Category Archives: Crude By Rail

Bakken Crude, Crude By Rail, Derailment, Fire, Mosier OR, Oil spill, Public Safety, Rail infrastructure, Rail inspection, Risk Assessment, State regulation, Water contamination

NPR: In The Pacific Northwest, Oil Train Derailment Highlights Potential Dangers

Heard on All Things Considered
By Conrad Wilson, August 12, 2016 4:31 PM ET

The number of trains carrying oil along the Columbia River between Oregon and Washington could dramatically increase.

There’s a plan to ship more oil from the Bakken region of North Dakota to a proposed oil terminal in southwest Washington state.

An oil train derailment earlier this year has shown the potential danger faced by the region.

TRANSCRIPT________________________________________________

AUDIE CORNISH, HOST:

In the Northwest, the number of trains carrying oil along the Columbia River could dramatically increase, and that’s sharpened a debate over oil train safety in Washington state and Oregon. There’s a plan to ship more oil from the Bakken region to a proposed oil terminal in Washington. As Conrad Wilson of Oregon Public Broadcasting reports, a recent derailment has shown the potential danger the area faces.

CONRAD WILSON, BYLINE: On a Friday in early June, more than 40,000 gallons of Bakken crude spilled in a fiery oil train derailment that burned for 14 hours.

EMILY REED: It is an incredibly scary thing to have something like this happen so – and within our city limits, so close to our school.

WILSON: Emily Reed is the city council president in Mosier, Ore., the town where the derailment took place. About 500 people live in Mosier, and 100 of them were forced to evacuate when the oil train derailed. Reed points out the town’s deep in the Columbia River Gorge, a canyon with steep cliffs, where winds can reach 40 miles per hour during the summer.

REED: If the wind had been as it is today or more, we would have had a fire going up more than four of those cars, all the way through town and wiping out our town.

WILSON: Union Pacific was to blame for the derailment that caused the oil spill, according to a preliminary report by the Federal Railroad Administration. It says Union Pacific didn’t maintain its tracks properly. However, an inspector certified by that same federal agency checked the tracks and gave them the OK a little more than a month before the derailment.

JERRY OLIVER: It was unfortunate for the community.

WILSON: Jerry Oliver is a port commissioner in Vancouver, Wash., and a vocal supporter of what would be the largest oil-by-rail terminal in the country, known as the Vancouver Energy Project.

OLIVER: It’s also unfortunate because it gives a tremendous black eye to anything related to fossil fuels.

WILSON: If built, the terminal would more than double the number of mile-long oil trains traveling along the Columbia River, to about 46 trains per week. Serena Larkin is with the Sightline Institute, a Seattle-based think tank that opposes the oil terminal. She says until Mosier, oil train derailments were the kind of thing that happened somewhere else.

SERENA LARKIN: Mosier proved that we’re not any different. We are just as vulnerable. We are facing the exact same risks from oil trains that everyone else in North America is facing right now.

WILSON: Despite low oil prices, proponents of the project say the terminal is needed to reduce foreign imports and move domestic oil. For now, it’s relying on oil trains because there aren’t enough pipelines to move oil from North Dakota to the West Coast. Larkin says Mosier’s a turning point in the debate surrounding the Vancouver oil terminal and one that will weigh heavily on whether the project gets permitted.

LARKIN: It showed what the Vancouver oil terminal is really asking Northwest communities to shoulder in risk.

DAN RILEY: I strongly believe that all accidents are preventable.

WILSON: Dan Riley is vice president of government affairs for Tesoro, an oil company behind the project. Since the derailment in Mosier, he says there has been more scrutiny.

RILEY: I think that the criticism is not of the project, but of the rail system.

WILSON: Reilly says Tesoro has also pledged to only allow tank cars with thicker shells and other safety features designed to withstand a derailment into the Vancouver facility. But that’s done little to ease the safety concerns of firefighters and environmental groups. Ultimately, Washington Gov. Jay Inslee has the final say on whether the project gets approved. That decision could come later this year. Inslee’s acknowledged the risk oil trains pose. He says the Mosier derailment is among the things he’ll consider when determining whether or not he’ll permit the oil terminal. For NPR News, I’m Conrad Wilson in Vancouver, Wash.

