Category Archives: Bakken Shale

Air Quality, Bakken Shale, Crude By Rail, DEIR, Derailment, Explosion, Federal Regulation (U.S.), Valero Benicia Refinery, Valero Energy Corporation

Bloomberg News – Valero Oil-by-Rail Plan Has ‘Unavoidable’ Air Impacts, City Says

Repost from Bloomberg News

Valero Oil-by-Rail Plan Has ‘Unavoidable’ Air Impacts, City Says

By Lynn Doan Jun 17, 2014

Valero Energy Corp. (VLO)’s plan to unload as many as 70,000 barrels of oil a day from trains at its Benicia refinery will increase emissions across California in a “significant and unavoidable” way, a city report shows.

Valero has applied to build a rail-offloading rack at the plant northeast of San Francisco that would take oil from as many as 100 tanker cars a day. The San Antonio-based company delayed the project’s completion by a year to early 2015 as it awaits approval from the city.

“Project-related trains would generate locomotive emissions in the Bay Area Basin, the Sacramento Basin, and other locations in North America,” the city of Benicia said in an environmental assessment posted on its website today. “The city has no jurisdiction to impose any emission controls on the tanker car locomotives; therefore, there is no feasible mitigation available to reduce this significant impact to a less-than-significant level.”

Valero is proposing the rail spur as record volumes of oil are extracted from North American shale formations that the U.S. West Coast has little pipeline access to. California’s refiners are already bringing in the biggest-ever volumes of oil by rail as they seek to displace shrinking supplies of crude within the state and from Alaska.

A series of explosions and derailments of trains carrying crude, including one in Quebec that killed 47 people in July, touched off a flood of letters to the city of Benicia about Valero’s project and compelled the planning commission to put off a decision until an environmental study could be done.

New Rules

Regulators in both the U.S. and Canada are imposing new rules designed to improve the safety of trains carrying oil and a group of California agencies released a report June 10 recommending ways in which the state should respond.

Earlier this month, the city council in Vancouver, Washington, voted to oppose a proposal by Tesoro Corp. (TSO) and Savage Cos. to build a 360,000-barrel-a-day, rail-to-marine complex at the Port of Vancouver.

Valero’s Benicia project would probably result in a spill of more than 100 gallons once every 111 years, according to an analysis conducted as part of the city’s environmental report. The report was prepared by researchers at the University of Illinois’s Rail Transportation and Engineering Center in Urbana, Illinois.

California’s refiners received 557,315 barrels of oil by rail in April, the most ever for that month, state Energy Commission data show. Crude from Canada made up 45 percent of the state’s total rail receipts. Oil from North Dakota accounted for 22 percent.

’Challenged’ Market

Valero has described refining in the western U.S as “a challenged market” with margins close to break-even when all of the region’s plants are running normally. Profits from the 132,000-barrel-a-day Benicia refinery are particularly under pressure, Joe Gorder, the company’s president and chief executive officer, said in a presentation May 21.

The plant “produces a significant yield of gasoline, which, of course, we’ve seen the margins compressed on and demand not be the greatest on,” Gorder said at the UBS Global Oil and Gas Conference in Austin, Texas. Sourcing alternative crudes on the West Coast “would increase the economics out there for us substantially,” he said.

Spot California-grade diesel has traded about 3.5 cents a gallon above gasoline in Los Angeles this year and averaged an 8.75-cent premium in 2013, data compiled by Bloomberg show.

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

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net Charlotte Porter

Bakken Shale, CPC-1232 standard, Crude By Rail, Disclosure of tank car contents, DOT-111, Emergency Readiness & Response, Rail Safety, Rail tanker cars

Expert Presentations: Oil Spill Prevention & Response Forum, Vallejo, CA

Powerpoint Presentations from the Oil Spill Prevention & Response Forum, Vallejo 16May2014:

1. Ernie Sirotek – Petroleum Crude by Rail
2. Gordon Schremp – OSPR Meeting Vallejo – CEC Final 5-6-14 GDS
3. Neil Gambow – New Regulations for Tank Car Construction
4. Joy Lavin-Jones Regs PP
5. Ed Hughlett – Casualty Lessons Learned CMA 2014
6. Lexia Littlejohn – First 96 Hours.CMA Presentation.Littlejohn
7. M Thomas OSPR Regulatory Overview
8. Nicole Stewart Spill Prevention and Response Day – KM
9. Geoffrey Ashton – LNG in NA safe bunkering procedures

