Oakland City Council votes to oppose coal, crude oil trains
By Rory Carroll, San Francisco, June 18, 2014
(Reuters) – The Oakland City Council has unanimously backed a resolution opposing the use of the city’s rail lines to transport crude oil and coal, a move that supporters hope will call attention to proposed projects that would sharply increase the amount of such cargo rolling through the densely populated city.
The resolution will not halt crude oil trains from entering Oakland since U.S. railroads are federally regulated, but backers hope it will stoke debate about plans for export facilities that would boost demand.
Backers of the resolution are particularly concerned about a proposed upgrade to Phillips 66’s Santa Maria refinery that would allow it to take in more crude oil from North Dakota on trains that would pass by rail through Oakland.
They are also worried about the redevelopment of the Oakland Army Base, which includes the building of a commodities facility that they believe will be used to export coal. The coal would also be moved through the city by rail.
“These proposed export facilities are a serious threat to Oakland and the East Bay communities,” said Jess Dervin-Ackerman of the San Francisco Bay Chapter of the Sierra Club.
“If oil and coal companies have their way, the Bay Area will become the biggest fossil fuel export hub on the West Coast,” she said.
The fuels will not be consumed in the Bay Area, she added, but would just pass through the area on their way to overseas markets.
California has in recent years seen a surge in crude oil arriving by rail on the back of an oil boom in North Dakota’s Bakken shale formation and in Canada, prompting safety and environmental concerns.
Crude oil-by-rail shipments into California increased from about 70 rail tanker carloads in 2009 to nearly 9,500 carloads in 2013, according to state regulators. They are projected to soar in the next few years.
Last July, 47 people were killed in Lac-Megantic, Quebec, when a freight train carrying Bakken crude oil derailed and exploded. Since then, there have been a number of fiery derailments in the United States that have caused environmental damage, but no fatalities.
Separately, the Oakland City Council on Tuesday night unanimously passed a resolution to divest money from city employees from fossil fuel companies, although none of that money is currently invested in those types of businesses.
The move is intended to put pressure on the California Public Employees Retirement System (CalPERS), which does hold such investments, to follow suit.
CalPERS is one of the country’s largest managers of public pensions, with $288 billion in retiree assets under management. (Reporting by Rory Carroll, editing by G Crosse)
Repost from Natural Resources Defense Council [Editor: Excellent resources…. Be sure to see the downloadable fact sheet and blast zone maps for Bakersfield, Benicia, Davis, Martinez, Pittsburg, Richmond and Sacramento that follow below this article. – RS]
It Could Happen Here: The Exploding Threat of Crude by Rail in California
Diane Bailey | June 18, 2014
Key Points
More crude oil was transported by rail in North America in 2013 than in the past five years combined. Millions of Californians live near crude-by-rail routes and could face extreme safety risks.
Federal regulators have few safeguards in place to protect communities and the environment from accidents, spills and explosions resulting from the race to move millions of barrels of crude by rail.
NRDC calls on lawmakers to expedite rules mandating commonsense practices, including removal of defective tank cars, rerouting around sensitive areas, and requiring disclosure regarding the content of all shipments and relevant risks to local residents.
Nearly four million Bay Area and Central/San Joaquin Valley residents are at increased risk from oil train accidents occurring with the proliferation of new crude by rail terminal proposals. But dangerous crude oil train derailments are preventable if the mandatory safety measures NRDC recommends are enacted.
Soda cans on wheels. That’s what some call the dangerous rail tank cars that have suddenly become ubiquitous across the American landscape. In the rush to transport land-locked unconventional new crude oil sources, old rail lines running through communities across America are now rattling with thousands of cars filled with crude oil. Neither the cars nor the railroads were built for this purpose. Worse, federal regulators have few safeguards in place to protect communities and the environment from accidents, spills and explosions resulting from the race to move millions of barrels of crude by rail.
More crude oil was transported by rail in North America in 2013 than in the past five years combined, most of it extracted from the Bakken shale of North Dakota and Montana. In California, the increase in crude by rail has been particularly dramatic, from 45,000 barrels in 2009 to 6 million barrels in 2013. As “rolling pipelines” of more than 100 rail cars haul millions of gallons of crude oil through our communities, derailments, oil spills and explosions are becoming all too common. Between March 2013 and May 2014, there were 12 significant oil train derailments in the United States and Canada. As oil companies profit, communities bear the cost.
Californians Living Near Crude By Rail Routes
A new report from the State of California Interagency Rail Safety Working Group outlines serious vulnerabilities along California rail lines including close proximity to many population centers, numerous earthquake faults, a shortage of adequate emergency response capacity, many areas of vulnerable natural resources, and a number of “high hazard areas” for derailments, which are generally located along waterways and fragile natural resource areas. Millions of Californians live near crude by rail routes and could face extreme safety risks. Currently, there are five major new crude by rail terminals in the planning stages and two recently converted crude oil rail terminals that could collectively bring in up to seven or more mile long trains each day through metropolitan areas like Sacramento, putting up to 3.8 million people in harm’s way.
