Category Archives: Crude By Rail

Bakken Crude, Crude By Rail, Derailment, Federal Regulation (U.S.), Iranian oil, Oil exports, Oil imports, Oil prices

Iran agreement could spell end to limits on U.S. oil imports

Repost from Minuteman News, New Haven, CT

Iran agreement could spell end to limits on U.S. oil imports

By Emily Schwartz Greco,  July 29, 2015

What a relief. In exchange for Iran taking steps to guarantee that it can’t build nuclear weapons, the sanctions that have choked off its access to world markets will end without a single shot.

Instead of celebrating this diplomatic breakthrough, conservative lawmakers are plotting to scuttle the pact. And despite their opposition, some Republicans are milking this accord for a pet project: ending all limits on U.S. crude sales.

“Any deal that lifts sanctions on Iranian oil will disadvantage American companies unless we lift the antiquated ban on our own oil exports,” Alaska Senator Lisa Murkowski declared a few weeks back.

It’s an enticing argument. Why should Washington help Iran freely sell its oil while denying the U.S. industry the same liberty?

Well, the ban is already punctured. The United States, which imports 7 million barrels a day of crude, also exports half a million barrels of it every 24 hours.

And most of that oil goes straight to Canada by rail or gets hauled to ports by trains after getting extracted from North Dakota’s landlocked Bakken fields.

Remember that oil train that derailed two years ago in the Quebec town of Lac Megantic, unleashing an inferno that burned for four days and killed 47 people? It was ferrying exported Bakken crude.

Smaller accidents are happening too. Most recently, an oil train derailed near the tiny town of Culbertson, Montana, spilling thousands of gallons of oil from North Dakota.

Ramping up exports would only boost the chances of a major disaster, Oil Change International Executive Director Steve Kretzmann says.

That’s why the restrictions, imposed by Congress during Gerald Ford’s presidency to boost energy independence, should remain unless the government creates better safeguards.

Besides, Iranian oil sales won’t begin bouncing back until early next year at the soonest as diplomats must first verify compliance with nuclear obligations. But there’s no doubt that more crude will eventually gush from that Middle Eastern country.

Prior to the 1979 revolution that brought a theocratic government to power, Iran was exporting 6 million barrels a day — quadruple current levels. By 2008, amid lighter sanctions, it was only shipping 3 million barrels a day overseas. Seven years later, that figure has been halved again.

Iran’s got between 30 and 37 million barrels stored and ready to sell before it even re-starts wells that were shut down when sanctions tightened. As Iran sits atop some 158 billion barrels of oil, the world’s fourth-largest reserves, its potential is huge.

Will American companies, which can freely export value-added oil products like gasoline, lose out if they can’t ship more crude overseas? Not really.

Money spent beefing up infrastructure could be wasted if Iran dislodges new markets. Nixing export restrictions could boost production by half a million barrels daily, but many North American wells won’t make financial sense if the Iran gusher adds to the global glut responsible for slashing oil prices over the past 12 months.

Goldman Sachs analysts expect U.S. oil prices to hover around today’s $50-a-barrel mark for at least another year. If they’re right, many North Dakota and Texas fracking sites won’t be viable anyway.

And why are prices slumping? Domestic output has nearly doubled under President Barack Obama’s leadership to 9.7 million barrels a day. The United States now drills more oil than Saudi Arabia despite the White House’s calls for climate action.

While the leaky ban does chip away at U.S. prices, it’s not as if the Obama years have been a bust for oilmen.

And regardless of whether the industry gets the freedom Murkowski seeks, the United States, Iran, and the rest of the world must figure out how to get by on less oil.

Columnist Emily Schwartz Greco is the managing editor of OtherWords, a non-profit national editorial service run by the Institute for Policy Studies.
Bakken Crude, Barge transport, Big Oil, Big Rail, Crude By Rail, Derailment, Environmental justice, Explosion, Fire, Fracking, Global warming, Phillips 66, Santa Maria Refinery, Sea level rise, Take Action, Tar sands crude, Valero Benicia Refinery, WesPac Energy

Andrés Soto letter: Not fooled by Big Oil and Big Rail

Letter to the editor, The Benicia Herald
[Editor: Note that letters do not appear in the online edition of the Benicia Herald.  Andrés Soto lives in Benicia and is well-known throughout the San Francisco Bay Area for his environmental justice advocacy and his mastery of the saxophone.  I particularly like Andrés’ focus on 19th century historical context.  – RS]

Not fooled by Big Oil and Big Rail

By Andrés Soto, July 23, 2015

Dear Editor:

Andres Soto
Andrés Soto

The recent phenomenon of transporting dangerous, volatile Bakken Crude by rail has created an opportunity for the American people to learn the true motives of Big Oil and Big Rail and what we as impacted communities can do about it.