Bakken Crude, Bakken Shale, Derailment, Explosion, Federal Regulation (U.S.), Oil Industry, U.S. Department of Transportation

Oil industry: no reason to regulate bakken crude differently

Repost from NGI’s Shale Daily
[Editor: NGI stands for Natural Gas Intel.  This report on oil industry trade groups is interesting, if not exactly reliable.  – RS]

Trade Group: No Reason to Regulate Bakken Crude Differently

Charlie Passut  |  May 15, 2014

Crude oil from the Bakken Shale isn’t significantly more dangerous than crude from other plays to transport by rail and poses a lower transport risk than other flammable liquids, but it may contain higher amounts of dissolved flammable gases compared to heavier crudes, according to a report commissioned by the American Fuel & Petrochemical Manufacturers (AFPM).

AFPM, which represents nearly all of the petroleum refiners and petrochemical manufacturers in the United States, said it surveyed 17 of its members and collected approximately 1,400 samples of Bakken crude for its 38-page report, which was released Thursday. The trade association said it commissioned the report at the request of the U.S. Department of Transportation (DOT).

“The results show that while Bakken crude (and other light crudes) may contain higher amounts of dissolved flammable gases compared to some heavy crude oils, the percentage of dissolved gases would not cause Bakken crude to be transported under a DOT hazard class other than Class 3 Flammable Liquid and does not support the need to create a new DOT classification for rail transportation,” the report said.

DOT has been investigating a series of train derailments involving rail cars containing Bakken crude. The investigation is part of DOT’s Operation Classification, also known as the “Bakken Blitz,” (see Shale Daily, Feb. 26).

Last February, DOT issued an emergency order [Docket No. DOT-OST-2014-0025] requiring rail carriers to test crude oil before transport, and to classify crude as a Packing Group (PG) I or II hazardous material, effectively forbidding its classification under PG III, a “low danger” category.

DOT issued a second emergency order last week [Docket No. DOT-OST-2014-0067], advising against the use of older, more vulnerable rail cars for the shipment of Bakken crude (see Shale Daily, May 7). Railroads were also required to notify the appropriate state emergency response commissions when the trains carrying more than 1 million gallons of Bakken crude are moving through their states.

According to the AFPM survey, the flashpoint for Bakken crude ranged from -59 to 50 degrees Celsius. The trade association said that meant it meets the criteria for transport as a PG I, PG II or PG III material or as combustible liquids. It also found that Bakken crude’s initial boiling point ranged from 2.2 to 66.9 degrees Celsius. AFPM said oil with an initial boiling point of 35 degrees Celsius or lower could be shipped as PG I, but other oils could be sent as PG II, PG III or as combustible liquids.

The vapor pressure of Bakken crude at 50 degrees Celsius tested at a maximum 16.72 pounds per square inch absolute (psia). Meanwhile, rail tank car pressures on delivery tested at a maximum of 11.3 pounds per square inch gauge (psig), which AFPM said demonstrates that Bakken crude may be safely transported in DOT Specification 111 tank cars.

“Measured tank car pressures show that even the older DOT 111’s authorized to transport Bakken crude oil are built with a wide margin of safety relative to the pressures that rail tanks may experience when transporting Bakken crude oil,” the report said.

Last week, two DOT agencies — the Federal Railroad Administration (FRA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA) — issued a safety advisory strongly urging those shipping or offering Bakken crude to use tank car designs with the highest level of integrity available in their fleets. The agencies advised offerors and carriers to try and avoid using older legacy DOT Specification 111 or CTC 111 tank cars for the shipment of Bakken crude.

AFPM added that of all the samples taken of hydrogen sulfide (H2S) concentrations, only one sample tested above the short term exposure limits set by the Occupational Safety and Health Administration. The lone high sample tested at a maximum 23,000 ppm. “Where they exist, high H2S concentrations are addressed under existing transportation and workplace safety regulatory provisions without affect to rail tank car authorizations,” the report said.

The report also compared the Reid Vapor Pressure (RVP) — a measurement for volatility — of Bakken crude to other types, including crude from the Eagle Ford Shale in Texas and the Denver-Julesburg (DJ) Basin in Colorado. Other crudes tested were Louisiana Sweet (LLS), West Texas Intermediate (WTI), Arabian Super Light, Agbami, Sarahan Blend, Brent, Alvheim blend, Arabian Heavy, Alberta Dilbit and Alba.

The report said Bakken crude had an RVP of 7.83 psia. By comparison, crude from the DJ Basin tested at 7.82 psia, the Eagle Ford was 7.95 psia, LLS was 4.18 psia and WTI was 5.90 psia. Arabian Super Light tested at the highest RVP (20.7 psia) while Alba was the lowest (1.6 psia).

