Category Archives: Crude By Rail

North Dakota Considers Requiring Treatment of Bakken Crude to reduce volatility

Repost from The Wall Street Journal

North Dakota Considers Requiring Treatment of Bakken Crude

Hearing Is Planned on Whether Shale Oil Should Be Made Less Volatile Before Transport
By Chester Dawson, August 10, 2014

North Dakota officials are considering requiring energy companies to treat the crude they pump from the Bakken Shale to make it less volatile before it is loaded onto trains.

The North Dakota Industrial Commission plans to hold a public hearing in the coming weeks on possible steps to reduce volatility at a well site before oil is stored or transported, said a spokeswoman for North Dakota Gov. Jack Dalrymple.

The commission, the state’s chief energy regulator, is considering issuing new standards for treating crude as well as monitoring requirements, she said.

Several trains carrying Bakken crude have derailed since the summer of 2013, exploding violently and in one instance killing 47 people in Quebec.

As The Wall Street Journal has reported, light crude tapped from North Dakota shale is more combustible than many other grades of oil and, unlike in other places, seldom stabilized.

Production of this volatile oil through hydraulic fracturing has soared, accounting for most of the additional three million barrels a day of oil that the U.S. produces today compared with 2009. Much of that is shipped to refineries by railcars, especially crude produced in the Bakken where there are few oil pipelines.

Mr. Dalrymple, one of three members of the state commission, on Friday briefed visiting federal officials including Energy Secretary Ernest Moniz and Transportation Secretary Anthony Foxx on proposals for treating Bakken crude oil in the field. The federal government has been weighing whether to require stabilization.
Energy executives point out that neither federal nor state regulations require crude to be stabilized before it is transported. Some say stabilization is unnecessary.

Most oil producers in North Dakota haven’t installed stabilizing equipment designed to reduce crude volatility, which is commonplace in similar shale oil fields such as the Eagle Ford formation in South Texas.

Stabilizers use heat and pressure to force light hydrocarbon molecules—including ethane, butane and propane—to boil out of the liquid crude. The operation lowers the vapor pressure of crude oil, making it less volatile and therefore safer to transport by pipeline or rail tank car.

—Russell Gold contributed to this article.

Sacramento oil train fire risks mounting, first responder scenarios, “Did Benicia downplay risks?”

Repost from The Modesto Bee
[Editor: Significant quote: “Valero Refining Co. is pushing to run other daily crude oil trains starting next year on another rail line in Sacramento, next to the passenger platforms at the downtown Sacramento, West Sacramento and Davis Amtrak stations….Unlike a flood or wildland fire, there would be no early warning for evacuations.  ‘The first thing you will hear are crunches,’ said state Fire and Rescue Chief Kim Zagaris. ‘Then explosions. The 911 lines will light up like no one’s businesses.’”  – RS]

Chances of a crude oil train fire are low but mounting in Sacramento

By Tony Bizjak, August 9, 2014

In the middle of the night a year ago, a runaway train laden with crude oil derailed in a Canadian town, igniting a firestorm that killed 47 people, some of them asleep in bed, vaporized buildings for blocks, and awakened rail cities like Sacramento across the continent to a new fear: Could that happen here?

Although trains have long ferried hazardous materials, including crude oil and other potentially lethal products such as chlorine and ammonia, the amount of flammable crude oil now shipped by rail is unprecedented, and growing fast.

A string of recent derailments and explosions, some requiring evacuations, have prompted federal transportation officials to call for new safety measures, including stronger tanker cars and slower speeds for trains carrying a particularly volatile form of crude oil from the suddenly booming Bakken fields of North Dakota.

Bakken crude trains have been rolling through Canada and the Eastern United States for several years. In California, the crude oil by rail trend is just starting. Oil companies here are planning to receive up to 23 percent of their oil via rail shipments by 2016. Two years ago, only one-third of 1 percent of oil arrived at California refineries on trains.

As rail traffic has increased, the number of crude oil spills involving railroads in California has risen as well. California registered four rail-related crude spills or leaks between 2010 and 2012, according to the state database on hazardous-materials spills. The number jumped last year to 17. Twenty-six have been reported in the first half of this year.

The state saw 139 freight train derailments last year, up from 62 in 2010.

The vast majority of those incidents were considered minor. Most happened in railyards. One derailment caused a fire as a result of an alcohol spill. But Kelly Huston, deputy director of the state Office of Emergency Services, said cities, states and fire officials must make plans with the understanding that a bad incident could be just around the corner.

