, the executive director of Food & Water Watch, a U.S. watchdog group, told IPS.
“The movement to ban fracking has resulted in hundreds of local communities taking action to stop fracking, several states and countries instituting moratoriums, and the movement continues to grow.”
In October, Food & Water Watch organized an international day of action to ban hydraulic fracturing. Hauter notes that the event featured “over 300 actions in 34 countries, from Australia to Argentina, even Antarctica, calling for a ban on fracking”.
Food & Water Watch reports that France and Bulgaria have already banned hydraulic fracturing, while local moratoriums have also been passed by hundreds of communities across the Netherlands, Spain and Argentina.
U.S. government promotion
Meanwhile, the drivers behind fracking-related pressures are not simply multinational companies and national governments keen on investment. It was in the United States where hydraulic fracturing was invented and proved its potential, and today the U.S. government is reportedly taking a central role in promoting these techniques worldwide.
In almost all of the countries studied for the new report, researchers found the development of shale gas to be “closely linked” to a U.S. government agency, the U.S. Unconventional Gas Technical Engagement Program (UGTEP). Housed within the U.S. State Department, since 2010 the UGTEP has engaged in a wide variety of technical assistance around gas development.
“Governments often have limited capability to assess their own country’s unconventional gas resource potential or are unclear about how to develop it in a safe and environmentally sustainable manner,” UGTEP explains on its website. “The ultimate goals of UGTEP are to achieve greater energy security by supporting the development of environmentally and commercially sustainable frameworks.”
While U.S. diplomats are specifically tasked with strengthening U.S. business prospects abroad, critics say UGTEP’s activities constitute the broad promotion of hydraulic fracturing under the guise of U.S. diplomacy.
“UGTEP uses official government channels and US taxpayers’ money to promote high-volume horizontal hydraulic fracturing worldwide, opening doors for the main global players in the oil and gas industry,” the Friends of the Earth Europe report states.
“Through UGTEP, the US is also actively engaged in re-shaping existing foreign legal regulations to create the desired legal framework for the development of shale oil and gas in the targeted countries.”
Repost from The Wall Street Journal [Editor: A good summary of recent history and market players in the emergence and future of crude by rail. Interesting quote: “…if all the railcars loaded with crude on one day were hitched to a single locomotive, the resulting train would be about 29 miles long.” – RS]
Dangers Aside, Railways Reshape Crude Market
Shipping Crude by Rail Expands as New Pipelines Hit Headwinds and Train Companies Reap Revenue
By Russell Gold and Chester Dawson, Sept. 21, 2014
Railroad tank cars are filled with oil at the Musket Corp. Windsor Crude Terminal in Windsor, Colo. | Bloomberg
In May 2008, a locomotive with a grizzly bear painted on its side pulled into a railroad siding next to an abandoned grain elevator in the ghost town of Dore, N.D. The engine, property of the Yellowstone Valley Railroad, hitched up a couple of tank cars of crude from nearby oil wells and set off on a thousand-mile journey to Oklahoma.
Dore would never be the same—and neither would the U.S. energy industry. Until then, most oil pumped in North America moved around the continent in pipelines. Suddenly, and just as the oil industry began a period of unprecedented growth, there was an alternative: “crude by rail.”
Today, 1.6 million barrels of oil a day are riding the rails, close to 20% of the total pumped in the U.S., according to the Energy Information Administration, chugging across plains and over bridges, rumbling through cities and towns on their way to refineries on the coasts and along the Gulf of Mexico. If all the railcars loaded with crude on one day were hitched to a single locomotive, the resulting train would be about 29 miles long.
Initially conceived of as a stopgap measure until pipelines could be constructed, and plagued by high-profile safety problems, crude by rail has nevertheless become a permanent part of the nation’s energy infrastructure, experts say. Even pipeline companies have jumped into the rail business, building terminals to load and unload crude.
Behind the new industry are powerful economics. While it costs a bit more to ship petroleum on trains than through pipelines, railroads have the flexibility to deliver it to wherever it will fetch the highest prices. And capital expenses are far lower. Major railroads’ revenue for hauling crude has jumped from $25.8 million in 2008 to $2.15 billion in 2013, according to federal data.