Bakken Crude, Crude By Rail, Dakota Access, Oil producers, Oil refineries, Pipeline infrastructure, Pipeline transport

Dakota Access pipeline to upend oil delivery in U.S. – Losers to include struggling oil-by-rail industry

Repost from Reuters

Big Dakota pipeline to upend oil delivery in U.S.

By Catherine Ngai and Liz Hampton | NEW YORK/HOUSTON, Aug 12, 2016 12:46pm EDT
Dead sunflowers stand in a field near dormant oil drilling rigs which have been stacked in Dickinson, North Dakota January 21, 2016. REUTERS/Andrew Cullen
Dead sunflowers stand in a field near dormant oil drilling rigs which have been stacked in Dickinson, North Dakota January 21, 2016. REUTERS/Andrew Cullen

It may seem odd that the opening of one pipeline crossing through four U.S. Midwest states could upend the movement of oil throughout the country, but the Dakota Access line may do just that.

At the moment, crude oil moving out of North Dakota’s prolific Bakken shale to “refinery row” in the U.S. Gulf must travel a circuitous route through the Rocky Mountains or the Midwest and into Oklahoma, before heading south to the Gulf of Mexico.

The 450,000 barrel-per-day Dakota Access line, when it opens in the fourth quarter, will change that by providing U.S. Gulf refiners another option for crude supply.

Gulf Coast refiners and North Dakota oil producers will reap the benefits. Losers will include the struggling oil-by-rail industry which now brings crude to the coasts.

The pipeline also will create headaches for East and West Coast refiners, which serve the most heavily populated parts of the United States and consume a combined 4.1 million barrels of crude daily. They will have to rely more on foreign imports.

The pipeline, currently under construction, will connect western North Dakota to the Energy Transfer Crude Oil Pipeline Project (ETCOP) in Patoka, Illinois. From there, it will connect to the Nederland and Port Arthur, Texas, area, where refiners including Valero Energy, Total and Motiva Enterprises operate some of the largest U.S. refining facilities.

“That’s a better and cheaper path than going out West and down through the Rockies,” said Bernadette Johnson, managing partner at Ponderosa Advisors LLC, an energy advisory based in Denver.

CHEAPER THAN RAIL

Moving crude by pipeline is generally cheaper than using railcars. The flagging U.S. crude-by-rail industry already is moving only half as much oil as it did two years ago: volumes peaked at 944,000 bpd in October 2014, but were around just 400,000 bpd in May, according to the U.S. Energy Department.

Rail transport has become less economical for East and West Coast refiners when compared with importing Brent crude, the foreign benchmark, because declining supply out of North Dakota made that grade of oil less affordable.

“If you look at the Brent to Bakken arb, it’s tight,” said Afolabi Ogunnaike, a senior refining analyst at Wood Mackenzie in Houston. “If you look at the spot rate, it’s uneconomical to move crude by rail right now.”

Ponderosa Advisors estimated that the start-up of the pipeline could reroute an additional 150,000 to 200,000 bpd currently carried by rail to the U.S. East Coast and Gulf Coast.

Crude imports into the East Coast are now on the rise, averaging 788,000 bpd this year, with nearly 960,000 bpd in July, the highest level in three years, according to Thomson Reuters data.

On the West Coast, refiners like Shell, Tesoro and BP may have to commit to some railed volumes for longer because of shipping constraints, although it will largely depend on rail economics. They also face declining output from California and Alaska.

Tesoro’s top executive Gregory Goff told analysts and investors last week he expects rail costs to drop as much as 40 percent from the current $9-to-$10 barrel cost to compete with pipelines, in order to move Bakken to its Anacortes, Washington, refinery.

