Category Archives: Crude By Rail

Ruling by Little-Known Federal Agency Paves Way for Communities to Say No to Oil-by-Rail

Repost from Desmog Blog

Ruling by Little-Known Federal Agency Paves Way for Communities to Say No to Oil-by-Rail

By Justin Mikulka, September 28, 2016 – 03:58
Oil tank care behind a fence with sign reading 'Think first'
Oil tank care behind a fence with sign reading ‘Think first.’ Main image credit: Justin Mikulka

The community of Benicia, [California,] in the crosshairs of history, made one of those decisions that will make a difference for the country. They stood up and said the safety of our communities matters.”

That was Yolo County Supervisor Don Saylor talking to The Sacramento Bee about the vote by the Benicia City Council to deny a new oil-by-rail facility that oil company Valero was seeking.

But that vote would have been meaningless if not for a recent decision on September 20 by the Surface Transportation Board (STB) that gave Benicia the legal authority to have some say over what happens within its borders.

Created in 1996, the STB is a federal agency which serves as “an independent adjudicatory and economic-regulatory agency charged by Congress with resolving railroad rate and service disputes and reviewing proposed railroad mergers.”

The STB decision helped clear up some of the gray areas around the issue of “pre-emption,” in which railroads are not subject to any local or state authorities or laws because local and state laws are “pre-empted” by federal law.

In 2013 the STB ruled in favor of Norfolk Southern Railway Company, saying once again that federal pre-emption of state laws protected the rail company from lawsuits filed in the state of Virginia.

The basic idea of pre-emption is that for interstate commerce to work, the federal government needs to be the sole regulator of railroads.

As we have reported previously on DeSmog, pre-emption can effectively place rail companies above local law. This has led to developments such as the case of Grafton, Massachusetts, where the construction of the largest propane transloading facility in the state occurred without the need for local approval, construction permits, or even environmental review.

Regarding the Grafton facility, the New England Center for Investigative Reporting wrote that, “Residents were dumbfounded: The location was in the middle of a residential neighborhood, less than 2,000 feet from an elementary school and atop the town’s water supply.”

This above-the-law approach has served rail companies well. And until the recent STB decision, it also appeared to protect oil companies who were moving oil by rail.

But this latest decision about Benicia appears to deliver a real blow to oil companies when it comes to oil-by-rail transfer facilities. Since the companies who receive the oil from the rail cars aren’t railroads, the STB ruled that they are not protected by federal pre-emption. In the decision the STB refers to Valero as a “a noncarrier” which is why the STB ruled they are not able to claim pre-emption.

This allowed Benicia to say no to an oil-by-rail facility in their community. And it has also changed the discussion about this industry as a whole.

San Luis Obispo County, California, has now delayed further the decision about a new oil-by-rail facility in order to consider the latest STB ruling.

Ethan Buckner was one of the organizers for environmental advocacy group Stand, which was working to stop the Benicia facility.

This is a victory for the right of communities to say no to refineries’ dangerous oil train projects. The federal government has said once and for all that there is nothing in federal law that prevents cities from denying these oil companies’ dangerous rail projects,” Buckner said. “The oil industry keeps telling communities they have no right to say no to oil trains, but this ruling once and for all refutes this.”

Jackie Prange was one of the lawyers working on the Benicia case for the Natural Resources Defense Council and explained the potential impact of the STB decision to the San Francisco Chronicle.

We’re pleased with the decision and the implications it will have across the country,” said Prange. “This issue is live in a number of sites across the country. This is definitely a decision that I think cities in other states will be looking to.”

They are definitely paying attention in San Luis Obispo County, as well as in Albany, New York.

Albany is the largest oil-by-rail hub on the East Coast.

Opponents of its oil trains recently had cause for celebration. On September 16, the state’s Department of Environmental Conservation announced that the two companies operating oil-by-rail facilities at the Port of Albany would now be required to undergo full environmental reviews before the agency would renew the companies’ permits.

Chris Amato is a lawyer for Earthjustice who has been working on this issue for years. He believes the STB decision supports what Earthjustice has been saying all along about Global Companies, which owns one of Albany’s oil-by-rail facilities.

