Tag Archives: Washington State

Bomb Trains, Crude By Rail, Federal deregulation, Keeping Watch on Earth News, Oil train derailment and explosion, Oil trains, Pipeline and Hazardous Materials Safety Administration (PHMSA), State regulation, Trump administration, Washington State

Trump admin’s stunning explanation for easing up on oil trains: Safety no excuse for “inhibiting market growth”

Safety Can’t Be a ‘Pretext’ for Regulating Unsafe Oil Trains, Says Trump Admin

Desmog, by Justin Mikulka, May 20, 2020
Lac-Megantic oil train explosion
Train burning in Lac-Mégantic, Quebec. Credit: Transportation Safety Board of Canada, CC BY-NC-ND 2.0

The federal agency overseeing the safe transport of hazardous materials released a stunning explanation of its May 11 decision striking down a Washington state effort to regulate trains carrying volatile oil within its borders. A state cannot use “safety as a pretext for inhibiting market growth,” wrote Paul J. Roberti, the chief counsel for the Pipeline and Hazardous Materials Safety Administration (PHMSA).

The statement appeared in the Trump administration’s justification for overruling Washington’s oil train regulation, which was challenged by crude-producing North Dakota and oil industry lobbying groups. The Washington rule seeks to limit oil vapor pressure unloaded from trains to less than 9 pounds per square inch (psi) in an attempt to reduce the likelihood that train derailments lead to the now-familiar fireballs and explosions accompanying trains transporting volatile oil.

Roberti wrote: “Proponents of the law insist Washington State has a legitimate public interest to protect its citizens from oil train fires and explosions, but in the context of the transportation of crude oil by rail, a State cannot use safety as a pretext for inhibiting market growth or instituting a de facto ban on crude oil by rail within its borders.”

With this statement, PHMSA is codifying what has been clear for some time at the regulatory agencies responsible for overseeing the transportation of hazardous materials by rail: that is, profits take priority over safety.

Rail Industry ‘Pre-emption’ and Safety Under Trump

A year ago, the U.S. Department of Transportation (DOT), PHMSA‘s parent agency, invoked the same legal argument, known as “pre-emption,” to overrule state efforts to require at minimum two-person crews for operating freight trains. As part of the explanation for that decision, the DOT‘s Federal Railroad Administration announced that it was adopting a policy of deregulation.

“DOT’s approach to achieving safety improvements begins with a focus on removing unnecessary barriers and issuing voluntary guidance, rather than regulations that could stifle innovation,” wrote the agency.

A regulatory agency announcing a broad deregulatory agenda was shocking. However, this latest move openly declares that, while Washington state may have an interest in protecting its citizens from “oil train fires and explosions,” that concern should not get in the way of the oil industry’s ability to ship more of its product by rail through the state, apparently even if that increases the risk of oil train fires and explosions to Washington residents. This logic reaches a new level of prioritizing profits over people as regulatory practice.


Historically, or at least, theoretically, government has based regulations on cost-benefit analyses, weighing the costs of complying for the regulated entities against the benefits, such as lives saved or accidents prevented, as a result of the new rules. Here, the DOT‘s new regulatory approach appears to weigh primarily the benefits for the rail and oil industries while downplaying the potential cost in human lives.

However, these industries did argue about costs to get to this point. As DeSmog has repeatedly documented, lowering the vapor pressure of oil below 9 psi is possible through a process called stabilization, which makes oil less volatile and less likely to ignite. Conditioning the oil in this way before loading on trains would require the oil industry to invest in stabilization equipment, which the industry has argued is not economically feasible.

In 2014, Myron Goforth, the president of Dew Point Control LLC, a manufacturer of stabilization equipment, put the situation in simple terms. “It’s very easy to stabilize the crude — it just takes money,” Goforth told Reuters. “The producer doesn’t want to pay for it if he can ship it without doing it.”

