Tag Archives: Washington State

Alon USA Energy, Bakersfield CA, Crude By Rail

Oil-by-rail project for shut California refinery near approval

Repost from Reuters
[Editor: Significant quote: “…proposals have faced lengthy delays for comprehensive environmental reviews, public input, and revisions.  Valero Energy Corp, the largest U.S. refiner, postponed its plans to send crude by rail to its San Francisco-area refinery because of such delays, and withdrew permit applications for a similar project at its Los Angeles plant….’I think Bakersfield is probably the best place to build a rail facility in California, because it’s not sitting in San Francisco or LA, and it has access to pipes going north and south. It just seems like it’s going to be a struggle to develop rail in other locations,’ Plains’ Chief Operating Officer Harry Pefanis told analysts in May.”  – RS]

Oil-by-rail project for shut California refinery near approval

Kristen Hays, August 15 2014

(Reuters) – The first new crude-by-rail project at a California refinery is likely to win approval next month after more than a year of scrutiny, the head of the Kern County planning division told Reuters, and it could help reopen the shuttered plant.

The facility at independent refiner Alon USA Energy Inc’s Bakersfield plant would increase crude offloading capacity to 140,000 barrels per day from its current 13,000 bpd and open up significant access to cheaper inland U.S. and Canadian crudes.

Alon’s Bakersfield plant is in Kern County, home to about 65 percent of all California oil production, where crude has been produced for more than a century.

Alon shut the 70,000 bpd Bakersfield refinery in late 2012 because its reliance on more expensive imports and lack of access to other crudes without significant rail rendered the plant unprofitable.

Other California refiners also struggle with profitability because of reliance on expensive imported crude and costly fuel manufacturing regulations in the biggest gasoline market in the country.

“We’re supportive of what Alon is doing with this refinery,” said Lorelei Oviatt, director of the county’s planning and community development department. “This refinery is not operating at full capacity. We would like to see this refinery operating at full capacity.”

Alon didn’t respond to requests for comment.

The Alon project is among several proposed at California refineries, some of which face growing opposition in light of a spate of crude train crashes in the past year as the U.S. oil boom sent amounts of crude moving by train soaring.

The worst by far was in Quebec in July last year when a runaway crude train exploded in the town of Lac-Megantic, killing 47 people.

Several California refiners, largely isolated by the Rocky Mountains from the growing cheap bounty from oilfields in Texas, North Dakota and Canada, want to tap those sources via rail because no major pipelines carry crude from those areas into the Golden State, nor are any planned.

More than half of the 1.7 million barrels of crude processed by California refiners each day is imported.

But proposals have faced lengthy delays for comprehensive environmental reviews, public input, and revisions.

Valero Energy Corp, the largest U.S. refiner, postponed its plans to send crude by rail to its San Francisco-area refinery because of such delays, and withdrew permit applications for a similar project at its Los Angeles plant.

Kinder Morgan Energy Partners operates the state’s most substantial oil-by-rail facility at a terminal in Richmond, which handles up to 72,000 bpd. Local planners last year approved, without an environmental review, a revised ethanol offloading permit to allow the terminal to handle crude. But opponents are suing to temporarily shut it down and force that kind of review.

Tesoro Corp faces similar growing opposition for a 360,000-bpd railport project in southwest Washington state that could ship crude to California refineries by tanker.

That could let California refiners – which includes Tesoro’s Los Angeles-area plant – replace more than 40 percent of more expensive imported oil with North American crudes if all of it were shipped to the state.

Alon is considering possibly leaving the Bakersfield refinery shut and running the facility as a rail and logistics terminal.

If the refinery remains shut, the rail operation would be similar to a separate 70,000-bpd oil-by-rail facility Plains All American plans to open in October and eventually expand to 140,000 bpd. That project was approved two years ago before it was acquired by Plains.

Alon bought the Bakersfield plant out of bankruptcy in 2010 from Flying J Inc, which had shut it in early 2009 shortly after seeking bankruptcy protection. Alon restarted the hydrocracker in the summer of 2011, but operational problems led to more shutdowns and startups.

David Hackett, president of Stillwater Associates, a refining consultancy in Irvine, California, said the refinery’s spotty operational history may better support a future as a rail hub.

“They haven’t run it as a refinery in a long time. I don’t think they’ll restart Bakersfield, and I don’t understand why they didn’t pull this off two years ago,” he said.

