Repost from Reuters [Editor: Significant quote: “The company can ship railed-in crude Alon doesn’t process to other refiners via pipeline.” Presumably this would be a Benicia Valero alternative to receiving direct rail shipments of Bakken crude? – RS]
Alon USA Energy’s California oil-by-rail project approved
By Kristen Hays, September 9, 2014
The first substantial oil-by-rail project at a California refinery won approval on Tuesday despite a last-minute push for more scrutiny by some environmental groups.
The facility at Alon USA Energy Inc’s shuttered Bakersfield refinery in Kern County, home to about 65 percent of California’s heavy oil output, will push crude offloading capacity to as high as 150,000 barrels per day (bpd) from the current 13,000 bpd.
The Kern County Board of Supervisors approved the $100 million project after a lengthy environmental review. Alon Chief Executive Officer Paul Eisman told the board the project could start up by the third quarter next year.
“Now go put our people to work,” board Chairman Leticia Perez said.
The refinery, which has been operating as a terminal, will receive crude in railcars that meet the latest safety standards with thicker hulls and reinforced valves.
Some residents and environmental groups including Earthjustice and the Sierra Club opposed the project, citing dangers of crude trains and “plumes of toxic smoke” emitting from the plant.
Other residents, unions and economic development leaders want the refinery and rail project jobs and are satisfied with planned safety measures.
“That plant’s been a fixture in this town since way before I was born. Alon is ready to put it back to work at full capacity,” local contractor Sam Ackerman said.
The company can ship railed-in crude Alon doesn’t process to other refiners via pipeline. Credit Suisse said in a note to investors this week that the project could add $7 per share in value to shareholders.
Alon’s facility will be the second oil-by-rail terminal in Bakersfield, where pipeline company Plains All American will start up a 70,000 bpd project in October.
Both seek to increase California refiners’ access to booming inland U.S. and Canadian output, which is cheaper than imports that make up more than half of all crude processed in the state. Other refiners trying to do the same have faced delays as well as opposition in light of a string of fiery crude train crashes elsewhere in the last year.
The Alon project at the 70,000 bpd Bakersfield plant also includes upgrades to several units at the refinery to enable processing of light crude, including output from Texas and North Dakota’s Bakken shale, as well as equipment to offload undiluted Canadian bitumen.
The plant is already built to process California’s heavy crude, 65 percent of which is produced in Kern County.
The project’s approval comes nearly two years after the company shut down the plant because it was unprofitable. Alon said reopening the refinery will bring 100 jobs as well as 30 more for the rail operation.
Safety of Citizens in Bomb Train Blast Zones in Hands of North Dakota Politicians
2014-09-05, Justin Mikulka
Lac Megantic train explosion
When North Dakota Congressman Kevin Cramer was asked recently if it was scientifically possible to make Bakken crude oil safer by stripping out the explosive natural gas liquids with a process like oil stabilization, his response was quite telling.
“So scientifically can you do it? Sure, but you have to look at it holistically and consider all of the other elements including economics, and is the benefit of doing something like that does that trump other things like speed of trains, and what kind of cars,” he said.
This is very similar to the comments made by Lynn Helms of the North Dakota Department of Mineral Resources according to the July 29 meeting minutes provided to DeSmogBlog by the Industrial Commission of North Dakota.
“In response to a question regarding other mechanisms besides oil conditioning in the field, Mr. Helms stated there are other mechanisms — none of them without a significant downside….It makes sense to do the conditioning in the field. There are other options to do it downstream somewhere in a very large and very expensive operation.”
In a June 24 e-mail obtained by DeSmogBlog through a freedom of information request, Helms identified himself as “the primary contact for Governor Dalrymple’s team on the crude safety issue” in response to an inquiry from the Department of Energy about who would be working on the issue of Bakken crude oil safety.
As the point person on this issue for North Dakota, Helms’ opinions carry significant weight. And just like Congressman Cramer, Helms is pointing out the “significant downside” of stabilization, which is that it is an expensive operation.
