Category Archives: Bakken Crude

Long-awaited Valero crude-by-rail EIR delayed again

Repost from The Benicia Herald
[Editor: See also coverage in The Sacramento Bee  – RS]

Long-awaited Valero crude-by-rail EIR delayed again

June 9, 2014 by Donna Beth Weilenman

A draft of the city’s environmental impact report (EIR) for the Valero Crude-by-Rail use permit request was due to be released Tuesday, but a last-minute staff decision has delayed the report by a week, Benicia Principal Planner Amy Million said.

“City staff determined that additional information was needed to more completely address potential air quality impacts in the Draft EIR,” Million said late Monday. “As a result, the release of the document has been delayed by one week.”

When the report is released June 17, it will be available online from the city’s website, www.ci.benicia.ca.us, but viewers shouldn’t use the website’s search box to find it, Million said.

“The best way to find the most recent CBR (Crude-by-Rail) page is to go directly to the department,” she said. In this case, a viewer would look for Community Development under the “City Departments” bar.

This will give viewers options for “Planning” and “Current Projects,” where they will find a listing for “Valero Crude-by-Rail.”

“Unfortunately, the search box can pull up old versions of the Web page, so we are working on fixing that today,” Million said Monday.

Those who want copies of the document on disk may call Million at the Community Development Department, 707-476-4280. A limited supply of paper copies — 20 — also will be available at no cost, she said.

“Pursuant to the Benicia Municipal Code, the city will provide 20 copies on a first-come, first-served basis at no cost, available immediately,” she said.

After that, those wanting paper copies will have to pay, she said, but how much hasn’t been determined.

“I am still waiting for confirmation on the cost after that and the turnaround time,” she said. As of Monday, she said the number of pages of the document hadn’t been determined.

Paper copies, available for reading by the public, will be available at the Community Development Department at City Hall, 250 East L St., as well as in the Benicia Public Library, 250 East L St.

The city originally drafted a mitigated negative declaration as its response to requirements by the California Environmental Quality Act (CEQA).

But extensive public comment, both favoring and opposing the project, heard at several city meetings led the city to undertake the more extensive environmental report, which originally was expected before the end of last year.

The public will be given 45 days to read and comment on the document, Million said. State law requires a minimum of 45 days for the review, though it limits the maximum days to 60.

She said Monday, “Staff intends on releasing it for a 45-day review period. If the Planning Commission believes that a longer review period is needed because of articulated unusual circumstances, the Planning Commission may decide to extend the comment period.”

Benicians for a Safe and Healthy Community, organized to block the Valero project, has asked for a 90-day review period.

“As part of the process for any discretionary action, public comment is accepted until the final decision,” Million said late last year, though she said CEQA is “a concurrent but separate process and has specific guidelines for public input.”

Thoughts and opinions shared after CEQA comment periods have closed are incorporated into the record for the project, even though the comments aren’t considered “official,” she said. “This distinction is important for insuring consistency and diligent processing of development applications.”

Those interested may offer their comments before the Planning Commission July 12 at 7 p.m. at City Hall. But the commission won’t be voting on the project’s use permit that night.

As proposed in December 2012, Valero Benicia Refinery has asked permission to build the $30 million project of three railroad track extensions, each a quarter-mile long, so 70,000 barrels of crude oil could be brought in daily by rail instead of through pipelines or aboard ocean-going tanker ships.

Proponents, including Union Pacific Railroad, have said the project would be more environmentally friendly than tanker ships and pipelines.

Bill Day, Valero Energy’s director of corporate communications, has pointed out the project would reduce Valero’s shipments of foreign-source oil.

“It would allow the refinery to offset supplies of foreign crude brought in by ship with increasing supplies of North American crude oil,” Day said. North American crude has few transport alternatives other than by rail, he said.

While the refinery has only hinted at the source of the domestic crude, many expect that it’s the North Dakota Bakken fields, which has been producing up to a million barrels of a light, sweet crude.

However, while tar sands is too heavy and sour to be processed at the Benicia plant, the Bakken crude is too sweet and light to be processed alone.

At a public meeting in March, refinery officials explained that to meet the sulfur and gravity parameters of what the Benicia plant can refine, the oil arriving by train could be a blend of the two.

“Any viable crude we can safely refine, we will,” said Don Cuffel, Valero Benicia Refinery manager of the Environmental Engineer Group, though he added that the refinery’s permits won’t let it produce more emissions.

“Locomotives emit less than ships,” Cuffel said that night, explaining that on a per-barrel basis, emissions would decline during delivery.

Nor would refinery emissions themselves increase during processing, because the Bay Area Air Quality Management District restricts how much emissions the refinery can produce, he said.

Originally, opponents of the crude-by-rail proposal spoke out against the air polluting hazards of dealing with tar sands, anticipating the oil would be coming from Canada.

