Category Archives: Bakken Crude

Oil industry desperate: claims oil spills are good for wildlife and the economy

Repost from Hazmat Magazine

Testimony Implies Oil Spills Are Good For Wildlife and the Economy

By J Nicholson, August 11, 2016

As reported in thinkprogress.org, the Washington State Energy Facility Site Evaluation Council (EFSEC) has been holding hearings on the matter of a proposed oil-by-rail terminal that could be built in Vancouver, Washington.  If approved, it would be the largest oil-by-rail facility in the country, handling some 360,000 barrels of crude oil, shipped by train, every single day.  It would also greatly increase the number of oil trains that pass through Washington, adding a total of 155 trains, per week, to the state’s railroads.

Environmentalist activists worry that an increase in oil trains could lead to an rise in oil train derailments, like the kind seen in early June when a Union Pacific train carrying Bakken crude derailed outside the Oregon town of Mosier, spilling 42,000 gallons of oil near the Columbia River.

But according to witnesses that testified before the EFSEC on behalf of Vancouver Energy – the joint venture between Tesoro Corp. and Savage Cos. and the entity behind the Tesoro-Savage terminal proposal – oil spills might not actually be that bad for the environment.

“The Draft Environmental Impact Statement identifies many economic impacts arising from an accident associated with Project operations, but fails to recognize economic activity that would be generated by spill response,” Todd Schatzki, vice president of Analysis Group — a consulting group that released an economic report on the terminal commissioned by Tesoro Savage — wrote in pre-filed testimony.  “When a spill occurs, new economic activity occurs to clean-up contaminated areas, remediate affected properties, and supply equipment for cleanup activities. Anecdotal evidence from recent spills suggests that such activity can be potentially large.”

Schatzki’s pre-filed testimony also includes references to both the Santa Barbara and BP oil spills’ role as job creating events.  He notes that the Santa Barbara oil spill created some 700 temporary jobs to help with cleanup, while the BP spill created short term jobs for 25,000 workers.  Schatzki does not mention that BP has paid individuals and businesses more than $10 billion to make up for economic losses caused by the spill.  Nor does he mention that California’s Economic Forecast Director predicted that the 2015 Santa Barbara oil spill would cost the county 155 jobs and $74 million in economic activity.

For the Columbia River region, the impacts of an oil spill could be equally economically devastating — a report from the Washington Attorney General’s office found that an oil spill could cost more than $170 million in environmental damages.

Keystone Pipeline (Credit: cfact.org)

Schatzki also argued that an oil spill would not necessarily have a large impact on commercial and recreational fisheries.  The Columbia River, which cuts between Oregon and Washington and borders much of the oil-train route, is one of the most important fisheries for both states.  In 2015, the total economic value of Columbia River salmon was $15.5 million, according to the Oregon Department of Fish and Wildlife.

Those fisheries, however, would not necessarily be impacted by an oil spill, Schatzki argued, because fishermen would simply avoid the areas where the spill had taken place, moving their operations elsewhere.  During cross examination, however, Schatizki said that he did not look at other fishermen’s responses to oil spills when crafting this analysis, nor did he specifically look at the length of fishing seasons or the geographic extent of various fisheries within the Columbia River.

In testimony given on July 7th, another Tesoro-Savage-associated witness, Gregory Challenger, argued that oil spills could actually have benefits for fish and wildlife.  Challenger, who worked with Vancouver Energy to analyze potential impacts and responses in the event of a worst-case discharge at the facility and along the rail line, told the committee that when oil spills cause the closure of certain fisheries or hunting seasons, it’s the animals that benefit.

“An oil spill is not a good thing.  A fishery closure is a good thing.  If you don’t kill half a million fish and they all swim upstream and spawn, that’s more fish than were estimated affected as adults,” Challenger said during his testimony.  “The responsible party is not going to get credit for that, by the way.”

 To prove his point, Challenger cited National Marine Fisheries Service data that showed that 2011, the year after the BP oil spill, had been a record year for seafood catch in the Gulf of Mexico.  And while that’s true, Shiva Polefka, policy analyst for the Center for American Progress’s Ocean Policy program, cautioned against trying to make sweeping statements for how all ecosystems would respond to an oil spill.  Following the Exxon Valdez spill in 1989, researchers discovered that crude oil had soaked into the rocky beaches near the spill site, emitting toxic compounds for years that had long-term adverse impacts on salmon and herring populations.