Explosions and Spills Threaten Lives
“Each tank car of crude holds the energy equivalent of 2 million sticks of dynamite or the fuel in a widebody jetliner,” write Russell Gold and Betsy Morris in the Wall Street Journal. In July 2013, an unattended oil train carrying 72 carloads of crude oil from North Dakota exploded in the center of Lac-Mégantic, Quebec, near the U.S. border. The resulting inferno killed 47 people and destroyed much of the town center. Some 1.6 million gallons of crude oil was spilled. In the months following this devastating event, several more North American oil train derailments illustrated the sobering recurring public safety and environmental threats of catastrophic derailments due to the virtually unregulated surge in crude by rail. In 2013, rail cars spilled more crude oil than nearly the previous four decades combined (1.14 million gallons in 2013 compared to 800,000 gallons from 1975 to 2012).
Communities Lack Information And Control Over Hazardous Rail Shipments
Municipalities across the country are demanding increased communication about rail shipments of crude oil through their communities. However, crude oil — and other hazardous materials shipped by rail — have been exempted from the disclosure requirement of the Emergency Planning and Community Right-to-Know Act (EPCRA). While the federal government finally directed rail companies to disclose this critical information to emergency responders, the general public remains in the dark about the nature of mile long tanker trains hurtling through their backyards at dangerous speed. Nobody has a choice about what gets transported through their community, how dangerous the cargo is, how frequently it goes through or whether it could be rerouted to more remote areas. Of the more than 3.8 million Californians who will be put at risk by proposed new crude by rail terminals, most are unlikely to even be aware of the significant new risks that they face.
Outdated and Dangerous Tank Cars Are Used to Carry Crude
Most of the rail tank cars used to carry flammable liquids, including crude oil are old “DOT-111s,” which are widely known to be unsafe. Speaking at a farewell address at the National Press Club in April 2014, outgoing National Transportation Safety Board (NTSB) chairwoman Deborah Hersman repeated a long-held NTSB position that unmodified DOT-111 tank cars — non-pressurized rail tank cars that accident investigators report are easily punctured or ruptured during a derailment — are not safe to carry hazardous liquids. “Carrying corn oil is fine, carrying crude oil is not,” she said.
Thus, in 2009, the NTSB recommended these tank cars be equipped with additional safety features. Since October 2011, new rail tank cars built for transporting crude oil have incorporated these features, such as the use of head shields, thicker tank material, and pressure-relief devices. Yet regulators have not eliminated the use of the older, unmodified DOT-111 cars for carrying oil — out of 39,000 DOT-111 tank cars now used to carry crude, two-thirds still do not meet these modern safety standards. The Department of Transportation, simply recommended that shippers stop using these cars to transport oil, but they do not require it.
Commonsense Safeguards for Crude-by-Rail Are Overdue
In the longer term, our health depends on cleaner, renewable energy and moving away from fossil fuels. In the immediate term, we must tighten safety regulations on the rail transport of crude oil, or run the risk of devastating consequences. NRDC calls on lawmakers to expedite rules mandating commonsense practices, including but not limited to the following:
Remove Defective, Dangerous Tankers from Crude by Rail Service: The existing fleet of dangerous DOT-111 tank cars must be taken out of crude oil service immediately.
Impose Safer Speed Limits: Crude oil unit trains must adhere to speed limits that significantly reduce the possibility of an explosion in the event of a derailment.
Reroute Around Sensitive Areas: The National Transportation Safety Board recommendation that crude oil trains avoid heavily populated areas and otherwise sensitive areas must become mandatory.
Require Disclosure: Information regarding the content of all shipments and relevant risks and emergency procedures should be made accessible to local residents.
Provide Emergency Responder Resources: States should assess fees on shippers and carriers to fully cover the costs of providing emergency response services and safeguarding the public from oil trains, and ensure that there is adequate emergency response capacity.
Make Additional Operational Safety and Oversight Improvements: Unit trains of crude oil and other hazardous materials should be placed in the highest risk category of Hazmat shipments; and many other operational improvements should be made. Additional inspections of crude oil trains are also critical, including the funding necessary for more rail safety personnel.
Exercise Local Government Powers:
Local governments and states can require cumulative risk analysis of crude oil rail infrastructure and increased rail traffic.
Local governments should thoroughly evaluate all of the environmental and public health and safety risks of crude oil rail terminals that require land use permits or other forms of local approval.
Local governments should reject any new crude oil rail terminals within one mile of sensitive sites such as homes, schools, daycares, and hospitals.