The decision by the Surface Transportation Board confirms what we have been saying since 2014: that Global’s claim that state regulation of their operations is pre-empted by federal railroad law is simply wrong,” Amato explained to DeSmog. “Global can no longer attempt to shield their operations from scrutiny under their flawed legal theory.”

Opponents of the Albany oil-by-rail operations have been asking the state to step in for years, but the state has also hidden behind the issue of federal pre-emption. In 2014 the Albany Times Union reported that “Gov. Andrew Cuomo has been deflecting calls for the state to block the trains, saying rail transportation is controlled by the federal government, not the state.”

It would appear that the STB ruling negates New York’s current position and offers an option for the state to have authority over oil-by-rail facilities in Albany.

While the amount of oil moving by rail is roughly half of what it was two years ago, that is mostly due to the current low price of oil. And it hasn’t stopped oil companies’ continued efforts to build out more oil-by-rail infrastructure.

Meanwhile, oil trains continue to derail and explode, as happened in Mosier, Oregon, in June, and opposition to the oil-by-rail industry continues to grow.

This STB decision appears to be a game-changer in the oil-by-rail story. With it, perhaps now more politicians will agree that “the safety of our communities matter” — much more so than oil company profits.

County Panel Approves Rail Expansion In Columbia Gorge Despite Oil-Train Controversy

Repost from KLCC 89.7, NPR for Oregonians

County Panel Approves Rail Expansion In Columbia Gorge Despite Oil-Train Controversy

By Emily Schwing, September 27, 2016
<p>A train carrying crude oil derailed near the Columbia River Gorge town of Mosier, Oregon, in June 2016.</p>
A train carrying crude oil derailed near the Columbia River Gorge town of Mosier, Oregon, in June 2016.

A county planning commission has given its approval to a rail expansion in the same stretch of the Columbia River Gorge where a Union Pacific oil train derailed and burst into flames.

The derailment in June resulted in an oil spill that contaminated groundwater. It also galvanized opposition to increased oil train traffic in the Northwest.

The Wasco County Planning commission voted Monday to approve the rail expansion through the city of Mosier. That’s after a motion to deny the application failed to draw support from a majority on the panel. The railroad wants to increase the length of trains carrying oil and other freight through the gorge. It also says the track project will ease rail congestion and reduce wait times for motorists at crossings.

The environmental advocacy group Friends of the Gorge says the rail expansion puts Mosier and the Columbia River Gorge Scenic Area at further, unnecessary risk.

Correction: Sept. 28, 2016. Union Pacific wants to increase the length of trains carrying oil and other freight through the Columbia River Gorge. An earlier version of this story incorrectly indicated Union Pacific has said it is seeking rail improvements to increase the number of trains.

 

San Luis Obispo Supervisor Candidate received money from Phillips 66

Repost from The Tribune, San Luis Obispo CA
[Editor: Significant quote: “Peschong — who has said he supports the Phillips 66 proposal — said Monday that if elected, he would not vote on the project. ‘I would recuse myself because that’s the right thing to do,’ he said in a phone interview.”  – RS]

Candidate John Peschong’s firm received money from Phillips 66

By Cynthia Lambert, September 26, 2016, 9:02PM

GRANT COOKE: CBR permit denied and new Green Inudstrial Revolution developments impact Benicia

Repost from the Benicia Herald

Grant Cooke: CBR permit denied and new Green Inudstrial Revolution developments impact Benicia

By Grant Cooke, September 22, 2016
P1010301
Grant Cooke

History, or at least precedence, was made Tuesday evening when the Benicia City Council denied Valero a land use permit to bring in volatile Bakken and Tar Sands crude oil from North Dakota and Canada by train.

In what appeared to observers to be a stunning change of heart, the council unanimously agreed with the Planning Commission’s earlier recommendation to reject Valero’s project permit.

With other Northern California cities —and San Luis Obispo—watching carefully, the council’s action set a precedent and reaffirmed a city’s right to regulate local land use and protect the health and safety of its citizens.

The decision may have marked the first significant rejection by a California small town of a fossil fuel company’s proposed major business expansion, and probably notes the diminishing power of the industry in local and state politics.

