Category Archives: DOT-111

Bakken Crude, Crude By Rail, DOT-111, Export of North American crude, Oil stabilization, Reid vapor pressure levels, Tar sands crude, Train speed, Volatile gases

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.

 

Bakken Crude, Crude By Rail, DOT-111, Oil prices, Tar sands crude, Volatile gases

LOCAL OP-ED – Jerome Page: The triumph of human ingenuity

Repost from The Benicia Herald

Jerome Page: The triumph of human ingenuity

August 8, 2014 by Jerome Page

TIME TO TAKE A CLOSE LOOK AT OUR STARTLING SUCCESS in solving our energy problems with oil — good old American Bakken crude along with a hefty swash of that Canadian tar sands crude. Canada being a very friendly neighbor, this seems a great deal on both sides of the border. And thanks to a fine railroad system, it’s just a simple straight shot from North Dakota and Alberta right up to our door here in Benicia, California! Providence be blessed!

And yet there are, as always, folks who not only want to examine that gift horse’s teeth but can be just plain ungracious — if not downright surly and disagreeable — about it. What could possibly be wrong with cheaper oil in copious quantities, without ever having to deal with folks who don’t even speak English?

But enough. I’ll step out of the Joe Schmoe character and comment just a bit on that question of what can, in fact, possibly be wrong.

From an Earth Island Journal clipping (June 29, 2014), a piece by Adam Federman, we read: “Since the Lac-Mégantic disaster (with its 47 dead) there has been a string of oil train collisions and derailments. Late on the night of November 7, a train carrying at least 2.7 million gallons of Bakken crude derailed near Aliceville, Alabama, resulting in dramatic explosions similar to those seen in Lac-Mégantic. Because the train exploded a few miles outside of Aliceville, no one was injured or killed. On December 30, a train carrying crude collided with another train outside of Casselton, North Dakota, releasing more than 400,000 gallons of oil into the surrounding land. At least half the town’s 2,400 residents were evacuated, though no one was injured. And on April 30, an oil train operated by CSX derailed in the city of Lynchburg, Virginia, sending flames and oil into the James River and forcing the evacuation of more than 300 residents. Last year more oil spilled in rail accidents — 1.15 million gallons — than the previous 35 years combined.” (Italics mine)

Then the following:

“Extra-flammable Bakken crude riskier to ship by rail than other oil, U.S. safety watchdog warns,” by Jeff Lewis, Jan. 2, 2014:

“CALGARY — U.S. authorities said Thursday crude oil shipped by rail from the Bakken shale in North Dakota across the United States and Canada ‘may be more flammable’ than other types of oil, as the latest in a string of explosive accidents focuses attention on the booming oil-by-rail trade.”

How about we ditch that “may be”! For example, another read on Casselton:

“‘There was a huge fireball’: Train carrying crude oil explodes after derailing in North Dakota,” by Dave Kolpack, Associated Press, Dec. 30, 2013:

“A train carrying crude oil from North Dakota’s oil patch derailed Monday near the small town of Casselton, setting off a series of fiery explosions. No injuries were initially reported, but officials were warning residents to stay indoors as the situation unfolded. Cass County Sheriff’s Sgt. Tara Morris says as many as 300 residents of Casselton may be evacuated.

“Morris estimates about 10 cars from a mile-long train caught fire and will have to burn out. She said it could take up to 12 hours before authorities can get close.

Next, “How crude-by-rail accidents may impact the U.S. oil market,” Reuters, Jan. 23, 2014:

“A spate of high-profile crude-by-rail accidents is making oil analysts consider how tighter rail safety standards could impact U.S. oil markets, by potentially crimping a mode of transport that has grown exponentially amid the shale drilling boom.

“Any regulation or industry-driven move to hastily sideline a fleet of some 75,000 older tank cars commonly used for shipping crude could roil U.S. oil logistics, boost costs for refiners, and even hit output from North Dakota’s giant Bakken field, oil analysts said.

“The scenario that many view as more likely — where older rail cars could be gradually retrofitted or retired — would be less disruptive but still raise transportation costs.” (And, of course, forestall greater dangers, but what the hell, what’s life without a little spice!)

“Tank cars known as DOT-111s are used to transport most of the 10 percent of U.S. oil production, or around 800,000 barrels per day, that is shipped by railroad. The cargoes have surged over the past half decade, offering drillers in fast-growing shale plays like the Bakken a quick and flexible way to send barrels to consumer markets without relying on limited regional pipelines.

“DOT-111 rail cars built before 2011, which have been involved in several accidents, are under scrutiny for safety issues that make them more likely to puncture in a derailment.

