Category Archives: Bakken Crude

Bakken Crude, Bay Area Air Quality Management District, Bay Area Refineries, Martinez CA, Shell Oil, Tar sands crude, Valero Benicia Refinery

Tar sands in our back yard

Repost from The Martinez News Gazette
[Editor: An excellent fact-filled summary on tar sands crude by our colleagues in the Martinez Environmental Group.  Note that Valero Benicia Refinery has admitted (in its open community meeting on March 24, 2014) that it may include tar sands crude in its “mix.”  See “NRDC report: Valero’s Magic Box.”  Also: “KPIX reports: Valero admits Tar Sands Crude, Fracked Oil could come through Benicia.”  – RS]

Martinez Environmental Group: Tar sands in our back yard

By AIMEE DURFEE & TOM GRIFFITH | May 22, 2014

Because fossil fuels are a finite resource, petroleum companies are now resorting to more extreme forms of oil extraction, including tar sands, fracking, and Arctic exploration. The tar sands are deposits of heavy crude oil trapped in sand and clay that are extracted using enormous amounts of water, as well as open pit mining, heat and horizontal wells. The largest deposit of Canada’s tar sands is along the Athabasca River in Alberta (Source: http://albertacanada.com).

Why is everyone so worried about the tar sands? First, tar sands oil extraction and production emit three times more carbon dioxide than the extraction and production of conventional oil. Second, tar sands extraction requires total destruction of pristine areas within the Canadian Boreal forest, one of the few large, intact ecosystems on Earth (Source: Friends of the Earth). Finally, the extraction of tar sands will have devastating global impacts. In a 2012 editorial in the New York Times, Jim Hansen of NASA famously wrote that if the tar sands are fully excavated, it will be “game over for the climate,” because Canada’s tar sands contain twice as much carbon dioxide (CO2) as has been emitted over the entire span of human history (Source: NYT! 5/9/12).

What does this have to do with Martinez? Shell Refinery in Martinez is currently receiving and processing tar sands (Source: CC Times, 6/1/13). Contra Costa County’s air is already very polluted, and this type of refining will only make it worse. Shell’s choice to refine tar sands will worsen the health of Martinez residents; pollution emanating from tar sands refineries are directly linked to asthma, emphysema and birth defects. (Source: Sierra Club, Toxic Tar Sands: Profiles from the Front Lines).

Additionally, the U.S. Geological Survey found that tar sands bitumen contains “eleven times more sulfur and nickel, six times more nitrogen, and five times more lead than conventional oil.” (Source: Environmental Integrity Project, Tar Sands: Feeding U.S. Refinery Expansions with Dirty Fuel).

But wait, there’s more … Shell also has a global role in profiting from the destruction of the climate. Royal Dutch Shell owns a whopping 60 PERCENT of the Athabasca Oil Sands in Alberta, Canada (Source: www.shell.com). If you Google “Athabasca tar sands,” you will see a veritable “Mordor” on Earth.

If all this makes you feel completely overwhelmed, get connected locally and join the Martinez Environmental Group. Climate change issues are happening literally in our back yard and we CAN do something about it.

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

Bakken Crude, Bay Area Refineries, California Air Resources Board (CARB), California Environmental Quality Act (CEQA), Greenhouse gas emissions, Heavy crude, Light sweet crude, Shell Oil

Contra Costa Times editorial: Shell’s new plan may serve to blaze new trail

Repost from The Contra Costa Times
[This editorial also appeared on May 24, 2014 in the print edition of the Vallejo Times Herald.]

Contra Costa Times editorial: Shell’s new plan may serve to blaze new trail

05/22/2014
The Shell Refinery is seen in Martinez, Calif. on Monday, May 6, 2013. The Bay Area's five refineries have moved toward acquiring controversial Canadian tar sands crude through rail delivery. (Kristopher Skinner/Bay Area News Group)
The Shell Refinery is seen in Martinez, Calif. on Monday, May 6, 2013. The Bay Area’s five refineries have moved toward acquiring controversial Canadian tar sands crude through rail delivery. (Kristopher Skinner/Bay Area News Group)

Discussions about reducing California’s greenhouse gas emissions often become both heated and hyperbolic. But a plan being advanced by one of the East Bay leading refineries should be neither.

The management of Shell Oil’s Martinez refinery has decided that it can operate effectively at current levels without using heavy crude oil as a base in some of its operations. Heavy crude requires much more energy, water and heat to process than the lighter crude.