“Does cutting fishing effort benefit fish?  Absolutely,” Polefka said.  “Enough to mitigate the horrible effects of large oil spills in every case?  Absolutely not.”

During his testimony, Challenger also brought up the Athos 1 oil spill, which sent 264,000 gallons of crude oil into the Delaware River in 2004.  The spill, Challenger said, took place during duck hunting season, and forced an early closure for recreational hunting in the area.

“There were an estimate of 3,000 birds affected by the oil, and 13,000 birds not shot by hunters not shot by hunters, because of the closed season,” he said.  “We don’t get any credit for that, but it’s hard to deny that it’s good for birds to not be shot.”

According to U.S. National Oceanic Atmospheric Administration (NOAA), seabirds are especially vulnerable to oil spills, because of the way that oil affects their usually-waterproof feathers — when those feathers become matted with oil, a seabird loses its ability to regulate its temperature.  Often, it will try to preen itself to remove the oil, which only forces the oil into its internal organs, causing problems like diarrhea, kidney and liver damage, and anemia.  Oil can also enter into a seabird’s lungs, leading to respiratory problems.

Opponents of the terminal were quick to dismiss Schatzki and Challenger’s testimony as “hollow,” especially in the face of the recent derailment and oil spill in Mosier.

oil spill07“We see Tesoro moving towards these more desperate arguments to try to downplay the risk of the project,” Dan Serres, conservation director with Columbia Riverkeeper, told ThinkProgress. “It’s hard to imagine that EFSEC will buy the argument that oil spills pose anything other than a grave risk to the Columbia River estuary.”

Following the EFSEC hearings, the committee will submit a recommendation to Washington Governor Jay Inslee to approve, conditionally approve, or deny the project.

NPR: In The Pacific Northwest, Oil Train Derailment Highlights Potential Dangers

Heard on All Things Considered
By Conrad Wilson, August 12, 2016 4:31 PM ET

The number of trains carrying oil along the Columbia River between Oregon and Washington could dramatically increase.

There’s a plan to ship more oil from the Bakken region of North Dakota to a proposed oil terminal in southwest Washington state.

An oil train derailment earlier this year has shown the potential danger faced by the region.

TRANSCRIPT________________________________________________

AUDIE CORNISH, HOST:

In the Northwest, the number of trains carrying oil along the Columbia River could dramatically increase, and that’s sharpened a debate over oil train safety in Washington state and Oregon. There’s a plan to ship more oil from the Bakken region to a proposed oil terminal in Washington. As Conrad Wilson of Oregon Public Broadcasting reports, a recent derailment has shown the potential danger the area faces.

CONRAD WILSON, BYLINE: On a Friday in early June, more than 40,000 gallons of Bakken crude spilled in a fiery oil train derailment that burned for 14 hours.

EMILY REED: It is an incredibly scary thing to have something like this happen so – and within our city limits, so close to our school.

WILSON: Emily Reed is the city council president in Mosier, Ore., the town where the derailment took place. About 500 people live in Mosier, and 100 of them were forced to evacuate when the oil train derailed. Reed points out the town’s deep in the Columbia River Gorge, a canyon with steep cliffs, where winds can reach 40 miles per hour during the summer.

REED: If the wind had been as it is today or more, we would have had a fire going up more than four of those cars, all the way through town and wiping out our town.

WILSON: Union Pacific was to blame for the derailment that caused the oil spill, according to a preliminary report by the Federal Railroad Administration. It says Union Pacific didn’t maintain its tracks properly. However, an inspector certified by that same federal agency checked the tracks and gave them the OK a little more than a month before the derailment.

JERRY OLIVER: It was unfortunate for the community.

WILSON: Jerry Oliver is a port commissioner in Vancouver, Wash., and a vocal supporter of what would be the largest oil-by-rail terminal in the country, known as the Vancouver Energy Project.