“Over the weekend, a train carrying North Dakota crude derailed in Philadelphia, although there was no fire or injuries.

“‘I view this as a potentially hugely significant rail risk,’ said Credit Suisse’s Jan Stuart, referring to how new crude-by-rail safety measures could impact Bakken-region oil logistics or production.” (That risk of course is financial, and when you’re talking financial risk, man you have an audience; human risk, risk to life and limb — not so much!)

“So far, the Department of Transportation has set a schedule for next year to draft new regulations, including updated tank car specifications, but it is facing pressure to move faster.

“‘Regulators have endorsed the new safety standards for newly built cars, but so far have not required any retrofitting,’ said Sandy Fielden of the RBN Energy consultancy in Austin. ‘If the existing fleet of older cars were to need retrofitting, it would be very disruptive.’”

And why in hell would we be wanting to do anything “disruptive” when the money is rolling in so beautifully! Is it that hard for people to focus on the crucial bottom line?!

“In the fast-growing Bakken, where pipeline capacity has not kept up with oil production, more than 70 percent of output that is approaching 1 million barrels per day now moves by rail, according to the North Dakota Pipeline Authority.

“Over half of the U.S. crude moved by rail hails from the Bakken, where the trend has allowed drillers to quickly send their barrels to refineries in the biggest fuel markets along U.S. coasts where they fetch higher prices, boosting profits.

“‘The most likely scenario is for regulators to gradually phase in safety improvements,’ said energy analyst Michael Wittner of Societe Generale. ‘That could increase transportation costs, but if there were a decision to replace older tank cars on short deadline, crude would be piling up in North Dakota.’” (Let’s not be disrupting the flow of oil — and cash.)

“Retrofitting the entire fleet of older DOT-111s would be costly and take up to ten years, the Rail Supply Institute, which represents tank car owners, said last year, in part because manufacturers are already struggling with a backlog of tank car orders. Newer DOT-111s feature safety improvements, but comprise only around 14,000 cars so far, according to the AAR.

“Sidelining older DOT-111s could depress Bakken oil prices at the wellhead as producers compete for insufficient pipeline capacity, eventually hurting production, Fielden said. Any fall in deliveries by rail could force some coastal U.S. refineries to go back to buying more expensive crude imports.

“If all older tankers were retrofitted, it could add between 20 and 40 cents per barrel to crude-by-rail costs, assuming a cost of $30,000 to $60,000 per car, according to a report this month from Turner, Mason & Company consultants.

“Should producers have to rely just on pipelines, Bakken deliveries would plummet to less than 600,000 bpd at the most, less than 60 percent of daily output, according to the state pipeline authority.

“Because of its rapid output growth and isolated location from fuel markets, only a small portion of Bakken crude is processed in facilities known as fractionation plants, which strip out volatile gases like propane and butane, known as light ends. The plants can require large up-front investment, and years to build.” (Whoa there, time and money again? Forget it!)

“‘Regulatory costs are going to go up, it’s just a question of how high and how fast,’ said Robert McNally, president at U.S. energy consultant Rapidan Group. ‘I expect officials will try to find a sweet spot where timely and adequate regulations … do not cripple Bakken economics.’” (Ah yes, a sweet spot that doesn’t interfere with profit!)

Just maybe in all of that there are some lessons for those of us living in Benicia, California about the priorities that should be guiding our decisions when it comes to bringing in Bakken and Canadian tar sands crude. Our neighbors to the east on that train route are obviously deeply concerned; why not Benicia?

Should an accident or major spill occur on that clearly precarious route down the Feather River Canyon, the damage to river, reservoir and water supply would be incalculable. And what of Sacramento and Davis and their obvious great vulnerability — have we no responsibility to our neighbors along that long trail from Alberta or North Dakota to Valero?

And, finally, of course, there is that bloody problem of the environmental costs of jacking up our use of not just more oil — bad enough in itself — but the most dangerously polluting stuff we can find. A bizarre example of man’s capacity to blot out the future in the pursuit of — just what?!

Jerome Page is a Benicia resident.
Bakken Crude, Crude By Rail, DOT-111, Emergency Readiness & Response, Federal Regulation (U.S.), Hazmat notification

Modesto Bee editorial: Tell us when dangerous oil cars are rolling

Repost from The Modesto Bee

Our View: Tell us when dangerous oil cars are rolling

August 9, 2014

Tank cars suitable for carrying Bakken crude oil sit on the BNSF railroad tracks that run through Escalon in May. The cars were empty, but left unattended for several days at a time. MIKE DUNBAR — mdunbar@modbee.com

Anyone who bothered to examine the 40 black, cylindrical railway tankers parked within 60 feet of a neighborhood in Escalon would have noticed a couple of markings. First was the red diamond-shaped placard with a flame on it; the other was the designation “DOT 111” in a grid stenciled on the tank.Those markings are what you find on tank cars used to carry the most dangerous liquids across America – including the volatile crude oil extracted from Bakken shale deposits in North Dakota.

