Final decision on Tesoro’s Washington railport pushed to 2016
By Kristen Hays, June 26, 2015
HOUSTON – The latest delay in a detailed government review of Tesoro Corp’s proposed $210 million railport project in Washington state means a final decision will not happen until 2016, according to a state council’s published schedule.
The 360,000 barrels-per-day project would be the biggest in the United States, moving domestic and Canadian crude via rail to Washington’s Port of Vancouver, where it would be loaded onto vessels to supply West Coast refineries – mainly in California.
The company had hoped to start it up by late 2014, and then pushed it to this year as the project undergoes a lengthy state review.
Several other oil-by-rail projects, largely in California, are stalled amid opposition after multiple crude train crashes and derailments since mid-2013.
Tesoro said the company was disappointed in “yet another delay” and remains committed to the project.
Chief Executive Greg Goff told analysts last month that the delay to 2016 was likely as the project undergoes what he called a “painfully slow” review process.
The projected cost also has more than doubled to $210 million from its original $100 million as Tesoro upgraded the design, including seismic dock improvements.
Washington’s Energy Facility Site Evaluation Council (EFSEC)’s schedule, made public this week, says a draft environmental impact statement will be published in late November. The council had previously expected to release the draft report in late July.
State law then requires a month-long public comment period which can be lengthened.
EFSEC then will submit the final report to Gov. Jay Inslee, who has final say on whether it will be built. The new schedule, and the public comment session, pushes that submission to early 2016. Inslee will have up to two months to decide once he receives the report.
Most Washington refineries, including Tesoro’s 120,000 bpd plant in Anacortes, receive oil by rail. No major pipelines move oil west across the Rocky Mountains or the Cascades, so West Coast refineries turn to rail to tap North American crudes that cost less than imports.
(Reporting by Kristen Hays; Editing by Christian Plumb)
Railroads use new oil shipment rule to fight transparency
By Curtis Tate, McClatchy Washington Bureau, 6/25/15
A CSX oil train moves east through Selkirk Yard near Albany, N.Y., on May 26, 2015. The Albany area has become a hub for crude by rail shipments as East Coast refineries have replaced imported oil with mid-continent sources. CSX and other railroads continue their push to keep routing and volume information about the shipments from the public. CURTIS TATE — McClatchy
WASHINGTON — Railroads may have found a new weapon in their fight to keep information about oil train shipments from the public: a federal rule that was supposed to increase transparency.
The U.S. Department of Transportation insists that its May 1 final rule on oil trains, which mostly addresses an outdated tank car design, does not support the railroads’ position, nor was it intended to leave anyone in the dark.
But in recent court filings in Maryland, two major oil haulers have cited the department’s new rule to justify their argument that no one except emergency responders should know what routes the trains use or how many travel through each state during a given week.
Those details have been publicly available in most states for a year, though some sided with the railroads and refused to release them. The periodic reports have helped state and local officials with risk assessments, emergency planning and firefighter training.
The department’s rule was expected to expand the existing disclosure requirements. In its 395-page rule, the department acknowledged an overwhelming volume of public comments supporting more transparency. But ultimately, it offered the opposite.
The final rule ends the existing disclosure requirements next March. Railroads no longer would be required to provide information to the states, leaving emergency responders to request details about oil train shipments on their own, and the public would be shut out entirely.
The switch floored those who submitted comments in favor of increased transparency.
“The justification was not consistent with the comments given,” said Denise Rucker Krepp, a former senior counsel for the House Homeland Security Committee and chief counsel for the U.S. Maritime administration. “They’re supposed to be the same.”
Facing push-back from Capitol Hill, Transportation Secretary Anthony Foxx assured lawmakers in a May 28 letter that “we fully support the public disclosure of this information to the extent allowed by applicable state, local and tribal laws.”
Foxx added that the department was not attempting to undermine transparency.
“That was certainly not the intent of the rule,” he wrote eight Senate Democrats.
But Foxx’s assurances differ sharply from the assertions of Norfolk Southern and CSX in court documents filed last month in Maryland. The documents are related to a case last summer when the railroads sued the state to block the release of oil train reports to McClatchy.
The final rule provides “clear and unequivocal guidance” that information about oil train routes and volumes are security- and commercially-sensitive, attorneys for the railroads wrote on May 5 to Judge Lawrence Fletcher-Hill of the Circuit Court for Baltimore City.
That classification would trigger an exemption from the state’s Public Information Act.
A trial is scheduled for August, though Fletcher-Hill could decide before then whether to dismiss the case in favor of the railroads or the state.