“It’s a simple matter of odds,” he said. “With more of these trains coming across, it is more likely there is going to be an incident. The magnitude – a small spill or a catastrophic event – is the uncertainty.”

What are those odds in the Sacramento region, which serves as a major rail crossroads and stop-over site?

Interviews and a review of state rail data suggest the likelihood is low but mounting.

Sacramento has experienced no spills in recent years, but fire officials are concerned. A Bakken train now traverses Sacramento to the Bay Area a few times a month. Another oil train regularly pulls into McClellan Business Park, where the oil is transferred to tanker trucks to the Bay Area. Next year, two more crude oil trains are expected to roll through Sacramento daily on their way to the Bay Area, possibly carrying Bakken. More could follow.

‘911 lines will light up’

Canadian officials are expected next week to announce the results of their investigation into what went wrong that July night in Lac-Megantic, a town of 6,000 just north of the Maine border. The Lac-Megantic train was pulling 72 oil tank cars, 63 of which derailed.

BNSF Railway won’t say how many oil tank cars its trains are pulling through Sacramento each month, but such trains typically haul 100 oil cars. Those trains come through the Feather River Canyon. They run alongside north Sacramento neighborhoods, past the Blue Diamond plant, the Spaghetti Factory restaurant in midtown, several light-rail stops, Sacramento City College and Luther Burbank High School, and exit toward Stockton after crossing Meadowview Road at street level.

Valero Refining Co. is pushing to run other daily crude oil trains starting next year on another rail line in Sacramento, next to the passenger platforms at the downtown Sacramento, West Sacramento and Davis Amtrak stations.

Unlike a flood or wildland fire, there would be no early warning for evacuations.

“The first thing you will hear are crunches,” said state Fire and Rescue Chief Kim Zagaris. “Then explosions. The 911 lines will light up like no one’s businesses.”

Fire chiefs say they have pondered the possibility of a Lac-Megantic incident, and concluded that while their firefighters are well-trained, a big crude oil fire with dozens of tanker cars strewn across streets would be something new, and a major challenge. They describe a possible scenario:

The first-responders could find buildings on fire next to the tracks, forcing them to set a fire line away from the derailment, sacrificing the nearest structures. Police would go door to door within a half-mile or perhaps a mile, ordering evacuations. City, county and state officials would staff a command center, miles from the fire. Hospitals would be put on alert. Gyms could become evacuation centers.

Oil from ruptured tank cars could flow into sewers, creating a possibility that firefighters dread, and that some veteran firefighters remember well. In 1991, a tanker truck overturned on Fair Oaks Boulevard in Carmichael, spewing gasoline into the sewer system. It caught fire and blew manhole covers a dozen feet in the air as flames shot out of the ground. Houses caught on fire. Three hundred people were evacuated, but no one was seriously injured.

Two years ago, a small fire in a single propane rail tank car prompted the evacuation of nearly 5,000 homes in the city of Lincoln in Placer County. Oil and gas fire experts were flown in from Texas. They pumped water into the tank to repressurize it as the propane slowly burned. More than 100 firefighters from agencies around the region were positioned a mile away, ready to roll in case the tank car exploded. It took 40 hours for the fire to burn out. Fire officials said they felt lucky.

Crews at a train derailment fire scene may try to pull unexploded tank cars that haven’t derailed away from the fire, or pour water on them to keep them from rupturing. But if firefighters hear a pinging sound from a tanker, or if they notice a tanker starting to discolor, the federal emergency guidebook they carry in their trucks tells them bluntly: “Withdraw immediately.”

Fire officials say they might not have enough foam stored locally to douse a major oil fire. They would put out the call across the north state, including to airports, for foam, West Sacramento Fire Chief Rick Martinez said. “Figure out a way to get that stuff here, in real time, get it here, anyway you can.”

Did Benicia downplay risk?

In Lac-Megantic, evacuated residents stood on the hills to watch the conflagration below. Reports say it took more than 12 hours to put down the fire. A year later, the town is rebuilding, but large swaths of downtown remain empty, the soil polluted by oil. News reports on the one-year anniversary included stories of survivors who suffer post-traumatic stress disorder. Canadian transportation officials will arrive next week to announce their findings on the incident. The mayor, meanwhile, is pushing for a railroad bypass.