We were thrilled to learn that Shell has filed paperwork with the county regarding its intent to shut down its coker operation, one of its dirtiest processes. Shell plans to replace it with processes that handle lighter crude, but not the more volatile bakken crude.

That is, indeed, good news for Shell’s neighbors in Martinez, but it is even better news for the environment.

Shell General manager Paul Gabbard told our editorial board that the process change will cut the refinery’s greenhouse gas emissions by 700,000 metric tons a year, which he said is equivalent to taking 100,000 cars off the roads.

It is not insignificant, especially during a drought, that this process change also will cut Shell’s water use by an estimated 15 percent. That works out to a savings of about 1,000 gallons of water per minute.

There also will be about 300 temporary construction jobs for local workers as the conversion is made.

But the biggest news is that Shell officials think this change, which they hope to have completed by 2018, will allow the refinery to meet the state’s stringent standards for greenhouse gas reduction before the 2020 deadline.

In 2006 the Legislature passed AB32, California’s landmark effort to decrease greenhouse gas emissions. Most oil refiners in the state were not happy about the law.

After all, the legislation was designed to dramatically reduce the levels of six different emissions that are quite often associated with the manufacture of petroleum products.

Not only did it seek to reduce the levels of carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons and perfluorocarbons emitted, it sought to do so by a whopping 25 percent statewide by 2020.

Many companies moaned that its target emissions were impossible to meet. The bill implicitly acknowledged that the goals were ambitious because it instructed the California Air Resources Board to develop regulations and “market mechanisms” that could allow for industrial operations that couldn’t meet the standards to purchase pollution credits through an auction from operations that had excess credits.

But if Shell’s reckoning is correct, and we think it is, it won’t need to do that — and this action could blaze a dramatic new trail that others in the industry should consider following.

Bakken Crude, Derailment, DOT-111, Emergency Readiness & Response, Explosion, Rail industry, Tank car retrofit

BNSF Railway: Future of crude by rail depends on safety

Repost from The Kansas City Star
[Editor: Significant quote by BNSF Executive Chairman Matt Rose: “Without focus on the elements of safety, the social license to haul crude by rail will disappear, to say nothing of the regulatory agencies’ response.”  – RS]

BNSF: Future of crude by rail depends on safety

James MacPherson, The Associated Press | 2014-05-21

BISMARCK, N.D. — The future of crude oil shipments by train depends on proving to the public that it can be done safely, the head of BNSF Railway Co. said Wednesday.

“Without focus on the elements of safety, the social license to haul crude by rail will disappear, to say nothing of the regulatory agencies’ response,” BNSF Executive Chairman Matt Rose told several hundred people at the Williston Basin Petroleum Conference in Bismarck.

BNSF is based in Fort Worth, Texas, but is part of Warren Buffett’s Berkshire Hathaway Inc., based in Omaha, Nebraska. The railroad is the biggest player in the rich oil fields of Montana and North Dakota, hauling about 75 percent of the more than 1 million barrels that moves out of the region daily.

Rose told the conference that the railroad is committed to preventing accidents like its Dec. 30 crash outside Casselton that left an ominous cloud over the town and led some residents to evacuate. The disaster in the small town west of Fargo was one of at least eight major accidents during the last year, including an explosion of Bakken crude in Lac-Megantic, Quebec that killed 47 people. Other trains carrying Bakken crude have since derailed and caught fire in Alabama, New Brunswick and Virginia.

Rose last month joined U.S. Secretary of Transportation Anthony Foxx at the North Dakota crash site, where options for enhancing tank car standards were discussed.

The crash occurred when a train carrying soybeans derailed in front of a BNSF oil train, causing that train to also derail and set off fiery explosions. The crash spilled about 400,000 gallons of crude oil, which took nearly three months to clean up.

Rose said the railroad has learned from the disaster and has done such things as decreased train speeds in some areas and increased inspections. The railroad also announced in February that it would voluntarily purchase a fleet a of 5,000 strengthened tank cars to improve safety for hazardous materials shipments. The company said it hoped to accelerate the transition to a new generation of safer tank cars and give manufacturers a head start in designing them as federal officials consider changes to the current standards.

Not everyone in the oil sector is eager to transition to stronger tank cars. At the expo a day earlier, Kari Cutting, vice president of the North Dakota Petroleum Council, said it was “not proven that extra steel is going to prevent those breaches.”

Cutting also said the newer, stronger DOT-111 tank cars have 14 percent less capacity than older tank cars. Cutting said making those cars the standard will require hundreds more trains to make up the lost volume, actually increasing the risk of accidents.