Both companies declined to comment on the case.
Last May, the Transportation Department issued an emergency order requiring railroads to notify states of large shipments of Bakken crude oil after a series of fiery derailments involving the light crude from shale formations in North Dakota. The worst of those derailments killed 47 people in Quebec in July 2013.
Railroads have insisted that the oil train details are sensitive from a security and business perspective and should be exempt from state open records laws. They attempted to shield the data from public view last year by asking states to sign nondisclosure agreements.
Some states initially agreed, but most declined. McClatchy sought oil train reports from 30 states through open records laws. All but half a dozen states released at least part of what McClatchy requested.
Last fall, two rail industry trade groups lobbied the Transportation Department to end the reporting requirement. In a notice published in the Federal Register in October, the department rebuffed the request.
“DOT finds no basis to conclude that the public disclosure of the information is detrimental to transportation safety,” the Federal Railroad Administration wrote, adding that the trade associations “do not document any actual harm that has occurred by the public release of the information.”
But when the department unveiled its final rule in May, the requirements more closely aligned with what the railroads sought.
“Under this approach,” the regulation states, “the transportation of crude oil by rail can . . . avoid the negative security and business implications of widespread public disclosure of routing and volume data.”
The Maryland Attorney General’s Office has cited the department’s October Federal Register notice to support its position that the state can release the oil train information.
But the final rule is the last word, attorneys for the railroads say. They wrote Fletcher-Hill on May 29 that the state “relies on non-final comments published by the Federal Railroad Administration” and “fails to acknowledge the highly persuasive guidance articulated in the final rule.”
Unlike other arguments put forth by the railroads and their trade groups that have swayed few state or federal officials – including speculative claims of terrorism, competitive harm and even insider trading – the final rule may prove more persuasive to a judge.
The eight Senate Democrats wrote to Foxx on May 6, the same day another oil train derailed and caught fire in North Dakota. It was the fifth such incident in North America this year. They asked the department to reconsider the rule.
“The onus for obtaining detailed crude-by-rail information should not be on the local jurisdiction,” they wrote, and they called on the department “to clarify that broader crude-by-rail information will remain accessible to the public.”
Apparently backing away from the final rule’s expiration date for the emergency order, Foxx replied that it would remain “in full force and effect until further notice” and that the department would be looking for ways to codify the disclosure requirement.
But Krepp said that’s exactly what everyone was expecting in the rule.
“If they wanted that,” she said, “they would have put that in the rule-making.”
Krepp said the department made its intentions clear in the final rule.
“They have the final rule now,” she said. “They have to live with it.”
[Editor: Liability is a huge – and lingering – issue when it comes to oil train derailments and catastrophic firey explosions. There have been daily updates this past week on an announced settlement in the massive Lac-Mégantic disaster of July, 2013. We watch and wait for potentially precedent-setting decisions. See below. – RS]
(Reuters) — A Quebec judge reserved his decision on Wednesday on whether to grant a motion that would clear the way for a settlement between victims of the 2013 Lac-Megantic oil train disaster and dozens of companies and individuals linked to the crash that killed 47 people. Read More >
In this July 6, 2013 file photo, smoke rises from railway cars carrying crude oil after derailing in downtown Lac Megantic, Que. Paul Chiasson / THE CANADIAN PRESS
(Calgary Herald) — SHERBROOKE, Que. – Canadian Pacific Railway Ltd.’s lawyers asked a Quebec judge not to approve a proposed $430-million settlement fund for victims of the Lac-Megantic train derailment because they say its terms are unfair to the company. Read More >
(Globalnews.ca) – WATCH: A settlement to compensate victims of the Lac-Megantic train disaster may be in danger. Lawyers for Canadian Pacific are questioning the legitimacy of the entire process, just two days before a judge was set to approve the deal. As Mike Armstrong explains, the last minute hiccup could mean a delay of months or even years. Read More >
(Montreal Gazette) – A lawyer for the defunct railroad at the centre of the Lac-Mégantic train derailment said Canadian Pacific Railway Ltd. is acting deplorably and offensively by attempting to shut down proceedings to distribute more than $430 million to victims and creditors of the 2013 tragedy. Read More >
By Arwa Gunja and Jillian Weinberger, June 15, 2015
A gas flare is seen at an oil well site on July 26, 2013 outside Williston, North Dakota. (Andrew Burton/Getty)
Over the last decade, the United States has undergone an economic transformation in energy production. As President Obama told Congress in his 2014 State of the Union address, “Today America is closer to energy independence than we have been in decades.”