But several fiery incidents during the past year turned their focus to the greater volatility of the Bakken crude as well as federal standards for the tanker cars that carry the oil, since 60 percent of it travels by rail.

Nearly a year ago, a 72-car oil train carrying 2 million gallons of flammable crude was left unoccupied in Lac-Mégantic, Quebec. It came loose and began sliding downhill so fast that it derailed, caught fire and killed 47 in the small town.

The accident spilled 1.5 million gallons of crude and caused more than $1 billion in damages.

An oil train derailed in November 2013 and caught fire in Alabama; a month later another train erupted in flames after derailing in North Dakota. More tanker cars caught fire after a derailment in Virginia.

The U.S. Department of Transportation issued an emergency order requiring railroads that operate trains carrying large amounts of Bakken crude to tell State Emergency Response Commissions about those trains’ operations in their states.

DOT’s Federal Railroad Administration and Pipeline and Hazardous Materials Safety Administration both have urged shippers, particularly those selling Bakken crude, to use tank cars with “the highest level of integrity available in their fleets.”

State Sen. Lois Wolk, D-Davis, who represents Benicia, asked legislators Friday for their support for a proposal to strengthen the state railroad safety inspection force, especially where crude shipments go through heavily populated areas.

Rail shipments of crude oil in California like those proposed by Valero are slated to increase 25-fold in the next few years, according to the California Public Utilities Commission (PUC) and California Energy Commission, Wolk said.

“However, there has not been a corresponding increase in regulatory oversight capacity to address this significant increase in risk to California’s citizens,” Wolk said in a letter to members of the Legislature’s Budget Conference Committee.

That committee is scheduled to hear Gov. Jerry Brown’s budget proposal to add seven inspectors to the PUC’s railroad safety staff.

That’s not enough for Wolk, who said, “Additional oversight is needed to provide some assurance that these shipments are made safely and in compliance with federal and state regulations, as well as other known safety practices.”

Valero’s proposal “has elicited concern from public and elected officials regarding the safety risks of transporting crude oil through Benicia and other densely populated areas of Northern California,” Wolk said.

“An event such as Lac Mégantic could have catastrophic effects if it occurred in any populated area of California. Other concerns include the potential for increased commuter traffic.”

Fears about fiery crashes and pollution have led to marches and other protests on both sides of the Carquinez Strait by those who want to see the Valero project halted and shipments of crude by rail stopped or made safer as more oil-filled cars pass through the Bay Area.

Normally, railroads don’t own the cars used to carry various products. They’re owned or leased by the client.

However, BNSF Railroad is in the process of ordering thousands of tanker cars it says would exceed federal standards, and Valero officials have said they would be using the stronger cars as well.

Valero’s project is on refinery property, and normally wouldn’t need a use permit for construction and operation that fits what is allowed in the zoning district.

However, the cost of the project exceeds the $20 million threshold that triggers the use permit process, according to Charlie Knox, who at the time was Benicia’s director of community development.

Nor is Valero allowed to break the project into segments to avoid seeking the permit, Knox said.

The refinery is asking permission to build two offloading rail spurs, a parallel engine runaround track and a “wye,” or triangular connector track, on refinery property so it can receive the rail cars at the offloading tracks.

If the project is approved and built, the refinery could receive between 50 and 100 additional rail cars twice a day.

In addition to examining any impact to Sulphur Springs Creek, the draft report also is expected to address how the trains would impact Benicia Industrial Park traffic.

The project is being reviewed for the city by CSA, a Michigan firm, with Valero paying for the review, as well as Environmental Resources Management, a global company with offices in Sacramento and Walnut Creek.

Sen. Lois Wolk calls for stronger safety inspection regulations

Repost from The Vacaville Reporter
[Editor: See also coverage in The Daily Democrat, The Davis Vanguard.  – RS]

Wolk urges more regulation on rail crude oil shipments to Solano refinery

By Reporter Staff  |  06/09/2014

The battle over local crude oil rail shipments moved to Sacramento late last week as Senator Lois Wolk, D-Solano, called on legislators Friday to support a proposal to strengthen the state’s railroad safety inspection force.

Wolk is seeking the inspection upgrade in light of the growing volume of crude oil shipments through heavily populated areas of California and numerous crude oil rail accidents in recent years.

In a letter sent in advance of today’s scheduled release of a draft Environmental Impact Report on a proposal to transport crude oil through the heart of the Capitol Corridor to the Valero Refining Company in the city of Benicia, Wolk laments a lack of increased regulatory oversight for such shipments. Rail shipments of crude oil in California like those proposed by Valero are slated to increase 25-fold in the next few years, according to the California Public Utilities Commission (PUC) and California Energy Commission.

