Category Archives: Federal Regulation (U.S.)

Bakken Crude, Canadian regulation, DOT-111, Federal Regulation (U.S.)

Canada is aggressive on crude by rail regulation; the US, not so much

Repost from Platt McGraw Hill Financial – The Barrel

Regulation & Environment: Canada’s aggressive on crude oil by rail regs; the US, not so much

By Herman Wang | June 9, 2014

It has been 338 days since the explosive derailment of a train carrying crude oil killed 47 people in Lac-Mégantic, Quebec.

Meanwhile, 227 days have passed since an oil train derailed and exploded in Alabama, spilling 750,000 gallons of crude, and 161 days since another oil train ignited in North Dakota, spilling 400,000 gallons and forcing the evacuation of the town of Casselton.

And yet, despite these and several other recent accidents attributed to the spike in North American crude-by-rail traffic, US officials have yet to publicly unveil any new comprehensive safety regulations and tank car specifications. Those rules are not likely to be revealed until later this summer—and possibly not finalized until year’s end—thanks to the US’ lengthy, consultative rulemaking process.

That puts the US far behind Canada, which typically follows the US’ lead on rail regulations.

Canada on April 23 set an aggressive deadline of May 2017 for the total removal or retrofit of all legacy DOT-111 tank cars used to ship crude oil and ethanol from Western Canada to refineries and also ordered the immediate removal of 5,000 “substandard” tank cars without continuous bottom-level protection layers.

Canada was able to move relatively quickly on its crude-by-rail safety rules because of a requirement that the government respond within 90 days to any recommendation by the country’s investigatory Transportation Safety Board, which in January had called for more stringent DOT-111 standards in the wake of the Lac-Mégantic accident.

The US has no such requirement, and despite the US National Transportation Safety Board having recommended since 2012 more robust tank car requirements, regulators are still muddling through their rulemaking, much to the dismay of safety advocates who would like to see quicker action. About 650,000 carloads of crude are expected to be shipped by rail in 2014, according to the rail industry, compared to just 9,500 carloads in 2008.

The US Department of Transportation on April 30 did submit a crude-by-rail rulemaking package, including tank car specifications, to the White House Office of Information and Regulatory Affairs for review, but no details of the regulations are publicly available, leading to much speculation on what they might contain.

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The White House, under processes outlined in the Administrative Procedure Act, typically reviews “significant” regulations for up to 90 days, including performing an economic analysis. The DOT estimates that the crude-by-rail review will conclude by mid-July, at which time, the DOT would unveil the draft proposal in the publicly viewable Federal Register.

A 60-day public comment period would follow, after which the DOT may incorporate some of those comments into a final rule. That final rule would then be submitted to the White House for another review, before it is finalized, published in the Federal Register and made effective.

The intent of the exhaustive US rulemaking system is to gather as much stakeholder input as possible and to allow for careful cost-benefit analyses and alternative solutions to be explored, inefficient though the process may be. And it is not unheard of for controversial rulemakings to be mysteriously delayed until a less politically sensitive time, such as after an election has passed.

For crude-by-rail, the regulations look on pace to be finalized by the end of the year or perhaps early 2015, though DOT officials have pledged to accelerate that timetable. In the meantime, the DOT has issued a handful of orders regarding speed limits for oil trains, routing protocol and proper classification of crude oil cargoes.

“We’re working as hard as we can to get the rule out as soon as possible,” Cynthia Quarterman, the head of the DOT’s Pipelines and Hazardous Materials Safety Administration, testified at a Senate Commerce, Science and Transportation Committee hearing last week.

Pressed by lawmakers on whether the US would match Canada’s phase-out of legacy DOT-111 tank cars, she responded: “Canada has the advantage of being able to say in a public forum that they can remove those cars in three years. Because we have a rulemaking, we can not say anything comparable on the record until it goes through the rulemaking process.”

But, in perhaps a hint to what the rules may contain, she added that US officials are working closely with their Canadian counterparts and that “we applaud their move to remove the DOT-111s in three years time.”

Should the US require a similar fast-track phase-out schedule for DOT-111 tank cars, the oil industry is sure to be upset, as it has warned of potential shortages in tank cars and limited capacity to build new ones.

But speculation will remain speculation, until the White House finishes its review of the DOT proposal.