DOT‘s May 11 decision notes that “compliance with the [Washington] law can only be accomplished by (1) pretreating the crude oil prior to loading the tank car.” Exactly: Making the oil safe to ship on long, heavy trains through small towns and large cities requires stabilizing, or conditioning, before loading it into tank cars (just as the industry does before loading oil in pipelines or on ocean-going tankers, at least in Texas). DOT makes no argument about how companies could comply with the Washington law, outside of trying to avoid passing through the state entirely or using a different transportation mode other than trains.

A particularly telling clue behind the DOT‘s conclusion that the Washington law should be pre-empted is found in the commenters whose opinions the agency is highlighting: “In light of the infrastructure, equipment, and other logistical issues, the commenters have concluded that pretreating is economically infeasible or unrealistic.”

In this case, the “commenters” the DOT is referencing are members of the oil industry and its lobbyists, including the refinery company Hess Corporation, Marathon Petroleum, the American Petroleum Institute (API), American Fuel and Petrochemical Manufacturers, and the North Dakota Petroleum Council.

At an oil-by-rail conference in 2016, an API official described the industry’s attitude about the prospect of requiring oil stabilization for rail transport: “We in the oil and gas industry see this as a very dangerous conversation.”


In December 2017, Trump’s Federal Railroad Administration repealed an Obama-era rule requiring modern braking systems on oil trains despite overwhelming evidence that these systems improve rail safety. Sarah Feinberg, former head of the Federal Railroad Administration, offered important context about rail industry opposition to that rule.

“The science is there, the data is there,” Feinberg said of the efforts to require updated rail braking systems on oil trains. “Their argument is, despite that data, [they] don’t want to spend the money on it.”

That seems to be the rule for overseeing rail safety under the Trump administration. If a rule costs industry money to improve safety and protect the public from oil train fires and explosions, the industry will push back against its regulators, who appear to be pushovers, especially but not exclusively under Trump.

The alternative of prohibiting oil transportation by rail, because it is apparently too dangerous and too costly to do safely, is never even considered.

Ignoring the Science

The latest decision on the Washington state case continues a trend under Trump to overlook robust science when regulating oil by rail. However, you might not know it from the comments of this decision’s supporters.

PHMSA used a single, flawed study from Sandia National Laboratories to support its conclusion that limiting the vapor pressure of oil moved by rail is unnecessary — while the agency ignored all the other established research on vapor pressure, volatility, and ignitability of crude oil.

The North Dakota Congressional delegation opened its statement praising the May 11 decision with lip service to science: “We thank the administration for doing the right thing by putting sound, scientific evidence above partisan politics.”

In the same vein, Ron Ness, president of the North Dakota Petroleum Council, told the Associated Press, “There is nothing unusual about the volatility of Bakken crude oil,” a claim the North Dakota attorney general has also made to argue against the Washington vapor pressure law.

And yet these statements don’t stand up to scrutiny. In my book Bomb Trains: How Industry Greed and Regulatory Failure Put the Public at Risk, I present the evidence that Bakken crude oil’s volatility is higher than other regions and that this factor makes a difference. This crude oil is much more volatile than traditional crude oil from Louisiana or Texas, and that volatility, along with other factors, makes it more likely to ignite in oil train derailments.

WATCH: Justin Mikulka, Sept 2015: The Science of Bomb Trains

As I noted at the time of its publishing, the Sandia Labs study is deeply flawed and does not study the actual issue of oil igniting during train derailments.

As for whether Bakken oil’s volatility is “unusual,” a Wall Street Journal analysis found in 2014 that “Crude oil from North Dakota’s Bakken Shale formation contains several times the combustible gases as oil from elsewhere.” These combustible gases are what give the Bakken oil much higher vapor pressure levels than most other crude oils from the U.S.

The combustible gases in the oil are natural gas liquids like butane and propane, which is why the oil is so volatile.

At the same time that the oil industry tries to say Bakken oil isn’t more volatile than other oils, it argues that Bakken oil’s value lies in these extra natural gas liquids. Stabilizing the oil by removing these gases from the oil not only would cost the industry money but the resulting oil would be worth less to the industry.

The DOT notes as much in its recent decision: “These higher vapor pressure hazardous materials, such as butane, ethane, and other natural gases, are deemed essential and valuable components of Bakken crude.”