A few weeks ago, on the one-year anniversary of the Canadian disaster, protesters hit the streets in Sacramento and cities across the continent, carrying photos of fireballs and posters saying “Stop the Bomb Trains!”

Railroad officials counter by saying the dangers of crude oil fires are limited, and that they have been working for years to make rail transport safer. According to the Association of American Railroads, 99.9977 percent of the hundreds of hazardous-material rail shipments daily arrive at their destination without mishap. Several rail experts noted the Lac-Megantic event is something unlikely to be replicated: The train was parked on a hill over town. It had suffered a minor fire earlier in the night that might have damaged the brakes. No one was on the train when it started to roll.

The author of “Train Wreck: The Forensics of Rail Disasters,” a book about lethal train crashes, suggests people should worry more about the vehicle sitting in their driveway.

“Society understands and accepts the risk of driving a car, and that is far more hazardous than a train falling on you,” said George Bibel, a University of North Dakota professor.

Sacramento City Councilman Steve Cohn doesn’t think Sacramentans who live near the tracks should live in dread, but said he understands the unease. “People are right to be concerned and want to know what the facts are. We’d be foolhardy not to take it seriously.”

Benicia recently completed its analysis of the spill risk from two planned 50-car daily oil trains between Roseville and Benicia, and came up with a controversial conclusion. It determined that an oil spill could be expected to happen once ever 111 years. Based on that analysis, Benicia concluded the project does not pose a significant hazard in cities along the rail line.

The report’s author, Christopher Barkan of the University of Illinois, an expert on hazardous rail transport, formerly worked for the railroads’ national advocacy group and does research supported by the organization. He said his analysis was not affected by that affiliation. He declined further comment.

Steve Hampton, an economist with the state Office of Spill Prevention and Response, said the Benicia report gives a false air of certainty about something that has far too many unknowns. “This is so new, anyone who says they know exactly what the rate is, they don’t.”

He noted the analysis failed to look at risks the project poses on the rail route east of Roseville, where trains will pass through areas designated by the state as “high-hazard” for derailments.

Jeff Mount, a natural resource management expert at Public Policy Institute of California, said a one-in-111-year spill event for the Valero trains refers to long-range averages. It doesn’t preclude a spill from happening at any time. If several oil trains come through Sacramento, as expected, the spill risks increase, Mount said.

Safety costs vs. benefits

So how do local officials prepare? And how much do you spend to safeguard against an event with an arguably low likelihood of occurrence but potentially huge consequences?

Similar assessments already have been done of flood and earthquake risks. California requires urban levees to be sufficient to handle one-in-200-year storms, prompting billions of dollars in spending for construction and ongoing maintenance. Officials have spent tens of billions of dollars on seismic upgrades to bridges and overpasses in Northern California to guard against earthquakes like the 1989 Loma Prieta event, which has a 67 percent chance of recurrence in the next 30 years, according to federal estimates.

Risk experts say floods and earthquakes are considerably more likely to cause widespread damage than an oil spill and fire, even one as major as in Lac-Megantic. Bibel, the North Dakota professor, said risks can never be brought to zero. At some point, safety costs outweigh benefits.

On the federal level, transportation officials have proposed requiring railroad companies to replace the current fleet of tanker cars with sturdier versions that have more safety measures. The government also is proposing lower speed limits for trains carrying Bakken crude, and new safety technology on trains, such as more advanced operating systems. There is a push to force mining companies to install more sophisticated equipment at well heads to reduce the volatility of Bakken before it is placed into rail cars.

In California, spill-prevention officials have launched discussions with railroads, oil companies and emergency officials to determine what a “reasonable worst case spill” into a waterway might look like, and how to plan for it. As a starting point, those officials last month suggested a reasonable worst case could be 20 tank cars of crude oil spilling from one train.

Regional leaders in Sacramento have called on Benicia to redo its analysis of the risk posed by crude oil trains traveling to the Valero refinery, and to assess the impact of an explosive derailment.

But even within the region, views are mixed on how much risk management is appropriate. Yolo County Supervisor Duane Chamberlain runs a farm and uses diesel fuel daily. He said he cringes when government regulations drive up prices. “How much can you protect everybody and everything?” he asked. “We shouldn’t make it harder for oil companies to do business in our state.”