Crude oil train accidents are preventable. All Californians should be calling for the crude oil and rail safety standards listed here.
Communities throughout the U.S. and Canada are waking up to the dark side of North America’s energy boom: Trains hauling crude oil are crashing, exploding and spilling in record numbers as a fast-growing industry outpaces the federal government’s oversight.
In the 11 months since a runaway oil train derailed in the middle of a small town in Quebec, incinerating 47 people, the rolling virtual pipelines have unleashed crude oil into an Alabama swamp, forced more than 1,000 North Dakota residents to evacuate, dangled from a bridge in Philadelphia and smashed into an industrial building near Pittsburgh. The latest serious accident was April’s fiery crash in Lynchburg, Virginia, where even the mayor had been unaware oil was rolling through his city.
These dangerous moments on the rails raise questions about the safety of transporting increasing amounts of oil in mile-long chains of tank cars, some of them decades old. Community leaders and activists from Oregon to Alabama to Albany call the trains a disaster waiting to happen — despite the Department of Transportation’s efforts to play catchup through a series of emergency orders, agreements with industry and proposed regulations being reviewed by the White House.
A POLITICO analysis of federal data from more than 400 oil-train incidents since 1971 shows that a once-uncommon threat has escalated dramatically in the past five years:
This year has already shattered the record for property damage from U.S. oil-train accidents, with a toll exceeding $10 million through mid-May — nearly triple the damage for all of 2013. The number of incidents so far this year — 70 — is also on pace to set a record.
Almost every region of the U.S. has been touched by an oil-train incident. These episodes are spreading as more refineries take crude from production hot spots like North Dakota’s Bakken region and western Canada, while companies from California and Washington state to Missouri, Pennsylvania, Virginia and Florida build or expand terminals for moving oil from trains to barges, trucks or pipelines.
The voluntary reforms that DOT and industry have enacted so far might not have prevented the worst accidents. For example, the department announced a voluntary 40 mph speed limit this year for oil trains traveling through densely populated areas, but DOT’s hazardous-incident database shows only one accident in the past five years involving speeds exceeding that threshold. And unlike Canada’s transportation ministry, DOT has not yet set a mandatory deadline for companies to replace or upgrade their tank cars.
Starting this month, DOT is requiring railroads to share more timely information with state emergency managers about the trains’ cargoes and routes. But some railroads are demanding that states sign confidentiality agreements, citing security risks.
Transportation Secretary Anthony Foxx says each step is a move in the right direction.
“There’s been such exponential growth in the excavation of this crude oil that it’s basically outrun our normal systems,” Foxx said in an interview. But Foxx, who became secretary four days before the Quebec disaster, added: “We’ve been focused on this since I came in. … We’re going to get this right.”
Defending the voluntary speed limits, Foxx said: “You have to understand that all these pieces fit together. So a stronger tank car with lower speeds is safer than a less strong tank car at higher speeds.”
Members of Congress are joining the call for more action.
“The boom in domestic oil production has turned many railways and small communities across our country into de facto oil pipelines, and the gold-rush-type phenomenon has unfortunately put our regulators behind the eight ball,” said Sen. Chuck Schumer (D-N.Y.), who has been pushing for stricter safety and disclosure rules. “It has become abundantly clear that there are a whole slew of freight rail safety measures that, while for many years have been moving through the gears of bureaucracy, must now be approved and implemented in haste.”
Sierra Club staff attorney Devorah Ancel said the rising damage toll should “ring alarm bells in the minds of our decision-makers, from cities all the way up to Congress and the president.”
“Our fear is that the regulators are being pushed over by the industry,” she said.
Like the oil boom itself, the surge in oil-train traffic has come much faster than anyone expected. Meanwhile, the trains face less onerous regulations than other ways of moving oil, including pipelines like TransCanada’s Keystone XL project.
Keystone, which would carry oil from Alberta to the Gulf Coast, has waited more than five years for a permit from the Obama administration while provoking a national debate about climate change. But no White House approval was needed for all the trains carrying Canadian oil into the United States. In fact, freight railroads in the U.S. are considered “common carriers” for hazardous materials, meaning they can’t refuse to ship it as long as it meets federal guidelines.
The oil-trains issue is bringing a flurry of foot traffic to the White House Office of Management and Budget these days as railroad and oil industry representatives press their case on what any new regulations should look like. Representatives of the country’s leading hauler of Bakken crude, Warren Buffett’s BNSF Railway, met with OMB regulatory chief Howard Shelanski on June 3 and June 6, and joined people from railroads including CSX, Union Pacific and Norfolk Southern in another meeting June 10.
DOT says it has been working to address the problem since as far back as September 2012, and that efforts accelerated after Foxx took over in July. His chief of staff, Sarah Feinberg, holds a meeting each morning on the issue, and she and Foxx meet regularly with top leadership at the two key DOT agencies that oversee railroads and the transport of hazardous materials.
