Category Archives: Bakken Shale

Bakken Shale, Crude By Rail, DEIR, Derailment, Risk Assessment, Valero Benicia Refinery

Sacramento Bee: California state and regional agencies challenge Benicia crude oil train plan

Repost from The Sacramento Bee
[Editor: to read the State’s letter and others mentioned in this article, check out Project Review.  – RS]

California officials challenge Benicia crude oil train plan

By Tony Bizjak, September 24, 2014

Brown administration officials say Benicia has underestimated the risk posed by oil trains planned to run through Sacramento and other parts of Northern California to the city’s Valero refinery, and is calling on the city to redo its safety analysis before allowing oil shipments to increase.

A letter sent to the city last week by the state’s Office of Spill Prevention and Response and the California Public Utilities Commission expresses concerns similar to those detailed in recent letters to Benicia from the Sacramento Area Council of Governments and the cities of Sacramento and Davis.

Sacramento regional leaders have accused Benicia of not adequately exploring the explosion and fire risks of a Valero Refining Co. plan to run two 50-car trains daily through downtown Roseville, Sacramento, West Sacramento, Davis and other cities to the Benicia refinery.

Julie Yamamoto, chief of the state spill prevention agency’s scientific branch and a member of the governor’s rail safety team, said state officials felt compelled to push for Benicia to do deeper study prior to project approval.

“We felt the risk analysis was sufficiently flawed and underestimates the risks,” Yamamoto said.

In its draft environmental impact report, issued earlier this summer, Benicia only analyzed oil spill possibilities on the rail line between Roseville and Benicia, even though the trains will travel from other states or even Canada. “That is a pretty big shortfall in not considering the rest of the track to the California border, and even beyond that,” Yamamoto said. State officials also have questions about how Benicia came up with the assertion that a derailed train might spill oil only once every 111 years, and therefore the risk was insignificant.

“The derailment rate looks to us to be low compared to national data,” Yamamoto said.

Benicia city officials declined to respond this week to the concerns raised by the state and local governments, but previously indicated that they limited their spill analysis to the Roseville-Benicia track section because they do not know yet which rail lines the Union Pacific Railroad may use east or north of Roseville to bring the oil into California.

State officials countered that there are only a handful of rail lines that could be used to bring the oil into the state, and all should be included in Benicia’s project risk analysis. The state noted that those rail lines pass through “high-hazard areas” where derailments are more common. In Northern California, those hazard sections are at Dunsmuir, the Feather River Canyon and near Colfax.

By issuing its letter, the state secures legal standing to sue Benicia if that city approves the project without redoing its risk studies. State officials this week declined to address the question of whether they would consider a lawsuit.

The letter from the state is one of hundreds Benicia officials said they received in the past few months in response to their initial environmental study. Benicia interim Community Development Director Dan Marks said the city and its consultants would review the comments and prepare responses to all of them, then bring those responses to the city Planning Commission for discussion at an as-yet undetermined date.

Under the Valero proposal, trains would carry about 1.4 million gallons of crude oil daily to the Benicia refinery from U.S. and possibly Canadian oil fields, where it would be turned into gasoline and diesel fuel. Valero officials have said they hope to win approval from the city of Benicia to build a crude oil transfer station at the refinery by early next year, allowing them to replace more costly marine oil shipments with cheaper oil.

Crude oil rail shipments have come under national scrutiny in the last year. Several spectacular explosions of crude oil trains, including one that killed 47 residents of a Canadian town last year, have prompted a push by federal officials and cities along rail lines for safety improvements.

SACOG and the cities of Sacramento and Davis have called on Benicia to require UP to give advance notice to local emergency responders, and to prohibit the railroad company from parking or storing loaded oil tank trains in urban areas. Local officials want the railroad to use train cars with electronically controlled brakes and rollover protection. Sacramento also has asked Benicia to limit Valero to shipping oil that has been stripped of highly volatile elements, including natural gas liquid.

Others in the Sacramento region, however, point out that rail safety is a federal issue, not one that cannot legally be dictated locally. In a joint letter, Stanley Cleveland and James Gallagher of the Sutter County Board of Supervisors said SACOG is overreaching, and a better approach would be to work with federal railroad regulators, as well as with Valero and UP, on safety issues.

The Union Pacific Railroad also has challenged the SACOG and Sacramento city perspectives, arguing that federal law pre-empts states and cities from imposing requirements on the railroads. “A state-by-state, or town-by-town approach in which different rules apply to the beginning, middle and end of a single rail journey, would not be effective,” UP officials said in a letter this month to SACOG.