It is well established that stabilization works and would make oil trains much safer. Not even North Dakota politicians are arguing that point anymore. But the industry doesn’t want to pay for it. And right now, the only ones who could mandate them to stabilize the oil via new regulations are the three members of the Industrial Commission of North Dakota.
What About The Feds’ Oil-By-Rail Regulations?
The reason North Dakota politicians are discussing this issue at all is because the federal government has essentially punted the question.
In the 200 pages of new proposed oil-by-rail regulations released in July, there is not a single line about requiring the oil or rail companies to stabilize the oil prior to shipping.
Stabilization is a process that removes the explosive natural gas liquids from the oil and is required by pipeline companies. This process would turn the current Bakken “bomb trains” into simple oil trains. They would still pose a threat of oil spills, but would no longer threaten to kill people in massive explosions like the one in Lac-Megantic, Quebec, or be a target for terrorism.
While the proposed regulations don’t require stabiliazation, they do include three questions that indicate lawmakers are aware that stabilizing or “degassifying” the crude makes it safer and that producers have the ability to reduce the volatility of crude oil prior to shipping it by rail.
Is the current exception for combustible liquids sufficient to incentivize producers to reduce the volatility of crude oil for continued use of existing tank cars?
Would an exception for all PGIII flammable liquids further incentivize producers to reduce the volatility of crude oil prior to transportation?
What are the impacts on the costs and safety benefits of degasifying to these levels?
As previously reported by DeSmogBlog, the regulators in charge of finalizing the new proposed oil-by-rail regulations are big believers in cost-benefit analysis. And looking at their questions, it is clear they know the oil can be made less volatile. But they want to hear more from the industry about the costs of doing this before doing anything. And instead of requiring stabilization, they are looking for ways to “incentivize” the producers to do it.
Oil Conditioning vs. Oil Stabilization
The North Dakota Industrial Commission is holding a hearing on September 23rd during which it is requesting input on how to make the Bakken crude oil safer for transport. The headline of its press release, “Hearing set on oil conditioning practices,” almost ensures that oil stabilization will never be required in North Dakota.
Oil conditioning is not the same as oil stabilization. Oil conditioning can be done with all of the existing equipment already in the field in North Dakota and thus the cost is minimal. However, in situations where the industry needs to ensure it strips out all the volatile natural gas liquids from the oil, as in the Eagle Ford formation in Texas, they use a different process called stabilization.
Helms and the members of the Industrial Commission like to cite the North Dakota Petroleum Council Study on Bakken Crude Properties when claiming that Bakken crude is no different than other crude oils and thus doesn’t require stabilization. However, that very report makes it clear that conditioning, done with the equipment currently available, is insufficient and was never designed to achieve the type of results expected from stabilization.
From the report, prepared by industry consultant Turner and Mason:
The data consistency [sic] indicates that field equipment is limited in its ability to significantly impact vapor pressure and light ends content.
This is consistent with the expected capabilities of the equipment.
The field equipment is designed to separate gas, remove water and break emulsions to prepare crude for transport, and not remove significant levels of dissolved light ends from the crude.
Meanwhile, at the August 26 meeting of the North Dakota Industrial Commission, Helms once again acknowledged the effectiveness of stabilization, as reported by Petroleum News: “This is very routinely done with high gravity condensate — oil that condenses out of a gas well as it is produced,” Helms said. “That has to be stabilized before it can move through the system.”
Helms word choice is telling. Oil that “has to be stabilized before it can move through the system.” Oil that is moved by pipeline has to be stabilized before it can be moved because pipeline companies require it. The rail companies do not.
Despite his acknowledgement of how stabilization is routine in the pipeline business, at the August meeting, Helms was also sure to point out that in North Dakota they expected to choose conditioning as their solution, as reported by Petroleum News.
Helms agreed, saying conditioning is likely more suitable for North Dakota since the equipment is already in place on well sites but he’d like to hear from others at the upcoming hearing.
“We haven’t closed the door to (stabilization),” Helms said. “We want to hear what people have to say.”