CHANGING TIDES

Rail companies have been trying to adapt. CSX Corp, which runs a network of lines in the eastern part of the country, said it was evaluating potential impacts of the pipeline. BNSF Railway declined to discuss future freight movements, but said that at its peak, it transported as many as 12 trains daily filled with crude, primarily from the Bakken. Today, it is moving less than half of that.

In a recent earnings call, midstream player Crestwood Equity Partners said it was working to capitalize on the pipeline and not be dependent on loading crude barrels onto trains. That includes building an interconnection to its 160,000 barrel-per-day COLT crude rail facility in North Dakota.

As refiners bring in more barrels from overseas, Brent’s premium over U.S. crude will eventually widen. On Thursday, December Brent futures settled at a 97-cent premium to U.S. crude, one of its widest premiums this year.

Separately, Bakken crude, a light barrel, could rise further due to the additional competition, especially as production is still falling. Bakken differentials hit a six-month low earlier this week of $2.65 a barrel below WTI, according to Reuters data, but rose to a $1.80 a barrel discount by Thursday.

(Reporting by Catherine Ngai in New York and Liz Hampton in Houston; Editing by David Gregorio)
Crude By Rail, Export of North American crude, Fossil fuels, Local Regulation

Emergency Moratorium Stops All Unrefined Oil, Coal, and LNG Export Infrastructure Projects in Whatcom County, WA

Repost from the Bellingham Herald
[Editor: Here is the Whatcom County ordinance.  See also Eddie Scher’s statement from STAND.  – RS]

Whatcom County puts new unrefined fossil fuel exports on hold

By Samantha Wohlfeil, August 10, 2016
[NOTE from your Benicia Independent Editor: The Bellingham Herald story inserts a video here, which amounts to a 2-minute public relations piece for BP Cherry Point with no apparent relation to the story about Whatcom County’s August 9 emergency action. Regardless, the video is an interesting look at an industry attempt at reassuring the public that oil trains are safe. I am choosing NOT to embed this commercial video here. View it at the Bellingham Herald.]

BELLINGHAM  >  No new applications to ship unrefined fossil fuel through Cherry Point can be approved for at least the next two months after Whatcom County Council passed an emergency moratorium Tuesday night, Aug. 9.

The council unanimously passed the moratorium to address concerns about potential public health and safety risks that could come with the increased transportation of unrefined fossil fuels, such as crude oil traveling by rail through the county to two refineries at Cherry Point.

The moratorium does not impact the current refining and shipment of products through the BP Cherry Point and Phillips 66 refineries.

In July, the council directed the Planning Commission to study changes to the county’s 20-year Comprehensive Plan that could prevent any future export of unrefined fossil fuels from Cherry Point.

The council gave the commission until January to take testimony, study the issue, and make a recommendation on whether the changes should be made.

Until Tuesday night, the question of whether new applications for exports might be submitted in the meantime, in order to get ahead of any ban, was still up in the air.

In December 2015, Congress lifted a 40-year ban on exporting domestic crude oil to other countries. That created a concern for some that local refineries could shift to shipping unrefined materials abroad, eliminating local refinery jobs.

Effective immediately, the emergency moratorium prohibits the filing and acceptance of applications for county permits for new or expanded facilities that would facilitate the increased shipment of unrefined fossil fuels out of Cherry Point.

It defines unrefined fossil fuels as including, but not limited to, “all forms of crude oil whether stabilized or not; raw bitumen, diluted bitumen, or syncrude; coal; methane, propane, butane and other ‘natural gas’ in liquid or gaseous formats; and condensate.”

Environmental groups lauded the council’s move.

“It shows bold leadership that protects our community and responds to concerns that have been expressed by thousands of people throughout this process about the dangerous risks that coal, crude oil and natural gas exports pose to public health and safety in Whatcom County,” said Matt Petryni, clean energy program manager for RE Sources for Sustainable Communities. RE Sources was one of several environmental organizations rallying people to comment on the proposed unrefined fossil fuel export ban.