— Herman Wang in Washington

Bakken Crude, Crude By Rail, Derailment, Environmental Impacts, Federal Regulation (U.S.), Massive increase in crude-by-rail, Tar sands crude

Vermont: catastrophic risk to Lake Champlain

Repost from Lake Look, a publication of Lake Champlain Committee
[Editor: An excellent and thorough look at crude oil train derailment risks in and around Lake Champlain.  – RS]

Rail transport of oil poses risk to Lake Champlain

By Lake Champlain Committee Staff Scientist Mike Winslow   |  April, 2014
An oil train rolls south along the shores of Lake Champlain. Photo by Frank Jolin

The sound of trains clacking along the rails that abut Lake Champlain has become more common recently with the dramatic increase in freight traffic attributed to fossil fuel extraction. Each week approximately 60 million gallons of oil travel along the lake carried by 20 trains with up to 100 cars each. The U.S. now meets 66 percent of its crude oil demand from production in North America with tremendous growth in outputs from Canada and the Bakken oil fields of North Dakota. In October 2013 U.S. crude oil production exceeded imports for the first time since February 1995.

Oil produced from the Bakken fields is very light. That means it flows easily, but it also means it is more volatile and flammable. As a result, the potential property damage and loss of life associated with rail accidents involving Bakken oil is higher than oil from other sources. In January of this year two federal agencies issued a safety alert warning of these risks.

The alert was triggered by a series of devastating accidents. The Federal Railroad Administration statistics suggest that on average at least one car slips off the tracks every day. There have been six major derailments between the beginning of 2013 and mid-January 2014. The most infamous occurred on July 5, 2013, in Lac Megantic, Quebec. An improperly secured train began rolling on its own, and 63 cars derailed near the center of town. Derailment led to multiple explosions and fires, evacuation of 2,000 people, and 47 fatalities. On Oct. 19, 2013, 13 tank cars derailed in Alberta leading to evacuation of 100 residents. Three cars carrying propane burned following an explosion. On Nov. 8, 2013, 30 cars derailed in a wetland near Aliceville, Ala., and about a dozen were decimated by fire. On Dec. 30, 2013, two trains, one carrying grain and one oil, collided in Casselton, N.D. Twenty of the oil train cars derailed and exploded leading to evacuation of 1,400 people. On Jan. 7, 2014, 17 cars derailed in New Brunswick and five exploded leading to evacuation of 45 people. On Jan. 20, 2014, seven cars derailed on a bridge over the Schuylkill River in Philadelphia, though no oil leaked. More recently, 15-17 cars derailed in Lynchburg, Va., on April 30. Three fell into the James River and one burst into flames. There were no injuries but 300-350 people had to be evacuated and oil leaked into the James River. The state estimated 20,000 to 25,000 gallons escaped during the wreck.

Our region is no stranger to train derailments. In 2007, a northbound Vermont Railways freight train derailed in Middlebury spilling gasoline into Otter Creek and leading to the evacuation of 30 streets in the vicinity. Trains have also derailed along the Lake Champlain route. In 2007, 12 cars derailed near Route 22 in Essex, N.Y., the same stretch of tracks now carrying volatile oil.

Concern over the state of North American freight rail safety predates the increase in oil shipments. In 2006 the Toronto Star ran a five-part series on rail safety. They noted “Canadian freight trains are running off the rails in near record numbers and spilling toxic fluids at an alarming rate, but only a tiny fraction of the accidents are ever investigated.”

In contrast to Bakken field oil, tar sands oil is very heavy. Cleanup of tar sands oil following accidents is extremely difficult. The oil sinks rather than floating, making containment very difficult.

The greatly increased traffic in oil has further strained railroad infrastructure. According to an article in Pacific Standard Magazine, 85 percent of the 92,000 tank cars that haul flammable liquids around the nation are standard issue DOT-111s. They have been referred to as “Pepsi cans on wheels.” These cars are built to carry liquids, but lack specialized safety features found in pressurized tanks used for hauling explosive liquids. The industry has agreed to include additional safety features in any new cars put on the tracks, but since rail cars have an economic life of 30 to 40 years, conversion to the newer cars has been slow.

One relatively new risk is the predominance of “unit trains.” These are long series of cars all shipped from the same originating point to the same destination. Often the cars will all carry the same product. It used to be that oil cars were mixed in with other freight cars bound for different locations. Unit trains are a greater risk in part because safety standards are based on the carrying capacity of a single car and don’t account for the greater volumes that unit trains can transport. The National Transportation Safety Board, an independent federal agency charged with investigating accidents, has called on the Federal Railroad Administration to change this standard.