State Sen. Ted Gaines, who represents much of Placer County and other rail areas, said the Valero project has his “full support.” Benicia’s analysis, he wrote, “affirms that this project is beneficial environmentally and economically and can be done safety given the prevention, preparedness and response measures in place by both Valero and Union Pacific Railroad.”

Among other commenters:

•  350 Sacramento, a local climate change group, warned that oil trains would cause an increase in carbon emissions and slow efforts to convert to renewable energies.

•  The Capitol Corridor passenger train authority, which would share tracks with the oil trains, voiced concern about the safety of passengers, crews and communities, saying the Benicia analysis doesn’t look at the impact crude oil trains would have on Capitol Corridor or Amtrak passenger trains.

• The Sacramento Metropolitan Air Quality Management District said Benicia could ask Valero to fund local mitigation programs to reduce polluting impacts of trains in the region.

•  UC Davis noted that the rail line passes through campus near the Mondavi Center and the UC Davis Conference Center, and called for additional training and equipment for Davis to deal with the possibility of a derailment and fire.

Read more here: http://www.mercedsunstar.com/2014/09/24/3866089_california-officials-challenge.html?rh=1#storylink=cpy

 

Bakken Shale, Coal, Crude By Rail, Farming

Crude by rail causing delays for rail shipments of other goods

Repost from The Wall Street Journal
[Editor: We missed this significant article from last March.  Also on the delays of farming shipments, see the Reuters report of April 15, 2014: Farmers: Oil trains may delay fertilizer shipments.  – R]

Surge in Rail Shipments of Oil Sidetracks Other Industries

Pileups at BNSF Railway Is Causing Delays for Shippers of Goods Ranging From Coal to Sugar
By Betsy Morris, Jacob Bunge and John W. Miller, March 13, 2014
A train carrying crude oil heads west through the small town of Shelby, Mont., in November. A major snarl in railroad traffic is ricocheting through the supply chains of businesses across the U.S. AP

A major snarl in railroad traffic is ricocheting through the supply chains of businesses across the U.S., causing delays and losses for shippers of goods ranging from coal to sugar.

Many of the problems stem from pileups at BNSF Railway Co. in a critical northern stretch of the country where it is shipping crude oil from North Dakota’s booming Bakken Shale region. The railroad, one of the biggest in North America, was already taxed by the heavy demand for oil transport. But its difficulties multiplied when it ran out of locomotives and crew, as a bitter winter forced it to use smaller trains.

That has caused a ripple effect across the country as shipments have been delayed. Deliveries of empty grain cars to farmers and grain elevators in the Midwest and Great Plains are running about two to three weeks late, the railroad says. The chief of a major sugar producer said he likes to load 50 railcars a day this time of year, but BNSF sometimes brings more than 50 and sometimes 30.

An executive close to big utility companies says coal-fired power plant inventories are running much lower than the usual 30 days. “The railroads tell us they aren’t serving power plants until their inventories are in single-digit days,” he said.

BNSF isn’t the only railroad with capacity problems, but its woes have been aggravated by a big grain harvest and its surging crude business.

The railroad knew it was in trouble when winter hit. “We found ourselves behind the curve,” said Bob Lease, vice president, service design and performance, for BNSF. “Now, we are finding we can’t fill all of the demand” as quickly as usual.

The backlogs could wind up costing shippers hundreds of millions of dollars, says Steve Sharp, president of Consumers United for Rail Equity, a group representing agriculture companies, manufacturers and utilities. His group has been pushing for tougher railroad regulation.

Andrew Walmsley, director of congressional relations for the American Farm Bureau Federation, a trade group for farmers, worries that continued capacity problems could hurt U.S. competitiveness in the world arena. “Our reliability as a trading partner comes into question anytime we can’t provide the most cost-competitive price in a predictable and timely manner,” he said.

BNSF is scrambling. The railroad is leasing and buying locomotives by the hundreds and hiring new crews. In mid-February it began building new track on top of frozen snow-covered ground along its main oil-patch route. It normally wouldn’t have attempted such a project until spring.

Mr. Lease says traffic should become more “normalized” by April 1, but he concedes that the railroad’s challenges will extend through 2014. “It takes a while to unravel,” he said.

BNSF, a unit of Warren Buffett’s  Berkshire Hathaway Inc.,  BRKB +1.19%     invented the business of carrying crude oil by rail when it launched its first long oil train, essentially a rolling pipeline, in 2009. The business has sharply exceeded its expectations. Shipments of crude by rail from North Dakota rocketed to a peak of 800,000 barrels a day last October from fewer than 100,000 barrels a day in 2010.