The United States has surpassed even Saudi Arabia in oil and gas production, in part because of fracking technology, which allows energy companies to reach oil and gas deposits they could never access previously.
One of those deposits lies in the Bakken oil fields, which stretches 170 square miles from North Dakota to Montana and into Canada. An estimated 7.4 billion barrels of undiscovered oil are sitting under the U.S. portion of the Bakken, and thanks to fracking, the industry now has the technology extract that oil.
Workers have flocked to the Bakken for jobs with six-figure salaries that don’t require advanced degrees. But a new investigation from Reveal, a public radio program from the Center for Investigative Reporting, finds that those high-paying jobs come with a high price.
In the first comprehensive analysis of its kind, Reveal found that, on average, a worker dies about every six weeks from an accident in the Bakken, with at least 74 deaths in the oil fields since 2006.
Jennifer Gollan, a reporter with Reveal, led the investigation. She says that the top energy firms may be championing speed over safety—something that was seen in September 2011 after a well owned by Oasis Petroleum exploded in North Dakota.
“The supervisor on this well was congratulated for working quickly and setting a new drilling record” months before the explosion, says Gollan. “She went on to call this record-holding well a ‘pace-setter.'”
Oasis offered workers daily bonuses of $150 for drilling quickly—those who drill slower and safer are only offered $40 a day.
“Safety is tantamount at Oasis,” spokesman Brian Kennedy told Gollan. “Bonuses should not have been paid, and we regret that they were.”
The day before the explosion in 2011, Gollan says that a crew of four men were brought on site to get the well to produce more oil.
According to documents from the Occupational Safety and Health Administration (OSHA), a supervisor had pumped heavy salt water into the well to prevent volatile gases from escaping before the crew set to work the next day. But the well wound up erupting into a fireball.
View of three oil wells and flaring of natural gas on The Fort Berthold Indian Reservation near New Town, ND on August 13, 2014. (Linda Davidson/The Washington Post/Getty)
Jebadiah “Jesse” Stanfill bared witness to the events of the day.
“He was working on an oil rig less than a mile away,” says Gollan. “He was near the top of the rig when he heard this boom. He spun around, grabbed a fire extinguisher and first aid kit, and jumped in this truck with two co-workers.”
But Stanfill and his friends were too late—two men had died and two others were injured.
“As Jesse was helping to pick up some of these men to load them into the bed of this pick up truck to bring them to the ambulance, some of the men’s skin came off in his hands,” says Gollan. “That is a feeling that, to this day, he just can’t shake.”
Gollan says that Stanfill has gear to protect himself from that horrific memory—he is usually wearing gloves, even when he’s playing with his children or cooking in the kitchen.
“How can a simple thing like looking at your hands or washing your hands send you completely enveloped back to that day,” Stanfill told Gollan. “The scenery changes. It’s as if I’m there. It rules my life.”
Brendan Wegner was one of the men who died in the well explosion.
“He was just 21. It was his first day on a rig,” says Gollan. “He was scrambling down the derrick ladder when the well exploded. It consumed him in this fiery tornado of oil and petroleum vapors. Rescuers later found his body pinned under this heap of twisted metal. His charred hands were recovered later still gripping the derrick ladder.”
Another man named Ray Hardy died the next day from his injuries. Michael Twinn had his lower legs amputated after the explosion. He committed suicide two years later.
“There was just one lone survivor who was burned over half of his body,” Gollan says of a man named Doug Hysjulien.
It appears that the victims of this explosion are the casualties of a flawed system.
“OSHA regulators will tell you that they often have to rely on a part of the law called the general duty clause,” says Gollan. “Basically, it makes it very difficult for them to hold top energy producers accountable because they typically don’t have direct employees on these well sites. As a result, in many of these cases, the top energy producers are not fined. It’s the subcontractor—typically the company that employs these workers—that get fined.”
Four of America’s largest energy-producing states—Texas, Louisiana, New Mexico and Wyoming—have adopted statutes that prevent or limit oil companies from shifting liability to smaller contractors.
Wyoming set up a task force to address worker safety back in 2008, a move that started the Wyoming Oil and Gas Industry Safety Alliance. Between 2008 and 2012, the state saw a 45 percent decrease in the number of worker deaths in the oil and gas industry.
Click on the audio player above to hear Jack Bedessem, the past president and advisor to the board of the Alliance, explain how Wyoming is working to improve worker safety, especially in the oil and gas industry.
