Tag Archives: Union Pacific

Bakken Crude, Crude By Rail, Public safety funding, Rail infrastructure

Minnesota Gov. Dayton pressures railroads to pony up for safety upgrades

Repost from The Mineapolis StarTribune

Dayton pressures railroads to pony up for safety upgrades across Minnesota

By: Kyle Potter, Associated Press, March 13, 2015 – 3:45 PM

ST. PAUL, Minn. — Gov. Mark Dayton gave railroad companies and Republicans a public tongue-lashing Friday for their resistance to his tax plan to fund safety improvements across Minnesota’s railroad network.

Seven trains haul North Dakota crude across Minnesota daily — an influx that has contributed to backlogs of agricultural shipments and raised safety concerns after a string of recent explosive derailments.

With a throng of officials from towns dealing with the headaches of heavier train traffic behind him, Dayton called it “totally unacceptable” that railroads would oppose contributing more money to the state’s safety efforts. The governor and other fellow Democratic lawmakers have proposed a series of tax increases and annual fees on railroads to upgrade railroad crossings and ease congestion across Minnesota.

“That is the responsibility of the railroad,” Rep. Paul Marquart, DFL-Dilworth, said of improvements.

By taxing train cars and levying an annual fee on Minnesota’ four major freight railroads, the state would net $330 million over the next decade, mostly for improvements at railroad crossings. Dayton’s plan would also fund increased training for first responders, including a new statewide training facility.

The governor is also planning to carve out $76 million from a bonding bill this year to build underpasses or overpasses in Moorhead, Prairie Island, Coon Rapids and Willmar, where passing trains block crossings for hours every day.

Railroad companies such as BNSF Railway, the state’s largest freight railroad and a major shipper of Bakken crude, balked at the governor’s proposal. In a statement, spokeswoman Amy McBeth said the company believes Dayton’s proposed taxes violate federal law “because they single out railroads for discriminatory taxation.”

The other three major freight railroads operating in Minnesota are Canadian Pacific, Union Pacific and Canadian National.

Majority House Republicans have also signaled they’re not on board with the tax increases.

“While the governor and I agree that our railroad crossings need improvements, the funding source is still the main issue,” said Rep. Tim Kelly, the Republican chair of the House Transportation Finance committee.

Dayton criticized Republicans for not supporting his plan, but he saved his strongest words for the railroad companies.

The governor said state officials believe they’re on solid legal ground to foot railroads with a larger tax bill. And he remained defiant in the face of a possible lawsuit from railroads if his proposal goes ahead.

“We’re going to do what we know is right for Minnesota. If they want to take us to court, that certainly shows their true colors,” Dayton said.

Alberta Canada, Crude By Rail, Emergency Readiness & Response, Spill prevention and response, Tar sands crude, Union Pacific Railroad

Washington, Oregon officials caught by surprise: unit trains of tar sands moving through NW and CA

Repost from Oregon Public Broadcasting
[Editor: Significant quote for us in California: “The trains originate in Alberta, moving through Idaho to Washington. From there, some are bound for refining in Western Washington and others travel along the Columbia River into Portland and south into California.”  – RS]

Big Trainloads Of Tar Sands Crude Now Rolling Through NW

By Tony Schick, Feb. 9, 2015
Since 2012 Union Pacific has been moving oil through Oregon on mixed freight trains. In late 2014, the railroad began moving several mile-long trains of crude oil per month through the Northwest.
Since 2012 Union Pacific has been moving oil through Oregon on mixed freight trains. In late 2014, the railroad began moving several mile-long trains of crude oil per month through the Northwest. Kool Cats Photography / flickr

Trains carrying mass loads of heavy crude oil from Canada’s tar sands have begun moving through the Northwest, creating the potential for an oil spill in parts of Oregon and Washington where environmental agencies have no response plans or equipment in place.