“However, there has not been a corresponding increase in regulatory oversight capacity to address this significant increase in risk to California’s citizens,” Wolk wrote in the letter to members of the Legislature’s Budget Conference Committee, scheduled to hear Governor Edmund G. Brown’s budget proposal to add seven inspectors to the PUC’s railroad safety staff. “Additional oversight is needed to provide some assurance that these shipments are made safely and in compliance with federal and state regulations, as well as other known safety practices.”

Several destructive crude oil rail accidents have taken place in the U.S. and Canada in recent years, including the July 2013 derailment of 72 tanker cars loaded with 2 million gallons of flammable crude oil in Lac-Mégantic, Canada, that resulted in 47 deaths, more than $1 billion in damages, and 1.5 million gallons of spilled crude oil, Wolk noted.

Valero’s proposal has elicited concern from public and elected officials regarding the safety risks of transporting crude oil through Benicia and other densely populated areas of Northern California. Other concerns include the potential for increased commuter traffic.

“An event such as Lac Mégantic could have catastrophic effects if it occurred in any populated area of California,” Wolk said.

The Valero proposal seeks to add three rail tracks and an off-loading track on Valero’s property to allow crude oil to be transported into the refinery. Currently, crude oil is delivered into Valero Benicia through pipeline and ships.

During a meeting in Benicia earlier this spring, company officials said that the railroad addition would make the refinery more competitive by allowing it to process more discounted North American crude oil. They insisted that the railroad traffic up to 100 tank cars per day would not affect the region’s air quality, and safety standards would be met.

“It would not increase crude delivery, just make it more flexible,” John Hill, vice president and general manager of the refinery, told citizens at the meeting.

Another point of contention was the type of crude oil that would be transported into Benicia by rail.

An opposition group, Benicians for a Safe and Healthy Community, said the project will allow the delivery of the highly flammable Bakken crude from North Dakota. Concerns also have been raised about the possible use of Canadian tar sands oil, regarded as more polluting than other crudes.

However, officials said there will be no change in the delivered type of crude. They said the refinery can, and will be able to, handle any blend of crude oil as long as it meets density and sulfur requirements for its facility. They did not disqualify Bakken crude as a possible part of a blend.

Times-Herald, Vallejo staff contributed to this report.

Canada is aggressive on crude by rail regulation; the US, not so much

Repost from Platt McGraw Hill Financial – The Barrel

Regulation & Environment: Canada’s aggressive on crude oil by rail regs; the US, not so much

By Herman Wang | June 9, 2014

It has been 338 days since the explosive derailment of a train carrying crude oil killed 47 people in Lac-Mégantic, Quebec.

Meanwhile, 227 days have passed since an oil train derailed and exploded in Alabama, spilling 750,000 gallons of crude, and 161 days since another oil train ignited in North Dakota, spilling 400,000 gallons and forcing the evacuation of the town of Casselton.

And yet, despite these and several other recent accidents attributed to the spike in North American crude-by-rail traffic, US officials have yet to publicly unveil any new comprehensive safety regulations and tank car specifications. Those rules are not likely to be revealed until later this summer—and possibly not finalized until year’s end—thanks to the US’ lengthy, consultative rulemaking process.

That puts the US far behind Canada, which typically follows the US’ lead on rail regulations.

Canada on April 23 set an aggressive deadline of May 2017 for the total removal or retrofit of all legacy DOT-111 tank cars used to ship crude oil and ethanol from Western Canada to refineries and also ordered the immediate removal of 5,000 “substandard” tank cars without continuous bottom-level protection layers.

Canada was able to move relatively quickly on its crude-by-rail safety rules because of a requirement that the government respond within 90 days to any recommendation by the country’s investigatory Transportation Safety Board, which in January had called for more stringent DOT-111 standards in the wake of the Lac-Mégantic accident.

The US has no such requirement, and despite the US National Transportation Safety Board having recommended since 2012 more robust tank car requirements, regulators are still muddling through their rulemaking, much to the dismay of safety advocates who would like to see quicker action. About 650,000 carloads of crude are expected to be shipped by rail in 2014, according to the rail industry, compared to just 9,500 carloads in 2008.

The US Department of Transportation on April 30 did submit a crude-by-rail rulemaking package, including tank car specifications, to the White House Office of Information and Regulatory Affairs for review, but no details of the regulations are publicly available, leading to much speculation on what they might contain.

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The White House, under processes outlined in the Administrative Procedure Act, typically reviews “significant” regulations for up to 90 days, including performing an economic analysis. The DOT estimates that the crude-by-rail review will conclude by mid-July, at which time, the DOT would unveil the draft proposal in the publicly viewable Federal Register.

A 60-day public comment period would follow, after which the DOT may incorporate some of those comments into a final rule. That final rule would then be submitted to the White House for another review, before it is finalized, published in the Federal Register and made effective.