The voluntary agreements that Foxx’s department has worked out with the freight rail industry and shippers address issues like track inspections, speed limits, brakes and additional signaling equipment. Those are all “relevant when dealing with reducing risk” from oil train traffic, the freight rail industry’s main trade group said in a statement.
“The number one and two causes of all main track accidents are track or equipment related,” the Association of American Railroads said. The statement added, “That is how the industry came up with the steps in the voluntary agreement in February aimed at reducing risks of these kinds of accidents when moving crude oil by rail.”
Meanwhile, the oil train business is primed to get bigger. Even TransCanada might start using rail to ship oil to the U.S. while waiting for Keystone to get the green light, CEO Russ Girling said in an interview in May — despite agreeing that trains are a costlier and potentially more dangerous option.
“If anybody thinks that is a better idea, that’s delusional,” Girling said.
In fact, the State Department estimated this month that because of the risks of rail compared with pipelines, an additional 189 injuries and 28 deaths would occur every year if trains end up carrying the oil intended for Keystone.
But environmentalists who warn about the dangers of crude-by-rail say it would be wrong to turn the issue into an excuse to approve Keystone. For one thing, the Texas-bound pipeline would replace only part of the train traffic, which has spread its tendrils all across the U.S. “There are no pipelines that run from North Dakota to the West Coast,” the Sierra Club’s Ancel said.
Valero Oil-by-Rail Plan Has ‘Unavoidable’ Air Impacts, City Says
By Lynn Doan Jun 17, 2014
Valero Energy Corp. (VLO)’s plan to unload as many as 70,000 barrels of oil a day from trains at its Benicia refinery will increase emissions across California in a “significant and unavoidable” way, a city report shows.
Valero has applied to build a rail-offloading rack at the plant northeast of San Francisco that would take oil from as many as 100 tanker cars a day. The San Antonio-based company delayed the project’s completion by a year to early 2015 as it awaits approval from the city.
“Project-related trains would generate locomotive emissions in the Bay Area Basin, the Sacramento Basin, and other locations in North America,” the city of Benicia said in an environmental assessment posted on its website today. “The city has no jurisdiction to impose any emission controls on the tanker car locomotives; therefore, there is no feasible mitigation available to reduce this significant impact to a less-than-significant level.”
Valero is proposing the rail spur as record volumes of oil are extracted from North American shale formations that the U.S. West Coast has little pipeline access to. California’s refiners are already bringing in the biggest-ever volumes of oil by rail as they seek to displace shrinking supplies of crude within the state and from Alaska.
A series of explosions and derailments of trains carrying crude, including one in Quebec that killed 47 people in July, touched off a flood of letters to the city of Benicia about Valero’s project and compelled the planning commission to put off a decision until an environmental study could be done.
New Rules
Regulators in both the U.S. and Canada are imposing new rules designed to improve the safety of trains carrying oil and a group of California agencies released a report June 10 recommending ways in which the state should respond.
Earlier this month, the city council in Vancouver, Washington, voted to oppose a proposal by Tesoro Corp. (TSO) and Savage Cos. to build a 360,000-barrel-a-day, rail-to-marine complex at the Port of Vancouver.
Valero’s Benicia project would probably result in a spill of more than 100 gallons once every 111 years, according to an analysis conducted as part of the city’s environmental report. The report was prepared by researchers at the University of Illinois’s Rail Transportation and Engineering Center in Urbana, Illinois.
California’s refiners received 557,315 barrels of oil by rail in April, the most ever for that month, state Energy Commission data show. Crude from Canada made up 45 percent of the state’s total rail receipts. Oil from North Dakota accounted for 22 percent.
’Challenged’ Market
Valero has described refining in the western U.S as “a challenged market” with margins close to break-even when all of the region’s plants are running normally. Profits from the 132,000-barrel-a-day Benicia refinery are particularly under pressure, Joe Gorder, the company’s president and chief executive officer, said in a presentation May 21.
The plant “produces a significant yield of gasoline, which, of course, we’ve seen the margins compressed on and demand not be the greatest on,” Gorder said at the UBS Global Oil and Gas Conference in Austin, Texas. Sourcing alternative crudes on the West Coast “would increase the economics out there for us substantially,” he said.
Spot California-grade diesel has traded about 3.5 cents a gallon above gasoline in Los Angeles this year and averaged an 8.75-cent premium in 2013, data compiled by Bloomberg show.
These dangerous moments on the rails raise questions about the safety of transporting increasing amounts of oil in mile-long chains of tank cars, some of them decades old. Community leaders and activists from Oregon to Alabama to Albany call the trains a disaster waiting to happen — despite the Department of Transportation’s efforts to play catchup through a series of emergency orders, agreements with industry and proposed regulations being reviewed by the White House.