The oil and rail industries have developed “a mutual dependence likely to continue for a long time,” said Ed Morse, global head of commodities research for Citigroup.
It is a similar story in Canada: the amount of crude moving by rail has quadrupled since 2012, and is forecast to more than triple between now and 2016.
The swift growth of crude by rail has been embraced by drillers in new oil fields in North Dakota, Texas and Colorado eager to move their product to the highest bidders. It was also welcomed, at least initially, by railroads looking for new customers after the recession sent traditional shipments tumbling.
But it has frightened communities across the country where first responders fear the fireballs that have erupted in the past year after some oil-train derailments. Federal regulators recently proposed new rules to require sturdier cars to carry oil, lower speed limits on some shipments and testing of the volatility of the crude transported by train.
Pipelines still carry most of the 8.5 million barrels of oil pumped every day in the U.S. And safety experts say pipelines have the best record of transporting crude without accident, despite a few big leaks like the one that left Mayflower, Ark., awash in heavy crude last year.
But pipelines, especially new pipelines, face a lot of problems these days. They draw protests from communities worried about spills and unhappy with the use of eminent domain to take rights of way from local landowners.
Activists opposed to the use of fossil fuels have focused on blocking pipelines in hopes of keeping oil in the ground. The Keystone XL pipeline, which requires federal approval because it crosses the U.S. border from Canada, has been seeking a permit since 2008 amid fierce political fighting, pro and con.
Railroads, by contrast, already own 140,000 miles of track in the U.S., according federal statistics, in a system that can send cargo from coast to coast, north to Canada and south to Mexico. By law, railroads don’t have the ability to turn down cargo, even if they want to, so all oil shippers had to do is to figure out how to get oil on and off the trains.
A big loading terminal might cost about $50 million—equal to the estimated cost of building just one mile of the Keystone pipeline.
With a terminal, “You can build it and have it under contract in 12 months and pay it off in five years,” said Steve Kean, president and chief operating officer of Kinder Morgan Inc., thtte operator of 80,000 miles of pipeline in North America and a growing network of rail terminals. The company has spent $290 million to date building up a crude-by-rail business.
To justify the massive investments needed for pipelines, their builders usually require drillers and refiners to sign long-term shipping contracts before they start laying pipe. That has been a problem for new oil fields without a track record, and for the mostly independent energy companies that developed those fields using hydraulic fracturing, said Adam Sieminski, who runs the federal government’s Energy Information Administration. Railroads don’t require such lengthy contracts.
The new way of moving crude was born out of frustration and need. In 2006, North Dakota faced what it called, in a report, a “crude oil transportation crisis.” Oil production was rising, but the few pipelines that served the state were full.
Enter Musket Corp., a privately held Houston company owned by the family that also owns Love’s Travel Stops & Country Stores. Musket bought inexpensive diesel from refineries along the Gulf Coast and moved it by rail to locations close to the Love’s service stations, developing and patenting a portable pump for loading and unloading the fuel.
In 2007, Musket tried using its pump to load a couple of tank cars with crude oil rather than diesel. When that worked, the company sent employees driving around North Dakota with binoculars to find an unused railroad siding to lease. They spotted Dore.
“Pretty soon, we knew it was going to be big,” said J.P. Fjeld-Hansen, a managing director of Musket. Trains could deliver Bakken crude to wherever it could fetch the highest prices, including Philadelphia, California, Louisiana or the giant Houston petrochemical complex.
The first loads from Dore were carried to Oklahoma, home to a giant oil-trading hub, by BNSF Railway Co., now owned by Berkshire Hathaway Inc. It picked up the cars from Yellowstone Valley Railroad, a so-called short line railroad that now operates on just one mile of track — specializing in hauling freight from shippers’ yards to connections with the bigger railroads. The company that owns the railroad, Watco Companies Inc., didn’t respond to requests for comment.
“Crude is a growing part of our business,” said Michael Treviño, a spokesman for BNSF, which now moves more oil than any other major North American railroad and spent $200 million last year on crude-by-rail projects.