ESTABLISHED OIL HUB

Bakersfield sits in the center of the state’s oil production where the oil industry is long established. Plains executives have said its crude-friendly climate and existing infrastructure make the area more attractive for such projects.

“I think Bakersfield is probably the best place to build a rail facility in California, because it’s not sitting in San Francisco or LA, and it has access to pipes going north and south. It just seems like it’s going to be a struggle to develop rail in other locations,” Plains’ Chief Operating Officer Harry Pefanis told analysts in May.

Alon had hoped to have its Bakersfield rail project up and running by the end of 2013, but it, like others in the state, underwent a lengthy environmental review and public comment.

Oviatt said the Kern County planning department had considered all issues during that review, including safety and spill preparedness.

Now the project is slated to go before the county’s board of supervisors for a vote at a Sept. 9 public hearing. Oviatt, who is not one of the five members of the board, said she expected a final decision at that time.

The planning department has signed off on it, and Oviatt said the board tended to be supportive of business.

“I can’t say how the board would vote, but I do believe that given their business-friendly attitude, they’re going to take all of this into serious consideration.”

(Reporting by Kristen Hays in Houston; Editing by Terry Wade, Lisa Shumaker, Jessica Resnick-Ault and Phil Berlowitz)
Crude Oil, Hazmat notification, Washington State

NW states poll: residents support oil trains, but don’t know much about them

Repost from Walowa.com (Walowa County, WA)
[Editor: Significant quote: “Eric de Place, policy director for the Seattle-based think tank Sightline Institute, draws a connection between how much people know about oil trains and how much they support such projects….’What we’ve seen so far is that the more people know about these projects, the less they like them,’ De Place said.”  – RS]

Poll: Most Northwest Residents Support Oil Trains But Don’t Know Much About The Issue

July 9, 2014, Tony Schick, Cassandra Profita, EarthFix

A 56-percent majority of Northwest residents support the transportation of oil by rail to reach West Coast refineries, with the refined oil being used for domestic purposes, according to a new DHM Research poll for EarthFix.

However, a 54-percent majority said they have heard or read little or nothing about oil trains.

The poll surveyed 1,200 residents across the Northwest 400 each in Oregon, Washington and Idaho from June 25-30. The margin of error for each state’s results was 4.9 percent. the three-state regional results had a margin of error of 2.8 percent.

Several oil-by-rail projects across the region have raised safety and environmental concerns, and opponent groups are working to stop some projects from moving forward. Oil train derailments in the U.S. have caused explosions and fires in the past year, and one derailment in Canada killed 47 people.

But most of the Northwest residents polled disagreed with opponents who argue that the risks of transporting oil by rail are too high. Only 32 percent of respondents agreed that oil-by-rail shipments should be stopped to protect public safety and the environment. Fifty-three percent of respondents said they disagreed and 15 percent said they don’t know.

John Horvick, vice president and director of research for DHM, said the poll shows the most people aren’t opposed to the idea of oil trains.

“At least, they’re not opposed,” he said. “I don’t know that there’s a ton of enthusiasm necessarily.”

A majority of respondents 66 percent said railroads have good safety records and will do their best to prevent accidents and spills when transporting oil by train.

“For the most part, people overwhelmingly thought the railroads can be trusted to handle this,” Horvick said.

Statistically speaking, major derailments or collisions on railroads are rare. But a recent EarthFix story revealed many within the railroad industry have concerns about railroads’ commitments to safety.

Most people polled said they hold businesses in the oil industry as well as elected officials and governments responsible for preventing oil train accidents and spills. While 88 percent said businesses in the oil industry need to prevent accidents and spills, 73 percent said elected officials and others in government need to prevent accidents and spills.

At the Port of St. Helens industrial park in Clatskanie, Oregon — the most frequent destination for oil trains through Oregon accepting three per week — terminal owner Global Partners has announced it will only accept oil in newer model tank cars with added armor. The vast majority of tank cars in use today are an older model long known to be prone to punctures.

Patrick Trapp, executive director at the Port of St. Helens, said the crude by rail project as helped the port maintain roughly 50 jobs, a significant number for Columbia County, and carries the potential for 30 more. He also said the port favors handling domestic oil headed to a West Coast refinery.