However, if the North Dakota Industrial Commission actually wanted to hear what people have to say about stabilization, the press release about the September 23rd hearing probably should have actually mentioned stabilization. It doesn’t.
The North Dakota Industrial Commission
If there is going to be any regulation requiring stabilization of the Bakken crude it will require the three members of the North Dakota Industrial Commission to make it happen.
Governor Jack Dalrymple is one member of the commission. And his point man on this issue, Helms, has already made it clear he supports conditioning over stabilization.
North Dakota Attorney General Wayne Stenehjem is another member. When a report by the Pipeline and Hazardous Safety Materials Administration recently concluded that Bakken oil was more flammable than most other crude oils, Stenehjem responded to the science by saying, “It seems like they are picking on us.”
The third member of the commission is Agricultural Commissioner Doug Goehring. At the August 26th meeting of the commission, Petroleum News reported that Goehring opposed stabilization for an unlikely reason for someone who helped oversee the massive expansion of the Bakken oil production.
Agriculture Commissioner Doug Goehring voiced his concern with dotting the landscape with stabilizer units.
“We’ve been trying hard to shrink that footprint out there on the landscape, and that’s going to make that awfully difficult.”
So in all likelihood, stabilization is off the table and conditioning will be the new regulation. Helms and others often say conditioning is already being done because the equipment is already in the field. Yet, according to the minutes from the July meeting of the Industrial Commission, Governor Dalrymple said: “Right now we are assuming producers are doing conditioning but we do not have a mechanism to verify that.”
So, let’s get this straight. It is more than a year after the explosion of a Bakken crude train in Lac-Megantic that killed 47 people. And it’s been more than eight months since a train of Bakken crude exploded in Casselton, ND. And the best the regulators can do is hold a hearing to talk about how to do regulate a practice that’s inadequate and they already assume is being done?
WHERE: Benicia City Hall, 250 East L Street
WHEN: This Thursday, September 11, 2014
PACKED HOUSE: Plan to arrive between 3pm and 7pm
THIS WILL BE DIFFERENT…
At this hearing, our Planning Commissioners will be asking questions and making their own comments on the Draft Environmental Impact Report. This is a very important part of the process. Please attend to hear what our Planning Commissioners have to say.
This will ALSO be the last PUBLIC comment hearing on Valero’s Draft Environmental Impact Report. If you have not spoken before, this is your last chance – you can still speak even if you have not submitted a speaker card before. And if you were at one of the last hearings and submitted your card but they didn’t get to you or you left before they could get to you, you can speak at this hearing.
Bring a friend or family member. See you THIS Thursday!NOTE: The Planning Commission meeting begins at 6pm to consider another agenda item. The Crude By Rail hearing begins at 7pm. It will be another packed house – you will have to arrive early to get a seat.
Note also that the public WRITTEN comment period has been extended until September 15. If you can’t make the meeting, or have already spoken, there is still time to send in written comments. Again, see RESOURCES for help on written comments.
LIKE THE LOGO? T-shirts, sweatshirts, mugs, stickers, and more. All proceeds go to
Benicians For a Safe and Healthy Community. http://www.cafepress.com/safebeniciaPlease help us raise funds
We need your support to print flyers, mailers etc. Your contribution on GoFundMe will make a world of difference to our grassroots organization. Thank you!!
CONTACT US
BENICIANS FOR A SAFE AND HEALTHY COMMUNITY
P.O. Box 253, Benicia, CA 94510
(707) 742-3597 info@SafeBenicia.org
Rail industry blocking technology to prevent derailments
By Robert Ahern – – Monday, September 8, 2014
FILE – In this Nov. 6, 2013, file photo, a BNSF Railway train hauls crude oil near Wolf Point, Mont. The U.S. Department of Transportation ordered railroads last month to give state officials specifics on oil train routes and volumes so emergency responders can better prepare for accidents. North Dakota’s State Emergency Response Commission unanimously voted to release the state’s information Wednesday June 25, 2014. (AP Photo/Matthew Brown, File)
America’s recent energy boom has made North Dakota the No. 2 oil-producing state behind Texas and has brought jobs and prosperity to the state and the region.