Continuing derailments, explosions, fires and evacuations have shined the light on the Profit At Any Cost attitude of Big Oil and Big Rail. These industries grew up together in the late 19th century and led to some of the most egregious periods of income inequality, corruption and social conflict in US history.

Now these industries are asking us to trust them and allow them to bring Bomb Trains through our communities, putting our town’s economic viability at risk for a short-term economic gain. Exploding trains all over North America tell us a different story and we are not fooled.

Currently, the Valero Crude By Rail Project and the Phillips 66 San Luis Obispo Crude By Rail Project both put our town at risk for a catastrophe. Communities all over the country are standing up to oppose this high risk venture by Big Oil and Big Rail. Recently, the WesPAC Crude By Rail Project in Pittsburg, California removed the rail part of the project to make it a straight pipeline project.

Fracked Bakken Crude and strip mined Alberta Tar Sands Crude are just two of the Extreme Extracted Crude strategies by Big Oil to bring oil to market that would be better left in the ground. An intelligent global cooling plan to save our planet for future generations and all species requires the we leave the oil beneath the soil!.

Valero has already admitted it can and is bringing Extreme Crude in by barge to the Port of Benicia, thus it does not need the Valero Crude By Rail Project to be profitable. Therefore, it begs the question: Why would we, the people of Benicia, allow this project to proceed when it is just too dangerous?

Global warming is going to cause significant parts of Benicia to be underwater. Shouldn’t we be working on preventing that, rather than trying find ways to contribute to the problem?

We are the people of Benicia and our voices need to be heard! The Benicia Planning Commission and the Benicia City Council have a responsibility to listen to us and do what is in the best interests of ALL Benicians. Stop Valero’s Dangerous Crude By rail Project!!!

Andrés Soto
Benicia, CA
Bakken Crude, CPC-1232, Crude By Rail, Derailment, Explosion, Federal Regulation (U.S.), Fire, Tank car design, Train braking systems, Volatility

Most Recent Oil Train Accidents and Spills Involved ‘Safer’ CPC-1232 Tank Cars

Repost from DeSmogBlog

Most Recent Oil Train Accidents and Spills Involved ‘Safer’ CPC-1232 Tank Cars

By Justin Mikulka  | July 23, 2015 – 03:58

Roosevelt County chief deputy sheriff Corey Reum was one of the first responders to the recent Bakken oil train derailment in Montana, a few miles from the North Dakota border.

“We’re lucky it didn’t ignite,” Reum told ABC News.

That is just one of the things first responders have learned since the deadly accident two years ago in Lac-Megantic. As a Globe and Mail article marking that two year anniversary recently noted, when the train was on fire and rail cars were exploding in Lac-Megantic, no one could figure out why.

The Globe detailed the questions the investigators were trying to answer in the aftermath.

And, perhaps most puzzling of all: How did the crude oil on the train – normally thought of as difficult to light on fire – cause the kind of violent explosions it did?

Now we know that the Bakken oil is different from most other crude, and based on the eight accidents since July 2013 involving derailed trains that involved Bakken oil and resulted in fires, first responders now know the risk the Bakken oil presents.

In Roosevelt County they evacuated a half-mile perimeter around the crash site as a precaution even though there was no fire.

However, despite the lack of fire in this latest accident, 35,000 gallons of oil did spill as four tank cars ruptured. And these were the newer CPC-1232 tank cars that the oil industry is currently suing to keep on the rails even longer than the new regulations allow — which for some 1232 tank cars is not until 2025.

Click to enlarge

There have now been six accidents involving oil trains in 2015 where tank cars derailed and were punctured and oil was spilled. In the first five, there were also fires and explosions.

All six oil train derailments involved the new 1232 model cars that the American Petroleum Institute is suing to keep on the tracks longer than existing long timelines in the new oil-by-rail regulations.

Even Cynthia Quarterman, the former administrator of the Pipeline and Hazardous Materials Safety Administration, the agency responsible for the regulations, was surprised by the timelines in the final regulations.

“That was the biggest surprise, by far,” Quarterman told Argus Media. “The push-back for five years for most things, I thought it was a substantial push-back in terms of dates.”

So while we have learned quite a bit in the two years since Lac-Megantic, not much has changed in how Bakken oil is moved by rail.

  • The oil industry has not addressed the volatile nature of the Bakken oil so it still presents serious fire and explosion risks.
  • The oil and rail industries are fighting the new regulation requirements for modern braking systems on the trains starting in 2021.
  • The oil will still be transported in the obviously inadequate CPC-1232 cars for up to ten years or longer if the oil industry wins its lawsuit.

So, as Sheriff Reum pointed out in his observation, the best strategy for communities along the oil train tracks across North America is to spend the next ten years or so hoping you get lucky.