The surge has contributed to a tangle with potentially widespread impact. Larry Stranghoener, chief financial officer of fertilizer maker  Mosaic Co.  MOS +0.73%     , says that transport problems, including the crunch in railroad capacity, could spell “a slower season.”

“The primary preoccupation of our sales force, our supply chain and our customers frankly is getting product to them in time for the spring season,” he told the Minneapolis-area company’s investors Wednesday. Any delays transporting Mosaic’s fertilizer to dealers could cause them to defer additional orders, he said.

Some shippers, eager to move their products, have opted to use trucks. Trucking rates compare with rail costs within a 500-mile radius, but beyond that companies can wind up paying four to five times as much on a per-ton basis, says one shipping official.

At Black Gold Farms, based in Grand Forks, N.D., Chief Executive Gregg Halverson says his company has had to pay more to hire trucks to transport its potatoes, which it sells to chip makers.

“There’s more demand for truck transportation, and that hits us between the eyes,” Mr. Halverson said. “It’s not only the actual availability of the trucks, but trucking firms having trouble getting drivers, because of demand from the oil patch.” He declined to estimate how much more he is paying for trucks.

American Crystal Sugar Co., which says it supplies about 15% of the nation’s sugar, had to slow production at three of its five plants for 11 days in mid-February because it was running out of storage space while waiting for trains to ship its sugar to food companies. That has disrupted the Moorhead, Minn.-based cooperative’s just-in-time delivery system, said David Berg, its chief executive. “The railroad just threw that into complete chaos,” he said.

He said delays in outbound shipments of sugar have interfered with the production schedules of American Crystal’s customers, many of them major food manufacturers.

While he said he wasn’t aware of any food companies that have had to halt production, “They’ve been running on fumes for weeks,” he said. “We’ve been humping trucks all over the U.S. to keep people in supply.” American Crystal supplies  General Mills Inc.,  GIS +1.27%      Kraft Foods Group Inc.,  KRFT +1.30%     Nestlé SA, Mars Inc. and  Kellogg Co.  K +1.09%     , among others.

Mr. Berg and Perry Cerminara, director of global sweetener and energy-risk management at  Hershey Co.  HSY +0.07%     , called the problems caused by BNSF “serious” in a March 4 letter to regulators and stressed the “urgent” need to fix them. Mr. Cerminara wrote on behalf of the Sweetener Users Association, representing food manufacturers.

A spokesman for BNSF said it is working with customers individually to address their most critical issues and plans record spending on expansion this year.

Utilities are hoping railroads can improve their capacity before the busy summer season. “We try to build up inventories to around 40 days, so we’re counting on spring,” said one official at a coal-fired power plant. But, he added, “We’re not counting on a magic bullet.”

—Tony C. Dreibus, Annie Gasparro, Chester Dawson, David George-Cosh and Laura Stevens contributed to this article.
Bakken Shale, Crude By Rail, Emergency Readiness & Response, Evacuation, Explosion, Fire, Smoke

King Co., Washington worriedly preps for oil train fire

Repost from Crosscut – News of the Great Nearby, Seattle, WA
[Editor: – Emergency training is going on all across North America.  Two examples: see Missouri firefighters train to handle fires, and Norfolk Southern Brings 40 Emergency Responders from Nine States to World-class Training Center for Crude-by-Rail Safety Class, not including California.  Where are the stories about training of Northern California emergency responders?  – RS]

King County worriedly preps for oil train fire

Executive Dow Constantine says a training exercise helps but the region needs a reduction or elimination of the dangerous trains.
August 7, 2014
Tank cars hours after they derailed under the Magnolia Bridge in Interbay.
Tank cars hours after they derailed under the Magnolia Bridge in Interbay. Bill Lucia

Five rail cars carrying petroleum crude oil derail and catch fire near Boeing Field, about five miles south of downtown Seattle. That was the scenario during a tabletop exercise King County held Tuesday.

The planning exercise took place less than two weeks after three tank cars carrying highly flammable crude oil from North Dakota derailed in Seattle’s Interbay neighborhood. That incident was relatively benign. None of the cars leaked or caught fire. The mock scenario discussed on Tuesday was designed to be far more precarious.

“This is an emerging public safety threat,” said King County Executive Dow Constantine at a press conference on Wednesday. “And we need to have our emergency preparedness folks really up to speed on it and well-coordinated. And that’s what yesterday’s exercise was all about.”

The exercise highlighted some of the complications responders might face when dealing with burning tank cars of crude oil, such as monitoring toxic smoke, transporting evacuated people and delivering information to the public.

Between eight and 13 trains operated by BNSF Railway Co. pass through King County each week carrying crude oil, according to information the railroad released in June to the Washington Military Department.