It has also brought increased rail travel as the oil is transported from Bakken shale fields. Unfortunately, increased rail traffic has coincided with a rise in the number of rail accidents, including derailments. The most recent came last December, when a moving train carrying crude oil struck a derailed train near Casselton, igniting a massive fireball and causing an evacuation. Thankfully, there were no injuries.
Despite the railroad industry’s many advances, some problems have persisted for years, frustrating rail engineers. Bearing failure that often leads to derailments is one. Accidental decoupling is another. So are poor truck designs.
The good news is that innovative companies from outside the railroad industry have devised solutions. The bad news is that these solutions have been shunned by an industry hostile to those outside its closed culture. This stonewalling puts American lives and freight at risk. Congress needs to intervene.
Consider the strange case of Columbus Castings, of Columbus, Ohio – a railroad industry outsider, despite being the nation’s largest steel foundry. Columbus Castings created a product called the Z-Knuckle, which prevents accidental uncoupling.
The Z-Knuckle met the railroad industry’s newly created standard for such devices. But in an inexplicable twist, because the Z-Knuckle was the only device that met the standard, the industry refused to authorize its use. Instead, it simply chose not to enforce its own standard.
Other nonsensical examples abound. Several companies, including Amsted Rail, Standard Truck Car, National Railway Equipment and A. Stucki Co., have created advanced trucks – the framework that holds a rail car’s four wheels – that are less likely to derail and use less energy, due to enhanced suspension. These have been rejected by the railroad industry.
Stage 8 Locking Fasteners of San Rafael, Calif., took on the issue of derailment caused by wheel-bearing failure, the nation’s third-largest cause of train derailments, according to a 2012 University of Illinois study.
Wheel bearings are the round, metal rods inside a rail car’s wheel assembly that help the wheels roll smoothly. Bearings fail because the screws holding the bearing end caps — which maintain proper tension in the bearing — vibrate loose after thousands of miles of service. This can lead to derailments.
The rail industry knows this is a serious problem. It has tried for 50 years to devise a reliable screw-locking technology of its own, but to no avail. The best locking system the rail industry has been able to come up with still allows a failure rate of 23 percent. This is unacceptable.
Rail industry engineers have blamed the wheel bearings themselves, theorizing that the material inside the bearings was breaking down, causing them to lose their clamp on the screws, which then vibrated loose.
That answer obscures the real problem and provided a windfall to the bearing-replacement companies that would stand to lose profits if a credible screw-locking system is devised.
In 2009, a better system was devised. Stage 8 invented the Cap Screw Locking System designed to keep rail car wheel screws from vibrating loose. But it ran into the mighty rail industry bureaucracy. All new products that companies want to market to the nation’s rail carriers must be approved by the American Association of Railroads (AAR), the freight rail industry’s powerful trade group.
The organization withheld approval for years, blocking the new product that would threaten the revenue stream of bearing-replacement suppliers, who are cozy with Big Rail.
Stage 8 continued to hack through the bureaucratic thicket and when daylight appeared, the AAR set up another hurdle: A field test intended to prove the device’s failure. Instead, after 150,000 miles of the AAR’s own, real-world testing on rail cars, hauling coal from Wyoming to Missouri, the locking device showed no failures; not a single screw was loosened. It was a complete success.
Many companies have created groundbreaking solutions to problems that have bedeviled the railroad industry for years. Congress should act on their behalf – and on behalf of the railroads themselves and their many users – to help make America’s railroads safer. The passage of legislation would repair the railroad’s broken system.
Congress should adopt legislation that would require the Federal Railroad Administration – the government agency that oversees the rail industry – to adopt and enforce mandatory safety standards that would ensure bearing failures, decoupling and other accidents do not happen. This would permit railroads to use any technology – from inside or outside the industry — that meets the standards. This would lead to safer railways across the country – and fewer derailments in places like North Dakota.
Robert J. Ahern is director and executive vice president of Stage 8 Locking Fasteners Inc.
THIS WILL BE DIFFERENT…