The oil industry has no argument to make on a scientific basis here, only an economic one. Reducing the vapor pressure of oil by removing gases like butane and ethane makes it less volatile and less likely to ignite. That is established by research. But the industry has repeatedly argued that removing these flammable gases from the oil would make it less valuable, which is one of its justifications for not stabilizing the oil.

A Second Bakken Bomb Train Boom Could Be on the Way

The only things that have kept the estimated 25 million North Americans living along railroad blast zones safer from dangerous oil trains is the success of activists who have blocked new oil-by-rail projects and oil industry economics. Because transporting oil by rail is more expensive than by pipeline or ocean-going tankers, the industry moves much less oil on trains when oil prices are low.


Oil train protesters in Albany, New York, in May 2016. Credit: Justin Mikulka

With current oil prices at record lows in the U.S. and Canada, it doesn’t make economic sense to move oil by rail, which is good news for the millions of people living along the rails.

However, a current legal battle over the Dakota Access pipeline could make moving Bakken oil by rail a major mode of transportation, perhaps regardless of oil price.

A judge recently set a hearing to review the permitting process for the controversial pipeline, currently moving 500,000 barrels of crude per day. Depending on the outcome, that hearing could result in the judge vacating the pipeline’s permits, shutting it down and diverting all of that Bakken oil back onto the rails in a big way, at levels that would surpass the records of 2014. The Obama administration passed oil train safety regulations in 2015 in response to the fiery accidents and oil spills that coincided with the boom in oil train traffic.

The Trump administration has steadily worked to roll back the modest progress of those safety rules, with the last one, on vapor pressure for oil by rail, withdrawn from the rulemaking process the very same day the DOT pre-empted Washington’s vapor pressure rule.

Now, an essentially unregulated oil-by-rail industry poses a real risk to public safety and the environment. With the Trump administration shooting down Washinton’s rule and repealing previous safety regulations, the risks of moving volatile oil by rail are essentially the same as in 2013. That was the same year a train hauling Bakken oil exploded in downtown Lac-Mégantic, Quebec, and killed 47 people.

Today, Bakken oil is just as volatile — and dangerous. The trains pulling upwards of a hundred cars of oil have the same outdated braking systems. Regulators have no requirements overseeing train track integrity or wear (the two latest oil train derailments and fires in Canada were likely because of track failures). There are no regulations on train length. And while rail companies have phased in a newer class of tank cars, those cars have ruptured in every major derailment involving oil and ethanol trains.

The accident in Lac-Mégantic happened almost seven years ago. An early Wall Street Journal article after the accident quoted an oil industry executive who said, “Crude oil doesn’t explode like that.”

Which is true in most cases. But Bakken crude does explode like that because it is full of gases like butane, is highly volatile, and has much higher vapor pressure than most other crude oils.

While that doesn’t have to be true, the Trump administration is taking steps to make sure it is.

Main image: Train burning in Lac-Mégantic, Quebec. Credit: Transportation Safety Board of Canada, CC BY–NC–ND 2.0

Crude By Rail, Derailment, Explosion, Insurance and liability, Public Safety, Risk Assessment, Worst case scenario

Oil Train Insurance: Washington State and the Billion Dollar Disaster

Repost from STAND

Oil Train Insurance: Washington State and the Billion Dollar Disaster

By Alex Ramel, extreme oil campaign field director, March 28, 2016
WA Dept of Ecology

Washington is now one of only two states that requires railroads to disclose whether they have sufficient insurance to cover a “reasonable worst case spill.” This is a step in the right direction. But the new rule falls far short of requiring enough insurance to cover a catastrophic oil train derailment, spill and explosion.

The new State rule requires that any major rail company operating in Washington — today, only BNSF — report whether they have sufficient financial resources or insurance to cover the costs of an oil train spill of around $700 million (smaller railroads have smaller requirements). That’s better than nothing, which is what most states have. But it’s not nearly enough.