OLIVER: It’s also unfortunate because it gives a tremendous black eye to anything related to fossil fuels.

WILSON: If built, the terminal would more than double the number of mile-long oil trains traveling along the Columbia River, to about 46 trains per week. Serena Larkin is with the Sightline Institute, a Seattle-based think tank that opposes the oil terminal. She says until Mosier, oil train derailments were the kind of thing that happened somewhere else.

SERENA LARKIN: Mosier proved that we’re not any different. We are just as vulnerable. We are facing the exact same risks from oil trains that everyone else in North America is facing right now.

WILSON: Despite low oil prices, proponents of the project say the terminal is needed to reduce foreign imports and move domestic oil. For now, it’s relying on oil trains because there aren’t enough pipelines to move oil from North Dakota to the West Coast. Larkin says Mosier’s a turning point in the debate surrounding the Vancouver oil terminal and one that will weigh heavily on whether the project gets permitted.

LARKIN: It showed what the Vancouver oil terminal is really asking Northwest communities to shoulder in risk.

DAN RILEY: I strongly believe that all accidents are preventable.

WILSON: Dan Riley is vice president of government affairs for Tesoro, an oil company behind the project. Since the derailment in Mosier, he says there has been more scrutiny.

RILEY: I think that the criticism is not of the project, but of the rail system.

WILSON: Reilly says Tesoro has also pledged to only allow tank cars with thicker shells and other safety features designed to withstand a derailment into the Vancouver facility. But that’s done little to ease the safety concerns of firefighters and environmental groups. Ultimately, Washington Gov. Jay Inslee has the final say on whether the project gets approved. That decision could come later this year. Inslee’s acknowledged the risk oil trains pose. He says the Mosier derailment is among the things he’ll consider when determining whether or not he’ll permit the oil terminal. For NPR News, I’m Conrad Wilson in Vancouver, Wash.

Dakota Access pipeline to upend oil delivery in U.S. – Losers to include struggling oil-by-rail industry

Repost from Reuters

Big Dakota pipeline to upend oil delivery in U.S.

By Catherine Ngai and Liz Hampton | NEW YORK/HOUSTON, Aug 12, 2016 12:46pm EDT
Dead sunflowers stand in a field near dormant oil drilling rigs which have been stacked in Dickinson, North Dakota January 21, 2016. REUTERS/Andrew Cullen
Dead sunflowers stand in a field near dormant oil drilling rigs which have been stacked in Dickinson, North Dakota January 21, 2016. REUTERS/Andrew Cullen

It may seem odd that the opening of one pipeline crossing through four U.S. Midwest states could upend the movement of oil throughout the country, but the Dakota Access line may do just that.

At the moment, crude oil moving out of North Dakota’s prolific Bakken shale to “refinery row” in the U.S. Gulf must travel a circuitous route through the Rocky Mountains or the Midwest and into Oklahoma, before heading south to the Gulf of Mexico.

The 450,000 barrel-per-day Dakota Access line, when it opens in the fourth quarter, will change that by providing U.S. Gulf refiners another option for crude supply.

Gulf Coast refiners and North Dakota oil producers will reap the benefits. Losers will include the struggling oil-by-rail industry which now brings crude to the coasts.

The pipeline also will create headaches for East and West Coast refiners, which serve the most heavily populated parts of the United States and consume a combined 4.1 million barrels of crude daily. They will have to rely more on foreign imports.

The pipeline, currently under construction, will connect western North Dakota to the Energy Transfer Crude Oil Pipeline Project (ETCOP) in Patoka, Illinois. From there, it will connect to the Nederland and Port Arthur, Texas, area, where refiners including Valero Energy, Total and Motiva Enterprises operate some of the largest U.S. refining facilities.

“That’s a better and cheaper path than going out West and down through the Rockies,” said Bernadette Johnson, managing partner at Ponderosa Advisors LLC, an energy advisory based in Denver.

CHEAPER THAN RAIL

Moving crude by pipeline is generally cheaper than using railcars. The flagging U.S. crude-by-rail industry already is moving only half as much oil as it did two years ago: volumes peaked at 944,000 bpd in October 2014, but were around just 400,000 bpd in May, according to the U.S. Energy Department.