“This is their business — they want it to be done safely. They expect it to be done safely,” Trapp said. “I can’t speak for other projects across the state or the region, but for our area here it’s been going on for about a year and a half now and they’ve been doing it very responsibly, very methodically.”

DHM Research poll results also show many people in the Northwest aren’t following the issue of oil train safety. The survey asked people how much they’ve heard or read about oil trains in their state. Across the region, 27 percent residents said “nothing” while another 27 percent said “not much.”

Horvick said that’s not surprising.

“For most people across the Northwest region, this isn’t something that’s happening in their backyard,” he said. “For many people who aren’t living in communities with trains passing through this may be out of sight, out of mind.”

Eric de Place, policy director for the Seattle-based think tank Sightline Institute, draws a connection between how much people know about oil trains and how much they support such projects.

“What we’ve seen so far is that the more people know about these projects, the less they like them,” De Place said. He said public opinion polls he’s seen tend to show support wanes as the public becomes more informed. “Right now we’re still in a place where most people haven’t heard of the projects or don’t really understand the dynamics around them.”

The Sightline Institute has examined crude by rail extensively in the Northwest, and has been critical of many projects. An analysis by the institute in May showed the Northwest averages nine freight train derailments per month, most of them minor.

De Place pointed out that survey respondents specifically supported crude by rail if the oil is being used for domestic purposes, which may not be the case once it reaches refineries. Crude oil exports have been banned for 40 years, but many in Congress have been calling for an end to the ban, which was recently loosened. In 2011, the U.S. exported more petroleum product such as gasoline and diesel than it imported for the first time since 1949.

The poll also found more people support restricting information about oil train routes to regulators and first responders rather than releasing it to the public.

That information became the subject of a transparency debate after the U.S. Department of Transportation ordered railroads to provide it to states. Railroads then asked states for nondisclosure agreements. Oregon and Washington both eventually made the information available free of charge after receiving several public records requests. Some states remain undecided.

When asked whether the public should know for the safety of the community when oil is being shipped on trains through their area, only 34 percent of residents said yes. When asked if only regulators and first responders should know when oil is being shipped on trains through their area to prevent possible attacks, 47 percent of respondents said yes.

Horvick said those results did surprise him.

“I would have thought it would have been the reverse,” he said. “”When we do polling on any number of issues that get at the question of transparency and information to the public, the default position for people tends to be the more information the better. That my government shouldn’t hide or prevent me from knowing anything. … But at least framed up this way they’re willing to withhold some information if it is to prevent a possible attack.”

Support for oil trains was a little higher in Idaho at 64 percent compared with 59 percent support in Oregon and 53 percent support in Washington. Overall, 21 percent of those polled said they don’t know whether they support or oppose the idea of shipping oil by rail.

Earthfix Survey Oil Trains by State June 2014.  This story originally appeared through the EarthFix public media collaboration.
Crude By Rail, Hazmat notification, Washington State

Washington State: BNSF discloses weekly variations in number of oil trains

Repost from The Columbian

BNSF reports drop in Washington oil train shipments

By Phuong Le, The Associated Press, July 7, 2014

SEATTLE — The latest disclosure from BNSF Railway shows a drop in the number of volatile oil train shipments that moved through Washington state in a single week.

BNSF Railway previously reported as many as 19 trains of Bakken crude oil traversed the state during the week of May 29 to June 4. They updated those numbers to show as many as 13 oil trains during the following week.

State officials released the updated information Monday in response to a public records request from The Associated Press.

While the actual weekly counts fluctuated, the average high and low reported by BNSF remained the same.

On average, as many as 18 trains move through Washington state. The trains traversed 16 counties, with Lincoln County topping the list with an average weekly high of 18 and a low of 15. King County, on average, sees as many as 13 and as few as 8 a week.

The railroad had sought to keep information about oil train shipments from the public, but the state declined to sign a confidentiality agreement and provided it under the state public records law.

BNSF spokeswoman Courtney Wallace said freight traffic can fluctuate daily or weekly. “There are ebbs and flows. It depends on the market demand and the needs of our customer,” she said Monday.

Kerry McHugh, a spokesman for the Washington Environmental Council, said the oil shipments pose a risk to communities and waterways.

“If you think about the amount of oil traveling through Washington versus in 2010, it’s a dramatic change. You have to look at it as an overall change, not on a week-by-week basis.”