The deadly Lac Megantic oil train disaster cost more than $1 billion (see page 98 in the federal regulations) and the cost of rebuilding is more like $2.7 billion. As terrible as the Lac Megantic disaster was, and it was a heartbreaking catastrophe, a worst case oil train disaster in Washington could be even much worse.

Washington State’s failure to require railroads to pay the full and true cost of doing business in Washington is an even greater concern if it becomes a precedent in other states. The confusing, undefined phrase “reasonable worst case” appears to have already been copied into a proposed bill in the New York State Assembly.

The federal Pipeline and Hazardous Materials Safety Administration suggested that a disaster inside a major city could cost $12.6 billion (see page 110). What could a $12 billion derailment look like? BNSF runs oil trains within 20 yards of Safeco Field in downtown Seattle during Mariners games when fans are in the stands.

Insurance monetizes risk, assigning a direct cost to risky behavior and assigning financial value to safety. What would your homeowners insurance company do if you wanted to unload oil tanker trucks in your driveway? They would raise your rates (astronomically) or cancel your policy. Railroads, which operate without requirements to carry adequate insurance, make decisions about assuming risk without an important financial feedback loop. If railroads had to be properly insured for the risk to life, property, and the environment from oil trains, there would be far fewer or zero oil trains.

Last year BNSF was fined for 14 spills and leaks and for failing to report problems along the track in Washington. The summer before that three oil tank cars tipped over in downtown Seattle. Over the last two years four BNSF oil trains have derailed and either spilled or exploded in Casselton, ND, Galena, IL, Heimdal, ND, and Culbertson, MT. Under usual circumstances a safety record like that should lead to a very awkward conversation with an insurance agent. And an already expensive, high-risk policy should get even more expensive. But BNSF doesn’t seem to carry enough insurance to cover the real cost of an oil train disaster, and they don’t seem to care.

BNSF has already intimated that they don’t think that the state should be able to require insurance, and it is likely that the company will challenge the rule. The railroad wants the cost of insurance and the calculation of possible damages kept off of their books. That means that in addition to living with the risk, the public is also asked to shoulder the cost. That’s the most unreasonable proposition yet.

Biofuels, California Air Resources Board (CARB), California Energy Commission, California Regulation, Cap-and-trade, Clean fuel standard, Climate Change, Ethanol, Global warming, Low carbon fuel standard, Oil Industry, Oil industry lobby

Sacramento: Oil firms challenge state over clean fuel

Repost from SFGate

Clean fuels shaping up as fight of the year in Sacramento

New battle lines drawn in fight over low-carbon policy
By Laurel Rosenhall, CALmatters, Mar 5, 2016 Updated: 3/6/16 3:33pm
A pending fight over low-carbon fuel standards could hinge on how they affect the state’s cap-and-trade system for carbon emissions. Photo: Ted S. Warren, AP
A pending fight over low-carbon fuel standards could hinge on how they affect the state’s cap-and-trade system for carbon emissions. Photo: Ted S. Warren, AP

A Harvard economist known globally for his work on climate change policy sat in the Sacramento office of the oil industry’s lobbying firm recently, making the case that California is fighting global warming the wrong way.

The state has a good cap and trade system, Robert Stavins said, but some of its other environmental policies are weakening it. He pointed to a rule known as the low carbon fuel standard, which is supposed to increase production of clean fuels.

Environmental advocates consider it a complement to the cap and trade program that makes industry pay for emitting carbon; Stavins had other words.

“It’s contradictory. It’s counter-productive. It’s perverse,” he said. “I would recommend eliminating it.”

California’s low carbon fuel policy is shaping up as a major fight this year for the state’s oil industry, an influential behemoth that spent more than $10.9 million lobbying Sacramento last year, more than any other interest group.

“There’s a storm coming,” biofuels lobbyist Chris Hessler told a roomful of clean energy advocates at a recent conference on low carbon fuels. “If we don’t meet this attack vigorously, we’re all going to be in a lot of trouble.”

NEW BATTLE LINES

The oil industry was front and center in the biggest fight to hit the state Capitol last year: a proposal to cut California’s petroleum consumption in half over the next 15 years to slow the pace of climate change. The industry won its battle when lawmakers stripped the oil provision from Senate Bill 350.