In the Feather River Canyon, where in recent years boulders have punctured and derailed trains, Plumas County Supervisor Kevin Goss said a derailment could be catastrophic for the river, which helps feed faucets in Sacramento. He said he has taken calls from worried residents and has gone out to see the milelong oil trains that have begun snaking along the mountainside.

“I couldn’t believe how many oil cars were on this one train,” he said.

LOCAL OP-ED – Craig Snider: Three reasons to oppose crude by rail

Repost from The Benicia Herald

3 reasons to oppose crude by rail

by Craig Snider, August 9, 2014

WHEN MY FAMILY MOVED TO BENICIA IN 2003, we spent our first week in the Best Western on East Second Street. During our stay we met several workers visiting from refineries in Texas to assist with projects at local refineries. During breakfast, I mentioned to one of them that we had bought a house in Benicia and were waiting to move in. He replied, “I wouldn’t have my family living within five miles of a refinery,” implying that it was unsafe because of the risk of an accident.

We had already purchased our home and were pleased with the location of the town, the high-quality schools, the quaint downtown and the local arts community. At the time, I judged that the prevailing wind direction and rolling hills would likely buffer our home from the effects of any serious accident, such as the recent Chevron fire in Richmond, and that the many Benicia amenities outweighed any risk the refinery posed.

Now we are faced with the prospect of 100 tank cars of crude oil being hauled into Benicia every day. Valero insists this would be safe and warns that without a new facility to offload the crude oil, local jobs, company profits and charitable contributions would be at risk.

I have no doubt that, if necessary, crude oil could be transported by rail to various parts of the country safely and efficiently. We have the technological and engineering expertise to do amazing things these days, and such expertise could readily be applied to the crude oil transport business.

Some in our community scoff at the risk posed by crude by rail (it’s comforting to some that the Quebec derailment that killed 47 people and the many accidents that have since occurred were caused by human error and could have been prevented). Others are horrified at the thought of a similar accident here or elsewhere. They highlight the fact that this crude oil is more volatile and toxic than other types, that an accident here would wreak havoc on our lives, and they want to stop the Valero Crude-by-Rail Project in its tracks.

As I see it, there are three major reasons to oppose the project at this time.

First, simply put, hauling 100 tank car loads of volatile Bakken crude or toxic Canadian tar sands crude raises the risk of an accident relative to the status quo. Benicians already live in the shadow of a refinery; is it really necessary or desirable to add to this risk to satisfy Valero?

Second, rules governing high-hazard flammable trains need to be thoroughly vetted and approved before the Valero proposal can be approved. Between March 2013 and May 2014, there were 12 significant oil train derailments in the United States and Canada, including the Quebec accident. Crude by rail arriving in California was up 506 percent, to 6.3 million barrels, just last year. In fact, more crude oil was transported by rail in North America in 2013 than in the previous five years combined. Yet it wasn’t until the first of this month that regulations were proposed for dealing with this unprecedented increase in “High-Hazard Flammable Trains” (see Federal Register, Aug. 1, 2014, pg. 45,016).

Apparently the Pipeline and Hazardous Materials Safety Administration (part of the U.S. Department of Transportation) expects to issue new regulations governing crude by rail sometime after a 60-day comment period that ends Sept. 30. Oddly, their federal notice includes a brief two-page “environmental assessment” that concludes there will be no significant environmental impacts associated with their proposals. Apparently we are to trust the railroad industry and their minders to do the right thing after they have steadfastly refused to institute train safety mechanisms, such as “Positive Train Control,” that would have saved 288 lives, prevented 6,500 injuries and 139 crashes in the past 45 years. At a minimum, the rules governing high-hazard flammable trains should be subject to a full environmental impact statement as provided by the National Environmental Policy Act.

Such an environmental impact statement might determine that crude-by-rail terminals should be located a minimum distance from residential areas and that crude-carrying trains travelling through metropolitan areas be guided by automated systems that monitor speed, location and rail traffic, so that the potential for human error would be substantially reduced. Such systems currently exist, but have been largely ignored by the railroad companies. These measures need to be studied and decided upon before the Valero proposal is approved.

Finally, what’s the rush? Many would argue that fossil fuel use needs to be curtailed because of greenhouse gas emissions and the environmental havoc caused by ever-more-destructive means of obtaining oil (fracking, tar sands, etc.). Approving the Valero project gives tacit approval to these means, allowing our community to profit at the expense of other people and places. Maybe it’s time to just say no.