A local fire chief involved in the exercise acknowledged on Wednesday that responders would most likely have to let some of the fuel burn off if one of those trains crashed and five tank cars were ablaze.

The cars commonly used to transport petroleum crude oil have a capacity of about 30,000 gallons apiece. In past wrecks, un-breached cars, heated by surrounding flames, have ruptured in dramatic explosions.

“We’ll want to probably suppress the fire enough to assess the integrity and exposure to the other tank cars. We’d certainly want to minimize life risks,” said Mark Chubb, Fire Chief of King County Fire District 20.

“It’s unusual for all five tank cars to breach,” he also said.

Battling flames would not be the only problem that burning tank cars of crude oil would present for responders.

“We have to be mindful of the impact of the smoke column on aviation,” Chubb said. He also noted that a large oil train fire could create problems on Interstate 5, even if the smoke and flames do not reach the highway. “The distraction of an event of this scale,” he said, “is going to be highly disruptive.”

Chubb added: “After you grapple with the fact that it’s a fire and it’s going to go on a while, it’s all about logistics.”

Walt Hubbard, director the King County Office of Emergency Management, viewed Tuesday’s exercise as helpful, because it got people from different agencies together in the same place, talking about how they would coordinate and communicate if there were a serious crude oil train accident.

In addition to emergency responders, staff from local transportation and public health departments attended, as did officials from federal agencies, such as the Federal Emergency Management Administration, the U.S. Coast Guard and the Environmental Protection Agency.

Representatives from BNSF were also on hand. The company operated the train that derailed in Interbay.

For Hubbard, having the railroad representatives at the exercise was important.

“We want to keep them engaged,” he said. Hubbard specifically pointed to dialogue that took place between BNSF representatives and fire officials about what kinds of equipment and people the railroad could deploy after an accident.

“That was a very good exchange,” he said.

Another topic that came up during the exercise was evacuations. If a rail car of crude oil is on fire, U.S. Department of Transportation guidelines recommend that responders consider evacuating people within a half-mile of the accident scene.

The risk of an explosion would be one immediate reason to evacuate the area around the fire. But Chubb, the King County fire chief, also noted that toxic smoke is a hazard, and said that responders would consult with officials from public health agencies and the EPA when considering whether to tell people to leave the area.

Bakken Shale, Crude By Rail, Marine transport, Pipeline transport

REUTERS FACTBOX – California crude sources and oil-by-rail projects

Repost from Reuters

FACTBOX-California crude sources and oil-by-rail projects

Mon Jul 21, 2014

HOUSTON, July 21 (Reuters) – California refiners remain far behind peers elsewhere in the country in replacing expensive imports with cheaper North American crudes from a new production boom.

No major crude pipelines cross the Rocky Mountains, leaving the isolated region dependent on rail to tap the burgeoning bounty in Texas, North Dakota and other growing oilfields.

More than half of the 1.7 million barrels of crude processed by California refineries each day is imported, largely from Saudi Arabia, Ecuador, Iraq and Colombia. The rest comes from California and Alaska, where output is declining.

Several refiners and logistics or pipeline companies are trying to tap U.S. and Canadian crude via rail, but California’s tough regulatory environment and growing opposition in light of fiery crude train crashes elsewhere could halt current projects and stop new ones from starting up.

Tesoro Corp and Savage Companies are proposing a 360,000 barrels per day railport at the Port of Vancouver in Washington that, if approved, could potentially replace more than 40 percent of California’s imported crude. Once railed to Vancouver, crude would be loaded onto barges or ships bound for West Coast refineries.

Here is a rundown of California’s crude slate and existing and pending oil-by-rail projects:

CALIFORNIA CRUDE
California’s 1.7 million barrels per day (bpd) of crude processed in 2013 came from these three main sources:
* Imports: 875,564 bpd, 51 percent of the total
* California, 631,441 bpd, 37 percent
* Alaska, 201,720 bpd, 12 percent
The non-California supply arrives via ships or barges except negligible oil-by-rail shipments, which reached 15,715 bpd in the first quarter of 2014.
That is less than 2 percent of the overall 873,967 bpd that originated on top U.S. railroads throughout the United States in the same period.
By comparison, in 2003 a little more than one-third of the 1.8 million bpd of crude processed in California came from imports:
* Imports, 636,923 bpd, 34 percent
* California, 792,920 bpd, 42.5 percent
* Alaska, 438,805 bpd, 23.5 percent
Source: California Energy Commission
CaliforniaCBR

(Reporting By Kristen Hays, editing by Peter Henderson)