But California’s larger oil war is far from over, and the newest battle lines are beginning to emerge.

Gov. Jerry Brown is plowing ahead with plans to cut vehicle oil use in half through executive orders and regulations like the low carbon fuel standard. The standard requires producers to cut the carbon intensity of their fuels 10 percent by 2020. To reach the standard, refineries will have to make a blend that uses more alternative fuels — like ethanol — and less oil.

The program was adopted in 2009 but was locked in a court battle for years. California regulators prevailed, and took action last year to resume the program. Now producers must start changing the way they formulate their fuel or buy credits if their product is over the limit.

That’s led to higher costs for fuel makers, which they are passing on to consumers at a rate of about 4 cents per gallon, according to the California Energy Commission. But the price is likely to keep increasing, the oil industry warns, as it gets tougher to meet the standard that increases over time.

Which is where Stavins’ argument comes in. It goes like this: the cleaner fuels required by the low carbon fuel standard will emit less greenhouse gas. That will reduce the need for fuel producers to buy permits in the cap and trade system (which makes industry pay for emitting climate-warming pollution) and create additional emissions by allowing other manufacturers to buy the pollution permits.

Less demand will also depress prices on the cap and trade market.

Stavins is the director of Harvard’s Environmental Economics Program and part of the Intergovernmental Panel on Climate Change, a prestigious group of experts who review research for the United Nations.

He’s also an advisor to the Western States Petroleum Association, which paid him to make the trip to Sacramento, where he talked with reporters before a day of meetings with lawmakers and business leaders.

Environmental advocates and California clean air regulators reject his view. They say the fuel standard works in harmony with other carbon-reducing programs and it’s an important piece of California’s effort to achieve its climate change goals.

“One of the major goals of the low carbon fuel standard… is to drive innovation of new and alternative low carbon fuels,” said Stanley Young, spokesman for the California Air Resources Board. “The cap and trade program on its own cannot do that.”

Alternative fuel producers gathered in a ballroom near the Capitol days after Stavins’ visit to Sacramento. During a presentation on the rising price of low carbon fuel credits, Hessler, the biofuels lobbyist, warned that the program is coming under “political attack.”

He defended the fuel standard by saying the regulation limits the price of the credits, and the cost to consumers will be kept down as some fuel producers make money by selling credits to others. He urged conference participants to share his information with California policymakers to counter opposition to the low carbon fuel standard.

“We’ve got to be ready for this,” Hessler said.

HOW THINGS COULD GO DOWN

A fight last year over a low carbon fuel standard in the state of Washington may provide some clues about how things could go down here.

There, Democratic Gov. Jay Inslee proposed a low carbon fuel standard but failed to earn enough support for it in the Legislature. The fuel standard became a bargaining chip for Republicans in negotiations about funding for transportation infrastructure.

Here in California, lawmakers and Gov. Brown are also negotiating a plan to pay for a backlog of repairs to state roads and highways. Brown has pitched spending $36 billion over the next decade with a mix of taxes and other revenue sources.

Republican votes are necessary to reach the two-thirds threshold for approving new taxes. So far, Republicans have balked at the plan, with some suggesting that the fuel standard should be included in the negotiations.

“As we’re having the discussions about transportation funding in general in California, and transportation taxes in particular, this ought to be part of the discussion,” said Assemblyman Jay Obernolte, R-Hesperia.

It’s a message echoed by the president of the Western States Petroleum Association, which advocated against the low carbon fuel standard in Washington.

Catherine Reheis-Boyd said she wants California lawmakers to “take a very hard look” at the low carbon fuel standard as they consider the future of climate change policies and the desire to repair the state’s roads.

“All those things interplay,” Reheis-Boyd said. “That’s a big conversation. I think people across the state are willing to have it, and I think we’re at a pivotal point to have it this year.”

CALmatters is a nonprofit journalism venture dedicated to explaining state policies and politics. For more news analysis by Laurel Rosenhall go to https://calmatters.org/newsanalysis/.