Recently, an oil company submitted plans to build an oil heating facility in Albany, N.Y. The facility would be used to heat oil shipped via rail. The oil would then be transferred to barges and floated to refineries. If permitted, a heating facility would draw increased transport of Canadian tar sands, which needs to be diluted or heated for loading or unloading, through the Lake Champlain region. In contrast to Bakken field oil, tar sands oil is very heavy. Cleanup of tar sands oil following accidents is extremely difficult. The oil sinks rather than floating, making containment very difficult. When a pipeline carrying tar sands oil broke near Kalamazoo, Mich., 850,000 gallons spilled. The resulting cleanup cost over $1 billion and costs were “substantially higher than the average cost of cleaning up a similar amount of conventional oil,” according to a report prepared by the Congressional Research Service.

In November of 2013, the New York Department of Environmental Conservation (DEC) declared the proposed facility would have no significant environmental impacts. However, public outrage led them to reconsider that declaration, expand the public comment period, and seek additional information from the proponents. Still, the additional requested information only touches the tip of the facility’s impacts on the region. The facility should undergo a full environmental impact review that includes potential impacts on freight shipping throughout the region including along Lake Champlain.

The increased risk associated with more oil transport along Lake Champlain and in the region seemed to catch regulators by surprise, but they are reacting now. On Jan. 28, N.Y. Gov. Andrew Cuomo issued an executive order directing several state agencies to do a top-to-bottom review of safety procedures and emergency response preparedness related to rail shipments of oil. On Feb. 26, Sen. Schumer called for the phase-out of all DOT-111 rail cars and reduction in rail speed limits in heavily populated areas. On March 4, Cuomo sent a letter to the secretaries of the departments of Homeland Security and Transportation urging them to expedite and strengthen rail safety standards, require reporting by railroad companies of derailments, increase inspections and identify and track rail cars carrying crude oil. On April 10, the DEC issued a joint press release with EPA and the Coast Guard committing the agencies to enhance emergency preparedness and response capabilities for potential crude oil incidents. On April 30, Gov. Cuomo wrote a letter calling on President Barack Obama to prioritize federal actions to reduce risks of future train derailments.

Delays by the Federal Railroad Administration in updating standards to reflect the greatly increased traffic of potentially explosive Bakken crude oil all around the country puts people, communities, Lake Champlain and other waterways at risk. The administration needs to act before another disaster like what occurred in Lac Megantic occurs here or elsewhere. Train whistles echoing off the lake should elicit wistful thoughts of faraway places, not shudders of dread.

Lake Look is a monthly natural history column produced by the Lake Champlain Committee (LCC). Formed in 1963, LCC is the only bi-state organization solely dedicated to protecting Lake Champlain’s health and accessibility. LCC uses science-based advocacy, education, and collaborative action to protect and restore water quality, safeguard natural habitats, foster stewardship and ensure recreational access.

Bakken Crude, Crude By Rail, Derailment, DOT-111, Federal Regulation (U.S.), Hazardous cargo transparency, Oil Industry, Public Safety, Rail industry

Washington State: federal emergency order not enough

Repost from Seattle Weekly News

Emergency Order Requires Railroads to Report Bakken Oil, but Is It Enough?

By Jerry Cornfield Thu., May 29 2014

By the end of next week, Washington will learn how often tank cars of oil siphoned from North Dakota’s Bakken Shale are getting shipped by rail through the state.

 A modern tank car. Photo by Harvey Henkelmann

An emergency order from the U.S. Transportation Department requires railroads to tell the state how many trains carrying this highly flammable varietal of black gold are expected to travel through Washington each week, and on which routes.

Railroads are not required to reveal exactly what days and times the trains are coming or how much crude oil is getting transported.

Community leaders, emergency responders and some politicians say that’s the information they really need to be prepared for a derailment, spill or other type of accident.

They’re aware of oil train derailments in Virginia in April, in Alabama in November; and in Quebec last July, where 47 people died.

They know the chances of an accident are increasing as rail shipments of all types of crude oil multiply in Washington. The state Department of Ecology estimates it went from zero barrels in 2011 to nearly 17 million barrels—roughly 714 million gallons—in 2013.

But rather than criticize the order as inadequate, these leaders cite the federal action as a step forward.

“We’re all kind of worried about (Bakken crude) because it is much more flammable than regular crude oil. We have been asking for more information,” said Brad Reading, assistant chief of Snohomish County Fire District 1 and chairman of the countywide Special Operations Policy Board which handles planning for hazardous materials incidents. “This is certainly a step forward.”

Marysville Mayor Jon Nehring said he understood the federal change “wasn’t overwhelming” in its scope when it was announced in early May

“From the perspective of public safety, the greater the detail the better, so any movement in that direction is good,” he said.