Rail transport has become less economical for East and West Coast refiners when compared with importing Brent crude, the foreign benchmark, because declining supply out of North Dakota made that grade of oil less affordable.

“If you look at the Brent to Bakken arb, it’s tight,” said Afolabi Ogunnaike, a senior refining analyst at Wood Mackenzie in Houston. “If you look at the spot rate, it’s uneconomical to move crude by rail right now.”

Ponderosa Advisors estimated that the start-up of the pipeline could reroute an additional 150,000 to 200,000 bpd currently carried by rail to the U.S. East Coast and Gulf Coast.

Crude imports into the East Coast are now on the rise, averaging 788,000 bpd this year, with nearly 960,000 bpd in July, the highest level in three years, according to Thomson Reuters data.

On the West Coast, refiners like Shell, Tesoro and BP may have to commit to some railed volumes for longer because of shipping constraints, although it will largely depend on rail economics. They also face declining output from California and Alaska.

Tesoro’s top executive Gregory Goff told analysts and investors last week he expects rail costs to drop as much as 40 percent from the current $9-to-$10 barrel cost to compete with pipelines, in order to move Bakken to its Anacortes, Washington, refinery.

CHANGING TIDES

Rail companies have been trying to adapt. CSX Corp, which runs a network of lines in the eastern part of the country, said it was evaluating potential impacts of the pipeline. BNSF Railway declined to discuss future freight movements, but said that at its peak, it transported as many as 12 trains daily filled with crude, primarily from the Bakken. Today, it is moving less than half of that.

In a recent earnings call, midstream player Crestwood Equity Partners said it was working to capitalize on the pipeline and not be dependent on loading crude barrels onto trains. That includes building an interconnection to its 160,000 barrel-per-day COLT crude rail facility in North Dakota.

As refiners bring in more barrels from overseas, Brent’s premium over U.S. crude will eventually widen. On Thursday, December Brent futures settled at a 97-cent premium to U.S. crude, one of its widest premiums this year.

Separately, Bakken crude, a light barrel, could rise further due to the additional competition, especially as production is still falling. Bakken differentials hit a six-month low earlier this week of $2.65 a barrel below WTI, according to Reuters data, but rose to a $1.80 a barrel discount by Thursday.

(Reporting by Catherine Ngai in New York and Liz Hampton in Houston; Editing by David Gregorio)

Petition: Ban Oil Trains For Good

Repost from Huffington Post

Ban Oil Trains For Good

By Marc Yaggi, Executive Director, Waterkeeper Alliance, 08/11/2016 03:30 pm ET
2016-08-08-1470664391-409844-13308293_10154299311634165_7880276907808028024_o.jpg
Oil train derailment in Mosier, Oregon in June 2016. Photo credit: Columbia Riverkeeper

Just a little over two months ago, a disastrous oil train derailment occurred in Mosier, Oregon, spilling 47,000 gallons of Bakken crude oil from North Dakota. The fallout from that accident has seen the entire region debating whether transporting this hazardous crude oil by rail through local communities and along our nation’s rivers is worth the risk. It’s time for the debate to close, and for all sides to realize the hard truth: oil trains like the one that derailed in Mosier pose an immediate threat to communities around the country, and it is time we demand immediate action.

Waterkeeper Alliance’s report, Deadly Crossing: Neglected Bridges & Exploding Oil Trains, written in partnership with STAND and Hudson Riverkeeper, showed that many of the bridges these oil trains pass over show signs of neglect and disrepair. The report also highlighted that the public cannot access any meaningful information regarding the safety of rail bridges in their community. In response to these concerns, the Federal Railroad Administration (FRA) now has a way for local officials to request public bridge inspections. This is a small victory, but the threat of these oil trains still lingers in communities across the country, and the only true solution is to ban these trains altogether.

No community wants a potentially lethal oil train speeding past their schools, behind their homes, or near their precious water sources. We need to stand together to demand a complete ban on oil trains. Please join this petition to call on the Department of Transportation to recognize that oil trains are inherently unsafe for our communities and waterways, and to use all available authority to stop oil train traffic throughout the country.