Interestingly enough, the most prominent rejection by a small town of an oil company’s intended expansion occurred in Denton, Texas. Denton, a quiet and prosperous suburb of Dallas, in the middle of America’s oil patch, banned fracking (a method of shale gas extraction that uses large amounts of water pumped at high pressure into channels drilled into rock to release gas) within the city limits in 2014.

Benicia council’s decision has signaled the city’s first steps away from its past dependence on the fossil fuel industry and its Company Town identity, and marks a tentative step toward a new reality. While local, the decision was significant and reflects the growing momentum of the megatrend known as the Green Industrial Revolution, which is replacing carbon dependent economies with those powered by renewable energy.

Despite the decision, and for years to come Benicia’s tax revenue will still be highly dependent on fossil fuel, and so the developments of the Green Industrial Revolution with its twin drivers of carbon emission reduction and non-carbon energy expansion will have enormous consequences. As the Green Industrial Revolution expands, it will lead to the decline of the fossil fuel industries and correspondingly to the reduction of Benicia’s tax base and carbon-dependent economy.

Here are some other recent events furthering this expansion, and while not local, all have a bearing on Benicia’s future.

The first event happened at the recent G20 meeting in Hangzhou, China. The G20 meeting, which occurs annually, brought together the world’s 20 major economies to discuss international problems and potential policies and solutions. Leaders from the U.S., the European Union, China, Japan and Russia among others, came together for the two-day summit. Next year’s meeting is in Germany.

Woodrow Clark, my writing/business partner, is a member of the B20, a G20 subgroup that focuses on international business and economic issues. As a member of the group that delivered a policy report at the Hangzhou meeting, Woody had a front row view of the historic G20 meeting. Among the policy discussions that the meeting generated, there were some remarkable initiatives. One was that Russia agreed to join the US and China, along with the EU in addressing climate change. I imagine that India will also commit to GHG reductions next year at the G20 meeting in Germany.

This is an expansion of the initial US/China agreement from December’s UN Climate Conference in Paris. It increases the pressure on the fossil fuel industry, which is already beset by plunging oil prices, corrupt and chaotic politics, and furthers the rapid development of non-carbon renewable energy. Its impact on Benicia is indirect, unlike a report from Japan’s Eneco Holdings, LTD, which was part of the G20 Executive Talk Series. (Here’s the link to the vertical edition http://g20executivetalkseries.com )

A second development was also part of the G20 meeting and featured the showcasing of a remarkable chemical breakthrough by Eneco Holdings, LTD, from Japan. The company has the potential to be one of Asia’s largest energy companies with their development of a nano-emulsion technology. It appears that the company has succeeded in making a “complete fusion” between water and oil through the ultra-miniaturization of components at the molecular level. In simple terms, they have succeeded, where all others have failed, in mixing water and oil into a combustible fuel. The result is a mixture that is 70 percent water and stable enough to be a used in internal combustion engines. Further, it is safe and environmentally friendly, emitting about half the carbon, nitrous oxide, and sulfur dioxide released in traditional internal combustion gasoline and diesel combustions. Additionally, when produced in large quantities it will be significantly cheaper than conventional gasoline and diesel.

Originally produced for the Japanese market, Eneco’s Plasma Fusion fuel is being tested and used in China and other parts of Asia. With clean emissions levels, it is ideal for the heavily polluted Asian megacities, and should rapidly grow into a viable alternative to conventional gasoline and diesel. Just imagine how healthy West Oakland’s port area would be without its diesel contaminates? Regardless, this emulsion fuel will be a transitional fuel to hydrogen powered vehicles.

The third development that will have a significant impact on the fossil fuel industries is the continual plunge in the price of solar panels. Last week at a meeting, a solar developer told me that panel prices are now the lowest they have ever been in California, plus they are functioning at their highest levels of efficiency.

Driven by the economic principle of Zero Cost Margins—once the equipment is paid for, the rest of the energy is free—solar and renewable energy are expanding at the rate of Moore’s Law, or doubling about every 18 months. Developing and developed nations are rapidly adopting renewable energy, mostly wind and solar, as a replacement for fossil fuels. In about 20 areas in the world, particularly in Asia, solar and renewable energy are less expensive than fossil fuel. Even Saudi Arabia and United Arab Emirates are developing large solar power generation sites.