Oil from North Dakota began being shipped by trains in 2008 when the state reached capacity for pipeline shipments. The state is now the nation’s No. 2 oil producer, behind Texas.

BNSF said it plans to invest $5 billion in its railroad this year, including $900 million to expand capacity where crude oil shipments are surging. Its 2014 spending plan is about $1 billion more than last year, a record, Rose said.

Much of the upgrades will be aimed at safety, he said.

“BNSF believes, at the end of the day, that every rail accident is preventable,” Rose said.

Read more here: http://www.kansascity.com/2014/05/21/5037936/bnsf-future-of-crude-by-rail-depends.html#storylink=cpy
Bakken Crude, Heavy crude, Martinez CA, Shell Oil

Martinez Shell Refinery to refine more light Bakken crude

Repost from Bloomberg

Shell Considers Retiring California Coker Amid Shale Boom

By Lynn Doan May 19, 2014

Royal Dutch Shell Plc (RDSA), Europe’s biggest oil company, is considering retiring one of two coking units at its only refinery in California as the company seeks to run lighter crude at the plant.

The company has applied to county regulators for a permit to shut the flexicoker at the 156,400-barrel-a-day Martinez refinery northeast of San Francisco, a move that would shrink the plant’s reliance on heavy oils and cut its greenhouse-gas emissions by 15 percent, Destin Singleton, a Shell spokeswoman, said May 16. The unit helps convert the denser crude into more valuable products such as diesel and gasoline.

Shell is considering the shutdown as hydraulic fracturing and horizontal drilling unleash record volumes of light oil from shale formations across the middle of the U.S. California’s refiners, lacking pipeline access to the growing crude supplies, are bringing in the most ever by rail as they work to counter shrinking production within the state and from Alaska.

“The reality is that we are looking at each individual refinery and making economic decisions as to what is the most optimal feedstock,” John Abbott, downstream director for The Hague-based Shell, said in an interview at Bloomberg’s headquarters in New York May 16. “This is one of the most competitive assets on the West Coast of the U.S. and in California.”

Industry refining margins on the U.S. West Coast, a rough indicator of profitability, averaged $7.62 a barrel in the first quarter, almost twice the $4.07-a-barrel coking margin on the Gulf Coast, Shell said in a statement April 30.

Train Deliveries

While the Martinez refinery doesn’t have the equipment to unload oil from rail cars, it receives crude by pipeline from a complex in Bakersfield, California, that takes train deliveries, Singleton, based in Houston, said by e-mail. The refinery would continue to receive oil by pipeline and vessel using existing infrastructure once the coker is shut, she said.

Heavy crude pumped from California’s San Joaquin Valley dropped 35 cents to $95.20 a barrel, data compiled by Bloomberg at 2:01 p.m. New York time show. Light crude from North Dakota’s Bakken formation gained 82 cents to $98.59 a barrel.

Crude Mix

“Overall, heavy crudes are a big part of our current mix,” Singleton said. “We’ll be processing the same crudes we refine today, but the mix will be lighter — meaning significant reductions in greenhouse gas emissions, less electricity use, and more efficient operations.”

A delayed coker, which was installed at the refinery in the 1990s, based on air regulatory filings, will remain in service, she said.

Refiners from Tesoro Corp. (TSO) to Valero Energy Corp. (VLO) are working to bring more shale oil to their plants on the U.S. West Coast by rail. Trains delivered 395,053 barrels of oil to California in March, a record volume for that month, the most recent data available from the state Energy Commission show.

Shell is seeking permits to build a rail complex at its Anacortes refinery in Washington state that would allow the plant to unload oil from as many as six trains a week, regulatory filings show. The company has also said that it’s carrying upgraded crude to the West Coast from its Scotford oil-sands upgrader in Canada.

Crude Imports

Martinez imported 903,000 barrels of medium-to-heavy crude in February from Canada, the most recent data available from the Energy Information Administration show. The complex already processes some lighter crudes, like Bakken oil, along with heavier feedstock from California’s Central Valley, Singleton said.

Contra Costa County regulators are expected to prepare a report on the environmental impacts of the coker retirement, and the public will have a chance to comment on the plan during that process, she said.

Chevron Corp. (CVX)’s Richmond refinery, west of Martinez, is also applying to local regulators for a project that would change its crude slate. The plan would replace a hydrogen plant and increase capacity at the fluid catalytic cracker’s hydrotreater and sulfur-recovery system to run higher-sulfur oils.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editors responsible for this story: Dan Stets at dstets@bloomberg.net David Marino, Richard Stubbe