A BNSF official said those unattended tank cars left on one of the double tracks in Escalon for a total of seven days over several weekends from April to June were empty. Unfortunately, no one in the community of 7,000 knew enough about them to bother to ask what was in them.

“I’m not aware of what was in those cars,” said Escalon Fire Chief Rick Mello, who commands a staff of nine full-time firefighters and a volunteer force of 16. Up to 50 trains go through Escalon each day, and BNSF never notifies Escalon about what is moving along its tracks – unless asked.

That must change, because it’s entirely likely we’ll see far more of those cars in the future. And they won’t always be empty.

California’s Office of Emergency Services estimates shipments of Bakken crude will increase 25-fold by 2016 as 150 million barrels move to California’s refineries in the Bay Area, Southern California and eventually Bakersfield. Since all Bakken crude moves by rail, that could mean another 225,000 tank cars a year moving through Roseville, Sacramento, Modesto, Merced and beyond. Mother Jones magazine calls it a “virtual pipeline.”

The Wall Street Journal reported Bakken crude contains higher amounts of butane, ethane and propane than other crudes, making it too volatile for most actual pipelines. Those gases have contributed to the deaths of 47 people in the town of Lac-Megantic in Canada, where a train carrying Bakken crude derailed in July 2013 and exploded. Less dramatic derailments, some with fires, have occurred in North Dakota, Virginia and Illinois. The U.S. Department of Transportation reports 108 crude spills last year.

“When you look at the lines of travel from Canada and North Dakota, you figure if they’re headed for the Bay Area or to Bakersfield, the odds are that you’re going to see shipments going down the Valley,” said Assemblyman Roger Dickinson, who represents north Sacramento. That’s why he authored Assembly Bill 380, which would require the railroads to notify area first-responders whenever these trains are passing through.

But the nation’s railroads are largely impervious to local concerns; they’re governed by the U.S. Department of Transportation and they’re powerful.

In July, the DOT issued proposed new rules for safe transport, including increased cargo sampling, better route analysis, a 40 mph speed limit on trains labeled “high-hazard flammable,” and switching to the new, safer DOT 111 cars after Oct. 1, 2015. The new cars have double steel walls, better closures and heavier carriages. Currently, they make up about a third of the nation’s tanker fleet.

California’s Office of Emergency Services has issued 12 recommendations, ranging from allowing better data collection to phasing out those old tank cars to better training for first-responders.

Laudably, the railroads are already doing most of these things. Since the mid-1990s, BNSF has offered – at no charge – training for handling spilled hazardous materials and dealing with emergencies. One of Escalon’s eight full-time firefighters was trained at virtually no cost to the city. BNSF said they would even do on-site training for departments. But not every fire department has taken the courses. A BNSF spokeswoman said Sacramento sent only one firefighter to the most recent three-day training on dealing with hazardous materials, including Bakken crude.

The federal DOT issued an emergency order in May to require all carriers to inform first responders about crude oil being shipped through their towns and for the immediate development of plans to handle oil spills. Unfortunately, it contains a discomforting criteria: the order applies only to trains carrying 1 million gallons of Bakken crude, or roughly 35 tank cars. And to reach DOT’s definition of a “high-hazard flammable train,” a train must have 20 tank cars.

But a Bakken explosion in Virginia blew one tank car an estimated 5,500 feet; a photograph of another explosion showed a fireball rising 700 feet from a single car. Our first responders ought to know when even one car carrying such material is coming through.

Dickinson’s bill would make notification available on a real-time basis, without having to ask. His goal, said Dickinson, is to “give first responders better information on how to respond. The techniques and materials used in dealing with different chemicals, or even different types of oil, vary widely. ‘I know I’m dealing with oil, but what kind of oil?’ My bill is aimed at getting better, more timely, more complete information to responding agencies.”

But his bill mirrors federal orders on the size of the train; our first responders need to know when any hazardous shipment is moving through.

The incredible expansion of America’s oil resources is creating many positives – from more jobs to less dependence on foreign oil. But it’s happening so fast that we’re devising the safety aspects as we roll along this virtual pipeline from North Dakota to California in the west and to New Jersey in the east. Accidents are happening along the way. Federal rules don’t go nearly far enough to protect public safety in this new world. Dickinson’s bill and the state OES recommendations would help, but we need a broader dialogue. As Dickinson said, “we know we’re going to have derailments, no matter how careful people try to be.”