The rules, which kick in June 6 and apply to all 50 states, cover only shipments of at least 1 million gallons of Bakken crude. That sounds like a lot, except when you consider that one tank car holds about 30,000 gallons of crude oil, and oil trains commonly have 100 or more cars hitched together.

Railroads must give the State Emergency Response Commission an estimate of how many trains will run through each county each week. The commission will notify the counties.

After railroads provide the information next week, they won’t need to contact the state again unless the number of trains carrying Bakken oil increases or decreases by 25 percent or more.

Refiners and railroads aren’t enamored with the notification directive. They worry it could increase the risk of sabotage and encourage daring activists to try to block trains through protests.

They’d prefer not to see the information publicized. State emergency management officials plan to post it online but on Tuesday were checking to find out if they are barred from doing so.

And the federal rules don’t deal with the safety of the rail cars in which the Bakken is shipped. That’s a separate conversation going on in Washington, D.C. where the Obama Administration and lawmakers on both sides of the aisle are likely to impose tougher standards for rail car construction.

Sen. Doug Ericksen, R-Ferndale, chairman of the Senate Energy, Environment & Telecommunications committee, said the new notification rule is “a piece of the puzzle” but tank car safety is critically important and needs addressing sooner than later.

He’s planning to hold a public hearing on oil trains June 17 in Spokane.

“State lawmakers must continue to pressure the federal government to take stronger action,” he said when the order came out May 7. “It is what communities throughout Washington deserve and what we didn’t get from our federal leaders today.”

Political reporter Jerry Cornfield’s blog, The Petri Dish, runs regularly at www.heraldnet.com .

Bakken Crude, CPC-1232 standard, DOT-111, Federal Regulation (U.S.), Fracking, Rail tanker cars, Tank car design, Tar sands crude

Prediction: U.S. will ban older rail cars for oil in 3-5 years

Repost from Reuters (also appearing in Insurance Journal)

CN Rail sees U.S. banning older rail cars for oil in 3-5 years

By Rod Nickel  |  May 29, 2014

Canadian National Railway Chief Executive Claude Mongeau said on Thursday he expects U.S. regulators to phase out use of DOT-111 tank cars in three to five years, following a deadly explosion in Quebec last year.

Mongeau also expects U.S. authorities to decide no later than early 2015 on a new, safer design for cars to transport crude oil, he said in an interview.

“Canada has already spoken; all these older legacy DOT-111 cars have to be phased out of flammable service (there) in the next three years,” Mongeau said, speaking at a Sanford Bernstein conference in New York. “I think the U.S. will follow suit, three years, five years who knows? That’s the range I think.”

Canada will require that older rail cars used for carrying crude oil be phased out by May 2017, the government said in April, moving ahead of the United States to ban the controversial cars in light of burgeoning oil-by-rail traffic

The transport of oil by rail is rising due to fracking in North Dakota and drilling in Alberta’s oil sands. Oil train cargoes have been under scrutiny since a shipment derailed in Lac Megantic, Quebec, last July, killing 47 people in an explosion.

The type of cars that derailed there are known as DOT-111 cars, and are seen as being vulnerable to puncturing and leakage.

The Association of American Railroads has made several recommendations for the new cars, including thicker, stronger steel, but shippers, leasing companies and manufacturers have their own views too, Mongeau said.

“There’s broad agreement that we need a new tank car design for the future,” he said. “There’s not agreement on every detail and that’s what the rule-making (process) needs to review and make a decision on from a government standpoint.”

CN transported approximately 73,000 carloads of crude oil in 2013 across its North American network, more than double the previous year’s carloads, but still only 1.4 percent of its total freight carloadings. It expects to double its crude oil carload volumes again by 2015.

Since October 2011, new oil tank cars have been built to a higher standard, known as CPC 1232. The CPC 1232 standard will be the minimum requirement in Canada three years from now.

In the U.S., that standard is not yet regulation, but new cars are already being built to that design, Mongeau said. The Association of American Railroads has said it would like to see a new standard of railcar for oil service with safety features exceeding the 1232.

BNSF Railway Co said in March that production could start in January on the first batch of 5,000 next-generation tank cars designed to carry crude oil more safely.

Even so, the older DOT-111 cars have several years of service remaining, despite their perceived flaws.

“It’s a risk management process,” Mongeau said. “We have used these cars for many, many years in flammable service.”

(Reporting by Rod Nickel in Winnipeg, Manitoba; additional reporting by Josh Schneyer in New York; Editing by Franklin Paul and Marguerita Choy)