Repost from Public News Service [Editor: See the Earthjustice News Release for more details. Earthjustice represented San Francisco Baykeeper, Communities for a Better Environment, the Sierra Club, California Sportfishing Protection Alliance, Center for Biological Diversity, Association of Irritated Residents and the Asian Pacific Environmental Network in the lawsuit. – RS]
Judge: Train Companies Must Prepare for Oil Spills
By Suzanne Potter, June 26, 2015
PHOTO: Companies running oil trains in California will be required to have a spill-response plan. Photo credit: vladyslav-danilin/shutterstock
Railroad companies soon won’t be able to carry oil in California unless they have a safety plan – and put aside lots of money to cover any future spills. That’s because a federal judge in San Francisco dismissed an industry lawsuit last week against California’s new railroad safety law.
Patti Goldman, managing attorney for Earthjustice, said the precautions required are common sense.
“All other industries, like the tankers that carry the oil, the refiners, the pipelines, all of them prepare these oil-spill response plans,” she aaid. “It’s time for the railroads to do the same.”
Railroad companies had argued that federal law pre-empts states’ regulation of the railroads.
Goldman said the companies now will have more incentive to get the training, equipment and communications systems in place to prevent the worst-case scenario.
“They improve their practices. They can’t get financial assurances if they’re being really risky,” she said. “And they figure out how to handle the oil better so that they won’t have a spill.”
California’s railroad safety law will go into effect once regulations are finalized.
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.”
Cost of Doing Business? Oil Companies Agree To Pay For Some of Lac-Megantic Damages, But Not to Solve the Real Problems
By Justin Mikulka, June 21, 2015 – 05:58
Image credit: Wikimedia
Although insisting the industry is not to blame, several of the oil companies involved in the fatal Lac-Megantic oil train accident in 2013 have agreed to contribute to a fund to compensate the families of the 47 victims in that accident.
The Wall Street Journal reported recently that oil companies Shell, ConocoPhillips, Marathon and Irving have all agreed to contribute to the fund to avoid future litigation, along with General Electric and the Canadian government. While the actual amounts contributed by most companies involved are not available, the total fund is reportedly at $345 million. That sounds like a lot of money but still is less than the $400 million retirement package for Exxon’s last CEO, for example.
Canadian Pacific Railway Ltd. hasn’t agreed to the settlement, according to the Bangor Daily News, which reports that the judge in the case has delayed his decision on the settlement. Canadian Pacific has asked the court to shield it from future litigation and challenged the Quebec provincial court’s jurisdiction.
It is no surprise that oil companies would prefer to pay fines of tens of millions of dollars to avoid future litigation as well as duck responsibility for the full cost of the cleanup. Rebuilding the destroyed Lac Megantic property is expected to take as long as eight years and as much as $2.7 billion.
This approach has proven successful for the oil and rail industry in the past. In 2009, when a Canadian National (CN) ethanol train derailed in Cherry Valley, Illinois resulting in a fire and the death of one woman and injury to several others, the railroad paid the surviving family members $36 million.
The National Transportation Safety Board laid some of the blame for that tragedy on the “inadequate design of the tank cars, which made them subject to damage and catastrophic loss of hazardous materials during the derailment.”
But CN just paid the $36 million and the industry kept using the same inadequate DOT-111 tank cars to move ethanol and crude oil. It was the DOT-111 tank cars that were involved in the Lac-Megantic accident four years later, and the same tank cars that the oil industry is currently fighting to keep on the rails as long as possible.
There is no question it is far more profitable for the oil and rail industries to continue to use unsafe rail tank cars and to just pay off the families of the victims or for environmental damages from oil spills after any accidents than to invest in safer tank cars.
Canadian National has had two oil train derailments already in 2015 which the company reports have cost it $40 million. However, CN still reported over $700 million in net income for just the first quarter of 2015.
Business as usual in the oil-by-rail industry is highly profitable. Which is why the oil and rail industries are fighting against any safety measures that would require investment and cut into profits.
After the faulty tank cars, the two other issues the oil industry has fought against are modernized braking systems and removing the volatile and explosive natural gas liquids from the oil itself via stabilization.
Both of these proven safety measures would cost the industry billions of dollars to implement. So they haven’t done anything. It is far more profitable to live with the consequences of some accidents and make relatively small payouts to avoid lawsuits than it is to invest in safe alternatives.
In 2013, the year of the Lac-Megantic disaster, the big five oil companies made $93 billion in profits. Fines and settlements like those resulting from oil train disasters or deadly refinery accidents are simply a cost of doing business. And for these companies, it turns out to be a very small cost when compared to the profits.
In a forum on rail safety held in Albany, NY this month, emergency first responders from three oil train accidents (Lac-Megantic, Lynchburg, Virginia and Galena, Illinois) recounted their experiences dealing with oil train fires and explosions. While offering excellent insights to the risks involved with oil-by-rail, there also was insight into how the rail companies responded once the accidents occurred.
For both the Lynchburg and Galena accidents, it was noted that the rail companies were on the scene almost immediately. And they rebuilt the tracks and got them back in operation as soon as possible because in Galena, rail downtime was costing the company $1 million an hour. When money is at stake, the rail companies jump into action.
Did the rail company jump into action the day before the Lynchburg rail accident when an inspection revealed a defect in the track in Lynchburg? No.
At the forum in Albany, Lynchburg Battalion Chief Robert Lipscomb summed up the situation nicely.
“You got to remember their business is making money. Our business is taking care of emergencies. So sometimes those two don’t line up exactly right,” Lipscomb said.
When your business is making money, it is much easier to accomplish your goals by lobbying regulators to ensure weak regulations and paying out meaningless fines when something goes wrong than to invest in safety.
The oil trains will return to Lac-Megantic in 2016, with the same inadequate tank cars and 19th century braking systems. And they will be full of unstabilized, dangerous and very profitable oil.