Union Pacific now moves between seven and 10 of these mile-long trains of Canadian crude per month through Northwest states, according to railroad spokesman Aaron Hunt. They can carry more than a million gallons of oil.

The trains originate in Alberta, moving through Idaho to Washington. From there, some are bound for refining in Western Washington and others travel along the Columbia River into Portland and south into California.

The seven to 10 monthly trains represents a big  increase over Union Pacific trains that had  previously been hauling mixed freight that included oil tank cars. The mile-long “unit trains” began in late November, according to the railroad, but spill planners at Oregon’s Department of Environmental Quality and Washington’s Department of Ecology didn’t learn of the new shipments until late January and early February, respectively.

Both agencies, along with emergency responders and rail safety inspectors, were previously caught unprepared in 2013 when shipments of sweet light crude from North Dakota’s Bakken oil fields started moving through the region.

Railroads are required to notify states about oil shipments larger than one million gallons under an emergency order from the federal Department of Transportation. The order was filed in response to national concerns about local fire departments being caught unaware or kept in the dark when these “rolling pipelines” were passing through their jurisdictions.

That order applies only to Bakken crude; shipments from Canada are exempt. Oregon Sens. Ron Wyden and Jeff Merkley have called on the federal DOT to expand its regulation to include all shipments, with the aim of avoiding a situation like mile-long trains of tar sands crude moving without knowledge from the agencies tasked with oil spill cleanup.

“It is unacceptable that volatile tar sands oil has been moving through our communities for months and yet Oregon officials only found out about it last week,” Wyden said in a statement released to OPB/EarthFix. “This apparent lack of communication with state officials responsible for Oregonians’ health and safety is exactly why I have been pushing for an iron-clad rule to ensure first-responders in our communities are notified about these oil trains.”

Officials in Oregon and Washington said they lack the resources and authority for adequate spill planning along rail corridors. Rail lines touch more than a hundred watersheds in Oregon and cross more than a thousand water bodies in Washington.

Unlike plans for marine transports and storage facilities, plans for who responds, how and with what equipment are lacking in Oregon and Washington when it comes to rivers and lakes.

“We will respond, but our response won’t be as effective as it would be with the facilities where we’ve reviewed their plans, we know what they contain,” said Bruce Gilles, emergency response program manager at Oregon’s DEQ.

Should a train full of tar sand oil spill today, response teams will be “going in somewhat blind,” and that means they won’t be able to work as quickly as they should, Gilles said.

“You’re going to lose time, and that time translates into increased environmental damage and costs to clean up,” he said. “That’s the bottom line.”

David Byers, response manager for Washington’s Department of Ecology, said the state has begun filling the regional gaps where it lacks response plans, but the effort will take years.

Byers said tar sands crude presents many cleanup challenges the state’s never handled before.

Bitumen is a hydrocarbon extracted from Alberta’s tar sands. It’s too thick to be transported like conventional crude. It’s either refined into a synthetic crude — making it more like conventional crude oil —  or combined with additives that give it a more liquid consistency.

A heavy tar-like substance, bitumen can sink when it hits water. It’s also stickier, meaning it’s tougher to remove from wherever it spills. That’s what happened when a pipeline burst and spilled into the Kalamazoo River in Michigan. The cleanup cost exceeded $1 billion.

Frequent rain and fast-moving rivers in the Northwest mean a lot of sediment that oil can stick to, further complicating cleanup.

Byers and Gilles say they have no way of knowing what specific type of crude is in a given oil tanker car. Knowing that they’re dealing with a tar sand crude oil spill would dramatically influence their response.

“It’s much harder to clean up on the bottom of a river bed,” Byers said. “Or if it sinks in, for example, Puget Sound, it’s going to be more difficult to clean up, and even more challenging for us to even locate and detect where the oil has migrated to.”

It wouldn’t just be up to Oregon or Washington officials to handle spill-response duties if an oil train derailed in their state. Union Pacific has 30 hazardous materials responders across its 32,000 mile network and relies on private contractors for handling spill incidents.