The Dore project caught the attention of EOG Resources Inc., a big oil and gas company based in Houston. By the end of 2009, EOG had built an industrial-scale rail-loading terminal in Stanley, N.D., including a 1.3-mile loop of track where trains could be loaded with 60,000 barrels a day.
“We brought the project to fruition in an eight-month period,” Mark Papa, the former chairman of the company, said in a conference call with analysts in 2010. The company declined to comment.
The terminal cost $50 million, according to Wilson & Company Inc., an engineering firm involved in the project. Its chairman, Kenny Hancock, said his firm needed to work out kinks with this first-of-its-kind facility.
One problem was that when tank cars were loaded, hydrocarbon fumes would leak out and, since they were heavier than air, settle in the long open-ended loading shed. “The first seal we tried didn’t work and our explosive limit alarms went off,” he said. New seals and ventilation fans eventually solved the problem, the company said.
The relative ease and low cost of building loading and unloading terminals soon attracted a range of companies. Great Western Railroad, a Saskatchewan short line mostly owned by the province’s farmers in a cooperative agreement, hauled more carloads of crude last year than carloads of grain.
In 2011, Dakota Plains Holding Co. built a loading terminal, acquired a Utah tanning salon business that traded on the OTC Bulletin Board, renamed the business and issued shares to raise funds to expand.
There was also a surge in facilities for unloading oil and transferring it to refineries; such terminals are operating or planned in nearly two dozen states and Canadian provinces. Mile-long trains of oil tankers became familiar sights in cities across the country.
The crude-by-rail phenomenon has spread beyond the Bakken Shale in North Dakota and Montana to the Permian Basin in Texas, the Niobrara in Colorado and to western Canada. In July, Global Partners said they planned to build a rail terminal in the heart of the Gulf Coast petrochemical complex that can handle more than 100,000 barrels a day of crude, including Canadian oil sands.
“It is not a layup to build a pipeline to the Gulf Coast,” said Mark Romaine, chief operating officer of Global Partners, a Waltham, Mass., fuel logistics firm. “Look at the Keystone XL.”
But a year ago, those strings of black train cars took on an ominous look after an unattended oil train in Lac-Mégantic, Quebec, derailed and exploded, killing 47 people. Several other derailments were followed by fireballs as Bakken crude burst into towering flames.
Those accidents have given railroads second thoughts about hauling crude, said consultant Anthony Hatch. While companies don’t break out the data, hauling crude is believed to be very profitable for railroads, so “they were excited” at first, he said. But now that business, which makes up only about 3.5% of rail shipments, according to federal data, has attracted unwelcome attention in communities that previously ignored the freight trains rumbling through town. And even some of the largest North American railroads are concerned they might not survive the costs of cleanup and lawsuits if a train exploded in a crowded city.
Regulators are imposing new rules that industry executives fear could slow the entire rail system, cut capacity and cause congestion. Federal regulators recently concluded that Bakken oil contains a high level of combustible compounds, known as light ends, as The Wall Street Journal reported earlier this year. The U.S. Department of Transportation’s proposed new rules on crude by rail will require companies to test crude before putting it into appropriately sturdy tank cars, among other measures being imposed on the little-regulated industry.
Harold Hamm, chairman and chief executive of Continental Resources Inc., a leading exploration and production company in the Bakken, said that the problem isn’t with the oil, but with railroad safety. “There would not be any problems with oil movements in America as long as Mr. Buffett keeps the trains on the track,” said Mr. Hamm, referring to Warren Buffett, the chairman and chief executive of Berkshire Hathaway, the owner of BNSF.
Mr. Treviño, the BNSF spokesman, said that “the facts are that 99.997% of rail industry shipments of hazardous materials reach their destination without a release caused by a train accident,” and that BNSF had a lower percentage of derailments last year than anytime in company history.
Two BNSF trains were involved in a derailment near Casselton, N.D., in 2013 that released more than 400,000 gallons of crude and set off a several-story tall explosion, leading to the evacuation of 1,400 people from Casselton.
The Association of American Railroads said it has increased inspections, decreased speeds and is using more technology to prevent derailments.