Image credit: NTSB Safety Recommendation report.

Bakken Crude, Crude By Rail, Derailment, Emergency Readiness & Response, Explosion, Federal Regulation (U.S.), Fire, Hazardous cargo transparency, Hazmat notification, High Hazard Flammable Trains (HHFTs), Rail industry

Feds warn railroads to comply with oil train notification requirement

Repost from McClatchyDC
[Editor:  Significant quote: “Illinois, Kentucky, Ohio, New York and Pennsylvania told McClatchy last month that they had received no updated oil train reports from CSX since June 2014.”  See also the Federal Railroad Administration press release AND letter.  – RS]

Feds warn railroads to comply with oil train notification requirement

By Curtis Tate, July 22,2015
This Feb. 17, 2015, photo made available by the Office of the Governor of West Virginia shows a derailed train in Mount Carbon, W.Va. U.S. transportation officials predict many more catastrophic wrecks involving flammable fuels in coming years absent new regulations.
This Feb. 17, 2015, photo made available by the Office of the Governor of West Virginia shows a derailed train in Mount Carbon, W.Va. U.S. transportation officials predict many more catastrophic wrecks involving flammable fuels in coming years absent new regulations. | Steven Wayne Rotsch AP

The U.S. Department of Transportation warned railroads that they must continue to notify states of large crude oil shipments after several states reported not getting updated information for as long as a year.

The department imposed the requirement in May 2014 following a series of fiery oil train derailments, and it was designed to help state and local emergency officials assess their risk and training needs.

In spite of increased public concern about the derailments, railroads have opposed the public release of the oil train information by numerous states, and two companies sued Maryland last July to prevent the state from releasing the oil train data to McClatchy.

The rail industry fought to have the requirement dropped, and it appeared that they got their wish three months ago in the department’s new oil train rule.

We strongly support transparency and public notification to the fullest extent possible. Sarah Feinberg, acting administrator, Federal Railroad Administration

But facing backlash from lawmakers, firefighters and some states, the department announced it would continue to enforce the notification requirement indefinitely and take new steps make it permanent.

There have been six major oil train derailments in North America this year, the most recent last week near Culbertson, Mont. While that derailment only resulted in a spill, others in Ontario, West Virginia, Illinois and North Dakota involved fires, explosions and evacuations.

In a letter to the companies Wednesday, Sarah Feinberg, the acting chief of the Federal Railroad Administration, told them that the notifications were “crucial” to first responders and state and local officials in developing emergency plans.

“We strongly support transparency and public notification to the fullest extent possible,” she wrote. “And we understand the public’s interest in knowing what is traveling through their communities.”

The letter was written after lawyers for Norfolk Southern and CSX used the new federal oil train rules to support their position in the Maryland court case that public release of the information creates security risks and exposes the companies to competitive harm.

Feinberg added that the notifications must be updated “in a timely manner.”

States such as California, Washington and Illinois have received updated reports regularly from BNSF Railway, the nation’s leading hauler of crude oil in trains. Most of it is light, sweet crude from North Dakota’s Bakken region and is produced by hydraulic fracturing of shale rock.

But to get to refineries on the east coast, BNSF must hand off the trains to connecting railroads in Chicago or other points. Illinois, Kentucky, Ohio, New York and Pennsylvania told McClatchy last month that they had received no updated oil train reports from CSX since June 2014.

The emergency order requires the railroads to report the weekly frequency of shipments of 1 million gallons or more of Bakken crude, the routes they use and the counties through which they pass. The railroads must update the reports when the volume increases or decreases by 25 percent.

Railroads found to be in violation of the requirement face a maximum penalty of $175,000 a day for each incident. The Federal Railroad Administration periodically audits railroads for compliance.

6 – Number of major oil train derailments in North America in 2015.

Though publicly available data on the exact volume of crude oil moved by railroads is difficult to come by, in an April earnings call, Norfolk Southern, the principal rival of CSX, reported that its crude oil volumes increased 34 percent from the first quarter of 2014 to the first quarter of 2015.

That’s not a reliable indicator of the increase in Bakken crude oil on any one route, but Illinois, Ohio and Pennsylvania did say they received updated oil train reports from Norfolk Southern in the past year.

Of the states on the CSX crude oil network McClatchy asked, only Virginia reported receiving an update in the year between June 2014 and June 2015, and that was a week after a CSX oil train derailed and caught fire in February near Mount Carbon, W.Va.

Rob Doolittle, a spokesman for CSX, said the railroad continues to be “in full compliance” with the emergency order. He added that the railroad “recently” sent new notifications to the affected states, “regardless of whether there was any material change in the number of trains transported.”

Read more here: http://www.mcclatchydc.com/news/nation-world/national/economy/article28078114.html#storylink=cp