Alex Ramel, field director for Stand’s Extreme Oil Campaign, said the moratorium showed Whatcom County was ahead of the curve in policy making.

“This is nation-leading and proactive that the council acted to protect the community from unrefined fossil fuel transport,” Ramel said.

Council members specifically wanted to ensure the moratorium and its wording recognize the positive impact existing industry and the refineries have on the community.

“I find the moratorium helpful. I particularly find it helpful because of the discussion that differentiates between raw materials like crude oil and finished products,” said Steve Garey, a former refinery worker and union president who represented workers at the refineries in Anacortes.

Earlier in the evening, when the council was taking public comment on the rest of the Comprehensive Plan update, Garey told the council that when refineries are converted into exporting facilities, most of the workers lose their jobs.

“It’s important to recognize that refineries need to move finished products, but none of us would be served if they were to shut those plants down and export crude oil,” Garey said in an interview after the moratorium was passed.

The council must hold a public hearing on the emergency moratorium within 60 days. After that, an interim emergency moratorium could be put in place for up to six months, which would allow enough time for the Planning Commission to make its recommendation in January, council member Carl Weimer said. Weimer is the member who first proposed the changes.

“That was key,” Weimer said. “I was scratching my head about whether I was going to support the whole comp plan because I felt we should support the Cherry Point amendments, but I’m fine with passing it while we have this protection in place.”

Brad Owens, president of the Northwest Jobs Alliance, said the moratorium was premature.

“The public deserves their due process through the Planning Commission, and pending the outcome of the Planning Commission’s evaluation, the council should respond accordingly,” Owens said.

The moratorium states that under the Washington State Constitution, the county has authority to provide regulation of land uses within the county.

The council also “recognizes the limits to its authority over transportation of certain goods imposed by federal statutes and the U.S. Constitution, and finds that this action is within its authority.”

If any part of the moratorium is found to be unconstitutional or invalid by a court, the rest of it will remain in effect, the ordinance states.

This story was updated at 10:05 a.m. Wednesday, Aug. 10, 2016.
Bakken Crude, Bridge inspection, Bridge safety, Crude By Rail, Derailment, Mosier OR, Oil spill, Oil trains, Take Action

Petition: Ban Oil Trains For Good

Repost from Huffington Post

Ban Oil Trains For Good

By Marc Yaggi, Executive Director, Waterkeeper Alliance, 08/11/2016 03:30 pm ET
2016-08-08-1470664391-409844-13308293_10154299311634165_7880276907808028024_o.jpg
Oil train derailment in Mosier, Oregon in June 2016. Photo credit: Columbia Riverkeeper

Just a little over two months ago, a disastrous oil train derailment occurred in Mosier, Oregon, spilling 47,000 gallons of Bakken crude oil from North Dakota. The fallout from that accident has seen the entire region debating whether transporting this hazardous crude oil by rail through local communities and along our nation’s rivers is worth the risk. It’s time for the debate to close, and for all sides to realize the hard truth: oil trains like the one that derailed in Mosier pose an immediate threat to communities around the country, and it is time we demand immediate action.

Waterkeeper Alliance’s report, Deadly Crossing: Neglected Bridges & Exploding Oil Trains, written in partnership with STAND and Hudson Riverkeeper, showed that many of the bridges these oil trains pass over show signs of neglect and disrepair. The report also highlighted that the public cannot access any meaningful information regarding the safety of rail bridges in their community. In response to these concerns, the Federal Railroad Administration (FRA) now has a way for local officials to request public bridge inspections. This is a small victory, but the threat of these oil trains still lingers in communities across the country, and the only true solution is to ban these trains altogether.

No community wants a potentially lethal oil train speeding past their schools, behind their homes, or near their precious water sources. We need to stand together to demand a complete ban on oil trains. Please join this petition to call on the Department of Transportation to recognize that oil trains are inherently unsafe for our communities and waterways, and to use all available authority to stop oil train traffic throughout the country.