That’s why first-responders such as Escalon’s Chief Mello must “prepare for anything, any day.” Knowing what’s coming gives us a head start.

Bakken Crude, Crude By Rail, DEIR, Derailment, DOT-111, Explosion, Valero Benicia Refinery

Sacramento leaders: Risk of oil train explosions must be acknowledged

Repost from The Sacramento Bee

Sacramento leaders: Risk of oil train explosions needs to be acknowledged

By Tony Bizjak, Aug. 5, 2014
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An oil train derailment and explosion in Quebec last July prompted Canadian officials to impose tougher safety regulations. | Paul Chiasson / AP/Canadian Press

Sacramento area leaders say the city of Benicia is failing to acknowledge the risks of explosions and fires that could happen if the Bay Area city approves Valero’s plan to run crude oil trains through Northern California to its refinery.

The accusation, in a draft letter released Tuesday by the Sacramento Area Council of Governments, comes in response to a Benicia report that said twice-daily rail shipments of 70,000 barrels of crude will pose no significant threat to cities on the rail line, such as Roseville, Sacramento and Davis.

The Sacramento group is calling that finding “fundamentally flawed,” and points out that the federal government issued an emergency order in May saying new volatile crude oil shipments are an “imminent hazard” along rail lines.

“I don’t know how you can conclude there is not a significant hazard,” said Kirk Trost, an attorney for SACOG, a planning agency of the region’s six counties and 22 cities. “The (environmental report) never looks at the risk of fire and explosion in one of these situations.”

Trost said the letter has not yet been endorsed by the SACOG, but was written by SACOG staff in consultation with regional leaders.

It urges Benicia to redo its analysis and provide a clearer picture of the risks the project imposes on up-rail cities. It also says the project, proposed by Valero Refining Co., should not be approved without new funding to train firefighters to deal with oil spills and for rail safety improvements.

It also calls for limits on the amount of time crude oil tank cars are stopped or stored in cities. “Our view is they should not be stored in any of our communities along the line,” Trost said.

Valero, which receives most oil at its Benicia refinery via ship, plans to begin taking deliveries by train from various sites in North America, including potentially from the Bakken fields of North Dakota. Bakken trains have been involved in several recent explosive fires, including a derailment in the Canadian town of Lac-Megantic that killed 47 residents. Federal officials said last month that studies show Bakken oil is more volatile than other crude oils. The oil industry disputes that assertion.

The Benicia report concluded that an oil spill between Roseville and Benicia can be expected to happen once every 111 years. It acknowledges “if a release in an urban area were to ignite and/or explode, depending on the specific circumstances, the release could result in property damage and/or injury and/or loss of life,” but doesn’t expand on that statement. Instead, it says rail transport is becoming safer.

The SACOG letter challenges the once-in-111-years figure, noting it was calculated using data from 2005 to 2009, and disregards a dramatic surge in crude oil rail spills and fires in the last two years. Benicia city planners did not respond to a Bee request for comment.

Benicia’s analysis stops at Roseville. Several local officials, including Plumas County supervisor Kevin Goss, say they want it to include likely routes to the north and east, including the Feather River Canyon and the Dunsmuir areas, both of which have been designated by the state as high-hazard areas for train derailments.

“I think it should be studied all the way out to where (the shipments) originate,” Goss said.

Benicia officials have said they did not study beyond Roseville because they do not know which route crude oil trains might take beyond that point.

Several attorneys, unassociated with the case, say state environmental law lays out what cities should study, but has gray areas.

Environmental law attorney Andrea Matarazzo, a partner with the Pioneer Law Group in Sacramento, says case law makes it clear that a city can’t draw a line around its project and study only local impacts. But she said the city can make a judgment call on where to stop, if it has a reasonable explanation.

Another environmental law attorney, Jim Moose, partner at Remy, Moose, Manley in Sacramento, said that CEQA does not require a city to look at the “Armageddon” or worst-case scenario, but cities are obligated to look at reasonably foreseeable impacts. “It seems to me a good EIR would lay out the consequences and not just say the probability of it, especially since the time frame in question is not all that long” from a legal perspective. “But it is a gray area of the law.”

SACOG attorney Trost said the draft letter will be reviewed by the SACOG board later this month. Benicia has set a Sept. 15 deadline for receiving comments and questions to its environmental analysis. Yolo County sent Benicia a similar complaint letter last month.