“This team of experts directs training, preparation and response for any type of accident involving hazardous materials,” spokesman Aaron Hunt said in an email. “We move hazardous materials on behalf of our customers because it is our job.”

Bakken Crude, Crude By Rail, Federal Regulation (U.S.), Volatility

Federal Inspector General to audit transport of volatile crude by rail cars

Repost from The Chicago Sun Times
[Editor: See the Inspector General’s audit announcement here and the PDF notice to the Federal Railroad Administrator here.  – RS]

Federal IG to audit transport of volatile crude by rail cars

Rosalind Rossi, October 29, 2014
A CSX train from Chicago carrying crude oil derailed in April in Lynchburg, Va., forcing the evacuation of hundred.
A CSX train from Chicago carrying crude oil derailed in April in Lynchburg, Va., forcing the evacuation of hundreds.

A federal inspector general is launching an audit of whether hazardous materials are being carried safely over the nation’s rails — including highly-volatile Bakken crude that travels through the Chicago area.

“Due to the public safety risk posed by increases in the transportation of hazardous materials by rail, we are initiating an audit assessing the Federal Railroad Administration’s (FRA) enforcement of hazardous materials regulations using inspections and other tools,” a memo on the website of the Office of Inspector General of the U.S. Department of Transportation said Wednesday.

The memo specifically cited a fatal July 2013 Bakken oil train derailment in Lac Megantic, Canada, that “highlighted the importance of oversight of hazardous materials being transported by rail.” The Lac Megantic blast decimated more than 30 downtown buildings in the Canadian town and killed 47 people.

At least eight rail lines carry Bakken crude through Illinois, according to the Illinois Emergency Management Agency. They are BNSF, Norfolk-Southern, Alton & Southern, CN, CSX, Indiana Harbor Belt, Union Pacific and Canadian Pacific. Maps provided by BNSF to the Illinois emergency agency indicated BNSF rails carry Bakken through Cook County.

A candlelight vigil about what protestors called “bomb trains” was held July 10 at the BNSF terminal at 16th Street and Western Ave out of fear that black tank cars observed there with  placards indicating they held flammable petroleum were actually carrying Bakken crude. The protest was among those waged nationally to observe the one-year anniversary of the Lac Megantic disaster.

“We saw 47 people killed in Lac Megantic,’’ Debra Michaud, an organizer of the Pilsen protest, said at the time. “A bomb train explosion in Pilsen or Little Village would be many times that.’’

In April, a CSX train traveling from Chicago and loaded with crude oil derailed and exploded in Lynchburg, Va.. The incident shut down roads and bridges and forced the evacuation of hundreds. No one was injured or killed.

The crash was among series of accidents across North America involving railroads’ crude oil shipments, which have surged dramatically as oil production rises in regions like North Dakota’s Bakken shale and western Canada.

Wednesday’s inspector general memo noted that crude oil shipments have increased from 9,500 carloads in 2008 to 407,761 in 2013 — a more than 4000 percent jump.

Mayors Karen Darch of Barrington and Tom Weisner of Aurora have been particularly vocal about the increasing transport of volatile crude and other dangerous products. They say their residents face frequent traffic jams caused by long trains carrying volatile liquids and worry about the sturdiness of tank cars holding such liquid.

Some volatile fluids are being transported in the equivalent of the “Ford Pinto” of rail cars and such tankers should be upgraded, Darch has contended.

Darch Wednesday welcomed the IG audit as a positive development.

“We are all concerned about public safety risk and hopefully this report will have suggestions for further enhancing public safety,” Darch said.