Because of Russian aggression and threats of shutting off the natural gas supply, Europe has accelerated its transition from fossil fuel and atomic energy to wind and solar. Germany is a major user of solar energy despite the northern climate, and the United Kingdom is building the world’s biggest offshore wind farm called Hornsea off the Yorkshire coast. Hornsea will be the world’s first offshore wind farm to exceed 1 GW in capacity and will produce enough energy to power well over 1 million homes.

Closer to home, the United States’ Pacific coastline has enough wind and tidal resources to power most of the nation’s needs, and by adding solar to the mix, the U.S. could easily generate enough electricity for centuries to come. Roughly speaking, wind power costs about 2 to 4 cents per kilowatt hour and solar about 5 to 6 cents. PG&E charges around 22 to 24 cents per kilowatt hour, so it’s just a matter of time before on-site or distributive energy overtakes traditional energy delivery.

Further, the carbon industries and the large central utilities have flawed business models that are dependent on ever increasing growth and they cannot adapt to the lower prices available from renewable energy, or the increasing efficiency of vehicles and buildings. This is why Clark and I have written extensively on energy cost deflation and the shrinkage and decline of the carbon industries and the large central utilities.

Finally, we come to Sept. 8’s monumental signing by Gov. Jerry Brown of Senate Bill 32, the legislation that has catapulted California into a leadership role of the international efforts to slow global warming. SB 32 will force the state’s trillion-dollar economy, one of the biggest in the world, into a much smaller carbon footprint. In fact, the legislation requires the state to slash greenhouse gas emissions to 40 percent below 1990 levels by 2030, a much more ambitious target than the previous goal of hitting 1990 levels by 2020. Cutting emissions will affect nearly all aspects of our lives, accelerating the growth of renewable energy, prodding people into buying electric autos, and pushing developers into building denser communities connected to mass transit. (Details: http://www.latimes.com/politics/la-pol-ca-jerry-brown-signs-climate-laws-20160908-snap-story.html ).

One other key element to California’s pursuit of clean air and reduced greenhouse gases is the state’s cap-and-trade program. The program requires the state’s heavy polluters to buy carbon offsets, or credits, to release emissions into the atmosphere, creating an additional operating cost for the oil and utility industries.

SB 32 and the expansion of cap-and-trade will have dramatic impacts on the state’s fossil fuel industries. Likely many of us are driving our last conventional gasoline powered vehicle, with the next one probably powered by electricity or hydrogen. It’s not hard to predict that since the Bay Area’s refineries are the heaviest of the area’s polluters, that the combination of reduced revenue from shrinking demand and increased costs of production and operation will eventually lead to refinery closings.

The fossil fuel industries won’t give up easily, there’s trillions of dollars at stake. Many of the industries leaders and the more prescient investment bankers know that the fossil fuel era has peaked and started to decline, which is why Russia overran the Crimea and is poised to take over Ukraine. Which is why the U.S. and Canada are being besieged by the fossil fuel interests to ignore or eliminate environmental and safety protections that hamper production.

Which is why Valero pushed so hard to transport volatile Bakken crude by rail cars through the densely populated Sacramento corridor and cram the trains into Benicia and a refinery that is not designed or equipped to deal with them. The industries, the refineries and all connected to the fossil fuel era, know that the incredibly lucrative period when oil was king and black gold flowed from the sand is coming to an end.

Bringing this back to Benicia, we see a city that is dependent on Valero for tax revenue and its governing process glimpsing a new reality. Small cities like Benicia that have been so dependent on the fossil fuel industries for so much and for so long, struggle to change. Other cities like those in the deindustrialized Midwest that have suffered sudden collapses of their major companies and tax bases have had to reinvent their economic drivers or just blow away. But it’s hard for a city like Benicia with its apparent prosperity and ease of living to understand that its fossil fuel base is in decline and that the future is elsewhere.

Grant Cooke is a longtime Benicia resident and CEO of Sustainable Energy Associates. He is also an author and has written several books on the Green Industrial Revolution. His newest is “Smart Green Cities” by Routledge.