Craig Snider is a Benicia resident. He recently retired from the U.S. Forest Service, where he was regional environmental coordinator for the national forests in California from 2003-14.

Regulators Ignore One Proven Way to Eliminate Bakken Bomb Trains: Oil Stabilization

Repost from DeSmogBlog

Regulators Ignore One Proven Way to Eliminate Bakken Bomb Trains: Oil Stabilization

Justin Mikulka, 2014-08-08

On the same day that the Obama administration released long-awaited new safety regulations for the oil-by-rail industry, the Pipeline and Hazardous Materials Safety Administration (PHMSA) released another report with their testing results for Bakken crude oil. The conclusion reached by PHMSA is that Bakken crude oil “is more volatile than most other types of crude.”

These results don’t come as a surprise since the five oil trains that have crashed and exploded in the last year all were carrying Bakken crude.

Of course, the new regulations released simultaneously do not require the oil industry to do the one thing that would eliminate this problem: oil stabilization.  A well known and proven method for removing the natural gas liquids from crude oil that makes the oil “stable” and non-explosive.

While the new regulations do not offer any proposals to require the oil industry to remove the volatile components of Bakken crude, on page 144 of the proposal they do acknowledge that this is possible. They request comments on the following question:

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?

Essentially they are acknowledging that if the industry stabilized the oil it wouldn’t be explosive and thus they would be able to continue to use the existing DOT-111 rail cars to transport it. Just like those tank cars will be able to transport Alberta tar sands oil because it is not explosive.

The week before the release of the new regulations, the American Petroleum Institute and the American Association of Railroads released a joint statement stating that they were in agreement on two things that shouldn’t be part of the finalized new regulations — lower train speeds and mandatory stabilization. And while the proposed regulations do offer some requirements for lower trains speeds, they include nothing about mandatory stabilization.

In May, Myron Goforth, the president of Dew Point Control LLC, a manufacturer of stabilization equipment put the situation in simple terms for Reuters.

“It’s very easy to stabilize the crude – it just takes money,” Goforth said. “The producer doesn’t want to pay for it if he can ship it without doing it.”

So without regulations to require the stabilization of Bakken crude, the public will be put at risk so that the oil companies can make higher profits. And with the new proposed regulations, the regulators have made it clear they will not stand in the way of Big Oil to keep the people safe.

The good news for the public is that Big Oil’s greed might actually lead to them having to stabilize Bakken crude.

There is currently a major lobbying effort by the oil industry to lift the ban on exporting American crude oil. And in order to ship the oil to other countries, the oil companies may be required to stabilize the Bakken crude. One industry analyst recently commented to Platts on what would happen if stabilization was required for export.

“You could stabilize and go. You’d still have to put it into rail cars and ship it to the coast, but at least you’d be selling it at a global market price instead of at the WTI discount. Who wouldn’t do that? Everybody would do it.”

It isn’t like the regulators weren’t aware of this possibility before they put out the new proposed regulations for oil by rail. In the many private meetings held at the Office of Information and Regulatory Affairs (OIRA) prior to the release of the regulations, one company stood out from the oil and rail companies making up the majority of the meetings: Quantum Energy Ltd.

On June 2nd Quantum Energy met with OIRA and presented a simple three-page presentation. The presentation explains how regular crude oil has a Reid Vapor Pressure (RVP) of 5-7 psi and Bakken crude has an RVP between 8-16 psi. To put that in perspective, gasoline typically has a RVP of 9 psi.

Higher RVP correlates to higher volatility and explosiveness.

The last slide in the Quantum presentation shows that “post stabilization” Bakken crude would have a RVP of 1.5 – 6 psi.

So why was an energy company arguing the case for stabilization to OIRA prior to the new regulations? Because they are in the stabilization business and they are getting ready for the export ban to be lifted.

Russell Smith, executive vice president for Quantum, explained their position to Platt’s prior to the release of the new regulations.

“We’re not advocating if they do or if they don’t [require stabilization]. Quite frankly, we don’t care. Our business plan is centered around exportability.”

It appears that the safety of the people located within the blast zones of the bomb trains will not ultimately be addressed by regulators until the oil can be shipped to other countries, at which point they will require the oil to be stabilized to reduce the risk of explosions.

As the analyst said, “Who wouldn’t do that? Everybody would do it.”

Image credit: Lac-Megantic deadly oil-by-rail disaster, via Shutterstock.