“While survey data on specific samples of Bakken crude oils (like other light crude oils) showed higher gas content than assay data, it may be expected that similar variations arise in the case of non-Bakken crude oils,” the report said. “The data suggests that Bakken crude oil is within the norm for what might be expected in the case of light end content in light crude oils.”

The report was prepared by Frits Wybenga, hazardous materials consultant for the Rockville, MD-based firm Dangerous Goods Transport Consulting Inc.

Last July, an unattended freight train transporting Bakken crude rolled downhill, derailed and exploded in Lac-Megantic, Quebec, killing 42 people (see Shale Daily, July 9, 2013).

Six months later, a 90-car crude oil train loaded with Bakken crude heading to a refinery in Florida derailed in a rural area near Aliceville, AL. According to DOT, more than 20 cars derailed and at least 11 ignited, causing an explosion and fire. Although no one was injured in the incident, an undetermined amount of crude fouled a wetlands area, causing an estimated $3.9 million in damage.

On Dec. 30, 2013, a BNSF train carrying Bakken crude hit a grain train traveling in the opposite direction that had derailed earlier near Casselton, ND. The crash caused 21 cars carrying crude to derail, 18 of which subsequently ruptured and exploded (see Shale Daily, Dec. 31, 2013). There were no injuries, but about 1,400 were evacuated. Damage was estimated at $8 million.

Bakken Shale, California Regulation, Capitol Corridor, Federal Regulation (U.S.), Local Regulation, Oil Industry, Rail industry, Valero Crude By Rail

Sacramento Bee editorial calls for delay in crude by rail

Repost from The Sacramento Bee

Editorial: Oil trains require more safety and scrutiny

By the Editorial Board
Published: Thursday, Apr.  3, 2014

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Randall Benton /  A tanker truck drives past train cars containing crude oil at McClellan Park. Until recently, local officials didn’t know the site was being used for oil transfers.

You’d think that local officials would be told when trains full of highly flammable oil are rolling through their cities so  they could be ready for derailments and other emergencies.

But fire officials do not get detailed information on oil shipments from the railroads, and they are only just finding out that as many as 100 train cars filled with crude could be traversing the Sacramento region daily on the way to a proposed terminal at Valero’s refinery in Benicia.

The oil trains would use the Union Pacific line that runs through the downtowns of Roseville, Sacramento, West Sacramento and Davis and that also carries the Capitol Corridor commuter service,  The Sacramento Bee’s Tony Bizjak and Curtis Tate of McClatchy’s Washington bureau reported Wednesday.

Last week,  they reported that since at least September, oil trains have pulled into the former McClellan Air Force Base, where crude is transferred into tanker trucks – without a required air quality permit and without local emergency officials being notified.

What is becoming increasingly – and alarmingly – clear is that regulations and disclosures are not keeping pace with more frequent rail shipments of oil. Local and state officials are right to push for better preparation and training, funded at least partly by railroads and oil companies.

Crude oil coming into California by rail increased from 1 million barrels in 2012 to more than 6 million in 2013, according to the state Energy Commission. Oil companies are shifting to rail because more crude is being pumped out through hydraulic fracturing in North Dakota, Canada and other inland areas.

Some oil from fracking is more flammable than conventional crude, and the safety risk is not hypothetical. Last year, an oil train derailed in Quebec, sparking a massive fireball that killed 47 residents and leveled the entire town center. There’s also the danger of environmental damage.  More crude oil was spilled in U.S. rail incidents last year than in the previous four decades combined.

Federal regulators and the rail industry have cooperated on voluntary safety measures taking effect July 1, including slower speeds through major cities and more frequent track inspections, and are working on better-reinforced tank cars. These common-sense rules should be mandatory.

Californians don’t need to look back too far to see the devastation that can happen when corners are cut on safety and local officials are kept in the dark.

A PG&E pipeline exploded in San Bruno in 2010, killing eight people and leveling nearly 40 homes. Company officials fell down on maintenance and ignored safety threats, even after a similar 2008 blast in Rancho Cordova killed a man and destroyed five homes. Tuesday, a federal grand jury indicted PG&E on 12 criminal counts of violating pipeline safety laws.

Every energy source comes with some risk. It’s good that America is reducing its reliance on foreign oil, particularly from the volatile Persian Gulf. But domestic oil must be transported safely. Rail could be one avenue – but not until safety and disclosure rules are much stronger.