A lot of information is coming out, but it’s only a start, McHugh added.

Gov. Jay Inslee last month directed state agencies to the risk of accidents along rail lines, assess the relative risk of Bakken crude oil compared to other forms of crude oil, and begin developing oil-spill response plans for affected counties. The Department of Ecology is expected to come up with budget recommendations and initial findings by Oct. 1.

In May, the U.S. Department of Transportation issued an emergency order requiring railroads to notify state officials about the volume, frequency and county-by-county routes of trains carrying 1 million or more gallons of crude oil from the Bakken region of North Dakota, Montana and parts of Canada.

The order requires railroads to tell state emergency managers if oil train traffic increases or decreases by 25 percent, which prompted BNSF’s latest notification.

For the week of June 5 to June 11, 13 oil trains passed through BNSF tracks in eight counties: Adams, Benton, Clark, Franklin, Klickitat, Lincoln, Skamania and Spokane.

Crude By Rail, Hazmat notification, Oil prices

Farm Bureau posts Wenatchee Washington opinion: No Oil Trains Here

Repost from The Farm Bureau’s FBACT Insider (The Unified National Voice of Agriculture)
[Editor: I was heartened to learn that the Farm Bureau has a progressive agenda on energy.  See http://www.fbactinsider.org/issues/energy.  – RS]

OPINION: Move along, no oil trains here

June 27, 2014 – The Wenatchee World

June 26–Peak oil? Not yet. Like it or not, the United States now is among the world’s leading oil producers, pumping around 9 million barrels a day and rising. That’s not far behind Saudi Arabia, and makes a lot of sheikdoms look puny. And like it or not, this compressed energy will be burned to turn the economic wheels of the world. To get from producer to customer, however, it has to go somewhere.

Just not here.

The information reluctantly released Tuesday shows that in the absence of pipelines the railways of the northern tier have become, not exactly pipelines on wheels, but getting closer. Information on oil shipments by rail was provided to states and emergency responders by order of the Department of Transportation earlier this month, with the expectation that it be kept confidential for security reasons. Then DOT ruled there really weren’t any security reasons, and so the train data hit the wires on Tuesday.

The report from BNSF detailed one week of shipments late in May of light crude from the Bakken field of North Dakota. It showed not what rail lines were used, but where trains traveled by county. These are loaded trains of at least 1 million gallons of crude, but often around 3 million gallons. Around 18 such trains a week enter Washington, mostly through Spokane, and apparently traveling south through the Tri-Cities and down the Columbia Gorge. Some then make their way north.

Spokane County saw 16 trains for the week; Lincoln, 17; Adams, Benton, Franklin, Skamania and Clark, 18; Pierce, 15; King, 11; Snohomish, 10; Skagit, 9; Whatcom, 5. Kittitas, Grant, Douglas and Chelan — 0.

So as expected, no heavy oil trains make the heights of Stevens Pass, although we have seen empties headed east.

The mounting news makes it look likely that we will see more and more tank cars passing through. Just this week is was announced that the Commerce Department had agreed to allow two Texas companies to export small amounts of lightly refined oil, possibly creating a tiny fracture in the 40-year-old ban on U.S. oil exports. The Obama administration and experts were quick to downplay this, saying it didn’t constitute an end to the embargo, which would require congressional approval. But it was a big enough crack in the door to raise Texas crude prices and drop oil stocks.

No one still alive can recall exactly why the United States forbid its oil to be exported, except that the people in government are always excessively paranoid about gasoline prices rising for reasons other than increased taxation. Also, at its peak the United States imported 60 percent of its oil needs. Now that’s down near 40 percent. The experts say a full-fledged end to the export embargo would raise crude prices at home, and make world markets less volatile. All that just increases the incentive to hunt, drill, frack and pump.

Exports are, almost always, good for a nation’s economy, and so oil transport will have a future on the West Coast. We will see. Remember that rail shipments of oil in Washington were zero as recently as 2011. The state estimates they hit 17 million barrels in 2013, and some say that could triple.

Remember, it will be burned. Some 25 years ago, the International Energy Agency estimated that fossil fuels provided 82 percent of the world’s energy consumption. After decades and billions invested in renewable energy, the IEA announced in February, that of all the world’s energy consumption, fossil fuels provide … 82 percent.