The intent of the exhaustive US rulemaking system is to gather as much stakeholder input as possible and to allow for careful cost-benefit analyses and alternative solutions to be explored, inefficient though the process may be. And it is not unheard of for controversial rulemakings to be mysteriously delayed until a less politically sensitive time, such as after an election has passed.

For crude-by-rail, the regulations look on pace to be finalized by the end of the year or perhaps early 2015, though DOT officials have pledged to accelerate that timetable. In the meantime, the DOT has issued a handful of orders regarding speed limits for oil trains, routing protocol and proper classification of crude oil cargoes.

“We’re working as hard as we can to get the rule out as soon as possible,” Cynthia Quarterman, the head of the DOT’s Pipelines and Hazardous Materials Safety Administration, testified at a Senate Commerce, Science and Transportation Committee hearing last week.

Pressed by lawmakers on whether the US would match Canada’s phase-out of legacy DOT-111 tank cars, she responded: “Canada has the advantage of being able to say in a public forum that they can remove those cars in three years. Because we have a rulemaking, we can not say anything comparable on the record until it goes through the rulemaking process.”

But, in perhaps a hint to what the rules may contain, she added that US officials are working closely with their Canadian counterparts and that “we applaud their move to remove the DOT-111s in three years time.”

Should the US require a similar fast-track phase-out schedule for DOT-111 tank cars, the oil industry is sure to be upset, as it has warned of potential shortages in tank cars and limited capacity to build new ones.

But speculation will remain speculation, until the White House finishes its review of the DOT proposal.

— Herman Wang in Washington

Martinez Gazette op ed: Wait a minute

Repost from The Martinez Gazette

Martinez Environmental Group: Wait a minute

By Guy Cooper | June 5, 2014

Several local refinery permits and associated Environmental Impact Reports (EIRs) are currently pending approval. For instance, Westpac in Pittsburg wants to receive, store and distribute explosive Bakken and toxic tar sands crude-by-rail at an old PG&E tank farm right next to homes and schools.

The Valero refinery in Benicia wants to bring to town daily 100 car unit trains of the same. Phillips 66 seeks to increase their volatiles storage and transportation in Rodeo and also enormously expand crude-by-rail traffic through our rail corridor to feed their San Luis Obispo facility. Finally, Shell wants to revamp the Martinez refinery to process lighter, sweeter crudes like Bakken. They will ship crude by rail from North Dakota to Bakersfield then by pipeline to Martinez, or by rail from North Dakota to a Washington State marine terminal that will load tankers bound for Martinez. Other plans are in the works.

So the debates ensue. I’d like to frame the discussions in a different context.

A common way to compare corporate apples to country oranges is by looking at corporate revenues as compared to national gross domestic product (GDP). According to the Fortune 500, the combined parent corporate revenues of the five major refiners in this area – Valero, Chevron, Shell, Phillips 66 and Tesoro – was $1.1 trillion in 2013. That ranked them 16th of 187 countries in the world in GDP according to the International Monetary Fund (IMF). If California was a country it would be 8th in the world, at over $2 trillion. You might imagine that the economic power of Contra Costa County and Martinez ranked somewhat lower.

So, Mr. Big Oil, would you say we have a level playing field?

  • At public hearings, you have Power Point presentations. We have pieces of paper.
  • You meet in corporate back rooms. We meet in neighborhood back yards.
  • You have professional political operatives. We operate with volunteer political naiveté.
  • You sponsor political junkets and infomercials. We do flyers and lawn signs.
  • You have a PR budget. We pass the hat for printing.
  • You have PACs. We have potlucks.

According to Citizens United and the Supreme Court, we are equal. I think not.

The EIR process, despite the original best of intentions, is skewed in your favor.

You get to frame the discussion with the help of consultants, lobbyists and lawyers. Fly in whomever you need. Your political relationships are built on bucks, your policies on billions.

Your vast assets steer the political discourse, whether through direct political contributions, lobbying to de-fund government oversight and regulation, or by endowing non-think-tanks and pseudo-public forums that aim to skew legitimate science towards your view.

Our interests are more than what you narrowly consider to be of public concern. We value social, ethical, moral, esthetic, environmental, family, property, public health and safety issues that go beyond your narrow economic focus.

We live here.

So who gets to call the shots?

The trains, or the towns the trains run through? The refiners and oil producers, or the communities in their midst?

Who should pay for oil industry impacts? The locals that bear the brunt, or the producers that reap the billions?

I’m sorry, but if we don’t like your proposals, as local residents/citizens, we have a right to reject them. We have to work hard to overcome your advantage, but … the Supreme Court has spoken, Mr. Citizens United. You get your vote, we get the rest.

(If you want to stay updated on these issues and learn how to get involved, please go to http://mrtenvgrp.com/category/meetings).