Farming, Massive increase in crude-by-rail, Rail industry

Rail Logjams Are Putting The Whole US Economic Recovery At Risk

Repost from Business Insider
[Editor: Significant quote: “Many experts blame an incomplete recovery from last winter’s freight backlogs, coupled with record crops and rising competition with crude oil tankers for track space amid an economic recovery.”  – RS] 

Rail Logjams Are Putting The Whole US Economic Recovery At Risk

Susan Taylor and Solarina Ho, Reuters, Aug. 15, 2014

TORONTO (Reuters) – More than eight months after an extreme winter began snarling North American rail traffic, a Reuters analysis of industry data shows delays lingering, raising the risk of a second winter of chaos on the rails.

Across the continent’s seven largest operators, trains ran almost 8 percent slower on average and sat idle at key terminals for nearly three hours longer in the second quarter than a year earlier, data from the main railroads, known as Class 1, show.

While Canada’s rail operators have nearly recovered, many U.S. operators lag far behind.

The concerns are sharpest in the U.S. Farm Belt, with lawmakers fearful that the biggest crops on record may be slow to reach markets or could even rot.

Rail logjams contributed to the economic slowdown early in the year, rippling across corporate America and affecting everything from car makers to ethanol producers.

Many experts blame an incomplete recovery from last winter’s freight backlogs, coupled with record crops and rising competition with crude oil tankers for track space amid an economic recovery.

“It’s like a sinking ship – you’re bailing out at one end, but it’s coming in the other end just as fast, if not faster,” said Citigroup Global Markets transportation analyst Christian Wetherbee.

Performance fell behind as loads grew: between April and June, U.S. rail carload volumes grew 5.4 percent and intermodal traffic, which include shipments partly by rail, rose 8 percent, Association of American Railroads (AAR) data shows.

At the same time, the industry is producing “tremendous” margins, profit and cash flow, with some companies setting records, said rail analyst Tony Hatch.

The largest operators plan to spend about 18 to 20 percent of annual revenue this year on new terminals, track, sidings and equipment to help boost capacity and efficiency, according to Thomson Reuters data. That is slightly higher than recent average annual spending.

Some shippers complain that spending hasn’t been sufficient to meet demand, especially in bad weather. Still, many investment projects are multi-year improvements that can’t quickly fix traffic jams.

“We’re criticized … because we haven’t put infrastructure in to handle the growth. But then when you try to put infrastructure in, the not-in-my-backyard lobby kicks in and says: We don’t want you here,” Canadian Pacific Railway Ltd Chief Executive Hunter Harrison said on a recent earnings conference call.

Over the four decades to 2000, the nation’s major track system shrank by about half, in terms of miles of rails, according to the U.S. Federal Highway Administration.

Although Berkshire Hathaway’s BNSF Railway Co is spending a record $5 billion this year, its performance lagged those of competitors last quarter.  BNSF trains traveled 11 percent slower than year-ago speeds, and stayed at terminals for 18 percent longer.

Fadi Chamoun, an analyst at BMO Capital Markets, said BNSF is unlikely to recover until mid- to late-2015 due to the amount of work it must do.

In recent years, BNSF accounted for some 50 percent of the entire rail industry’s volume growth, analysts said. The company says it handles up to 15 percent of U.S. intercity freight.

BNSF declined to respond to Reuters’ questions about its performance metrics. The Fort Worth, Texas-based railway has said it is working closely with shippers to clear backlogs and adding track, locomotives and crews.

The other four U.S. Class 1 railroads are CSX Corp, Kansas City Southern, Norfolk Southern Corp and Union Pacific Corp.

Kansas City Southern and Norfolk Southern did not respond to requests for comment. CSX said it was investing in strategic capacity additions and was adding train crews and locomotives to restore performance and support growth. Union Pacific CEO Jack Koraleski told Reuters that the railroad’s performance has been improving even as volumes have been increasing, adding that it has worked hard to address disruptions and customer issues.

Cowen & Co analyst Jason Seidl said winter exacerbated problems for the industry. “As they were trying to dig out, the volumes took off,” he said.

ECONOMIC FALLOUT

In the United States, more than 40 percent of goods, valued at more than $550 billion, are shipped by railroad each year on some 140,000 miles of track. Canada’s 30,100 miles of track carry half of the country’s export goods.