But Mr. Hamm said he thinks the situation will be short lived. “Rail is still a temporary thing,” he said. “If rail hadn’t been available, there would have been pipelines built.”
And some are in the works. Enbridge Inc. recently received approval form North Dakota regulators to start construction on a $2.6 billion, 225,000-barrel a day and 600-mile project called the Sandpiper pipeline, which would move oil from Tioga, N.D., to Wisconsin.
In Dore, Musket says it isn’t worried about business drying up with the addition of pipelines. The company’s terminal in the town can now handle 60,000 barrels a day and employs 50 people; the company has built another rail-loading facility in Dickinson, a two-hour drive to the south, and one in the Niobrara Shale in Colorado.
“I don’t think it’s either/or,” Mr. Fjeld-Hansen said. “I think rail and pipe will coexist for a long time.”
—Betsy Morris and David George-Cosh contributed to this article.
Lawmaker: Regulators’ Oil-Train Safety Push Could Be Climate-Change Policy in Disguise
A California Republican who calls global warming a “fraud” believes the Transportation Department may be trying to curb use of fossil fuels.
By Ben Geman, September 9, 2014
Scorched oil tankers remain on July 10, 2013 at a derailment site in Lac-Megantic, Quebec.(Steeve Duguay/AFP/Getty Images)
A House Republican suggested the Transportation Department is hiding a stealth global-warming policy behind the guise of a rail-safety crackdown.
Federal regulators are writing new safety standards for trains that carry crude oil from North Dakota’s Bakken shale formation, part of a broader regulatory initiative that follows a string of derailments and explosions on trains shipping the fuel. The regulators have increased their focus on the flammability of the fuel, as well as other risks of moving it by rail.
But Republican Rep. Dana Rohrabacher of California sees an ulterior motive: an effort to cripple fossil-fuel development in the name of a global-warming “theory.”
Rohrabacher, who has called global warming a “fraud,” leveled the charge at senior Transportation Department regulator Timothy Butters during a House Science Committee hearing on oil from the Bakken formation, which is moving around North America by rail in large volumes.
The agency’s efforts, Rohrabacher said, are “perhaps a facade to obtain what we clearly have as a goal of this administration, which is to reduce America’s use of fossil fuel, even though it is now being presented to us as something about safety.”
Rohrabacher accused Butters of refusing to answer direct questions during the hearing, during which panel Republicans challenged his department’s flammability assessment of the Bakken crude.
“You just won’t answer anything … because the agency may be involved in a play based on global-warming theory, trying to, again, suppress the usage and the use and availability of fossil fuels, and letting that be in the background, forcing situations and forcing people like you to have to go through those verbal acrobatics not to answer a question,” Rohrabacher told Butters.
Butters, who is the deputy administrator of the Transportation Department’s Pipeline and Hazardous Materials Safety Administration, disputed the allegation. He said that his agency is focused on the topic because of accidents—including last year’s derailment and explosion that killed 47 people in Lac-Mégantic, Quebec—and because of the amount of oil now moving around American railways.
His testimony noted, “At any given time, shipments of more than 2 million gallons are often traveling distances of more than 1,000 miles.”
“This material poses a risk. We are not trying to restrict the movement. We want to make sure that it moves safely. That is our role,” Butters told Rohrabacher.
“Energy and hazardous materials are critical to this nation’s economy. We strongly support that and we believe that. But our role is to ensure that this energy is moving safely through transportation. These crude-oil lines that carry these large volumes of flammable crude oil, which this material is, we need to ensure that it moves and it gets to its destination without incident,” he said.
The nation’s fracking boom has helped push North Dakota’s oil production above 1 million barrels per day, a five-fold increase over the last half-decade.
The federal Energy Information Administration, citing North Dakota Pipeline Authority data, says that between 60 percent and 70 percent of the oil produced there has been moved to refineries by rail during the first half of this year.
This article appears in the September 10, 2014 edition of NJ Daily.
Curtis Tate / McClatchyDecaying track and bridge conditions on the Alabama southern railroad could pose a risk to Tuscaloosa, Ala., population 95,000. Above, video of trains crossing the bridge.
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