Frozen transportation links contributed to a nearly 3 percent contraction in the U.S. economy during the first quarter, the New York Federal Reserve said last week.

Lawmakers and the $395 billion agricultural industry fear that trains may fail to clear last year’s record-breaking crops in the Midwestern U.S. Farm Belt, which could strand part of this summer’s grain harvest.

“We’re sounding the alarms right now,” North Dakota Senator Heidi Heitkamp told Reuters. “We believe the 2014 crop could be taken off the fields and there won’t be any place to store it, because of the lack of ability to move product by rail.”

BNSF and Canada’s CP Rail operate the main rail networks in North Dakota, where farmers vie for space with some 700,000 barrels per day of crude oil shipped by rail from the state’s Bakken Shale.

“You can’t see these massive increases in crude-by-rail and not appreciate that they are creating problems for moving agricultural products,” Heitkamp said.

Members of Congress, utility companies, the United States Department of Agriculture and others are asking the U.S. rail regulator, the Surface Transportation Board, for help.

“With remaining grain in storage due to the backlog, grain elevators in some locations, such as South Dakota and Minnesota, could run out of storage capacity during the upcoming harvest, requiring grain be stored on the ground and running the risk of spoiling. The projected size of the upcoming harvest creates a high potential for loss,” USDA Under Secretary Edward Avalos wrote to the regulator this month.

Utility Xcel Energy said coal deliveries to a key Midwest facility were behind schedule.

“When we run out of coal, the plant can’t produce electricity. We are right in the middle of summer when air-conditioning load creates our highest levels of electric demand,” Xcel Chief Executive Ben Fowke wrote in a letter to the STB at the end of July.

Since an April 10 hearing on rail service, the STB has issued several orders, primarily involving CP and BNSF. The most recent directive, issued in June, required the two railways to publicly file their plans to resolve their backlog on grain orders and provide a weekly update on grain car service. It declined to comment on complaints or its plans.

Earlier this month, the Canadian government ordered Canadian National Railway Co and CP to further boost regulated grain shipments, in an effort to prevent a repeat of last season’s backlog.

Recent University of Minnesota data showed that transportation bottlenecks cost the state’s soybean, corn and spring wheat farmers nearly $100 million between March and May.

United Parcel Service Inc, the world’s largest courier company, said that “very poor” railroad performance last quarter raised its costs. Even passenger service Amtrak has been affected, with some of the trains it runs on Class 1 tracks falling far behind schedule.

Canada’s biggest rails, CN and CP, operated their trains at speeds 4.7 percent and 3 percent slower in the second quarter than year-ago levels respectively, better than most U.S. rivals.

CN said its ability to avoid Chicago, a hub notorious for bottlenecks, helped its sector-leading recovery. In 2009, CN bought a rail network that encircles Chicago, the Elgin, Joliet and Eastern Railway Co.

CHICAGO BLUES

Chicago’s third-snowiest winter on record severely tangled traffic at a hub that handles one quarter of the nation’s freight-by-rail and has recently become a major conduit for Bakken crude.

Data from Union Pacific shows its trains idled in Chicago for an average 65 hours in February, around double the typical time for much of 2013.

Following a severe 1999 blizzard that paralyzed trains for days, government and railroads launched a $3.8 billion plan to improve the Chicago system.

That’s not a quick solution for the industry’s woes.

“It takes a long time for new lines and new terminals to get built, and additional locomotives to be delivered and additional crews to be trained,” said Steve Ditmeyer, an adjunct professor at Michigan State University’s Railway Management Program.

“There’s a time lag that the railroads cannot snap their finger and, all of a sudden, get out of the current problem.”

(With additional reporting by Joshua Schneyer and Jonathan Leff in New York, and Sagarika Jaisinghani in Bangalore; editing by Joshua Schneyer and Peter Henderson)