Category Archives: Federal Regulation (U.S.)

Bakken Shale, Benicia Planning Commission, California Environmental Quality Act (CEQA), City of Benicia, DEIR, Environmental Impacts, Federal Regulation (U.S.), Oil Industry, Public Health, Rail industry, Rail Safety, Rail tanker cars

SF Chron article about Benicia / Crude by Rail

Repost from SFGate.com

[Editor’s note]  This SF Chronicle report includes a short video interview with Benicia Mayor Elizabeth Patterson.  Unfortunately, the interview is preceded by advertising, and can’t be set to manual play – so I will not embed it here.  After reading the text here, click on the link above to see the video on SFGate.  The text here very nicely places Valero’s proposal in a wider Bay Area and California context, and then lays out some startling numbers.  Worth the read!

Is California prepared for a domestic oil boom?

Published Wednesday, February 26, 2014

The North Dakota oil boom has resulted in more trains going boom. At least 10 trains hauling crude oil from the Bakken Shale across North America have derailed and spilled, often setting off explosions. The deadliest killed 47 people in Lac-Mégantic, Quebec, on July 6, 2013. As California refineries seek to adapt their operations to bring in Bakken crude by rail, Bay Area residents in refinery towns want to know: Will they be safe?

In Solano County, Benicia residents packed a Planning Commission meeting when Valero Refining Co. unveiled a plan to adapt its Benicia refinery to receive crude by rail rather than by ship. In Contra Costa County, Pittsburg residents (as well as state Attorney General Kamala Harris) are concerned about a proposal by West Pac Energy to convert a closed tank farm to an oil storage and transfer facility. Similar worries are voiced in Crockett and Rodeo about a proposed propane and butane project at the Phillips 66 refinery.

Air pollution is the top-line concern for these communities, followed by fear of spills and explosions. Some protests are tied to the larger political debate over importing tar sands oil from Canada.

The refinery operators maintain they are merely trading ship transport for rail transport or upgrading aging facilities.

We do know this: The tangle of laws and agencies that oversee rail transport make it easy to assign blame to someone else and tough to hold any one agency or business accountable. Rail oversight is primarily the federal government’s job, which makes sense for an industry with track in every state. While the state handles pollution, some safety inspections and emergency response, it is unclear how much legal authority it or any other state government has. The Obama administration announced some voluntary safety measures Friday that would slow trains in cities, increase track inspections and beef up emergency response. There’s still work to do be done sorting out who would enforce such rules.

A state Senate committee will meet Monday to begin investigating whether California is prepared to receive hundreds of railcars a day of highly flammable Bakken crude. The legislators are asking: Should we have confidence that the agencies with oversight, the Department of Fish and Wildlife, the California Public Utilities Commission and Caltrans, are up to the job?

We need to know how theses railroads will run safely before more Bakken crude comes in by rail.

More crude riding the rails

85-fold – the increase in the amount of crude oil transported on U.S. railroads since 2006, from 4,700 carloads to 400,000 carloads in 2013, according to a rail industry regulatory filing.

135 times – the increase in the amount of crude transported by rail in California since 2009, from 45,491 barrels in 2009 to 6,169,264 barrels in 2013, according to the California Energy Commission.

1 percent – the portion of crude oil transported into California by rail (most comes by ship). This is projected to increase as more refineries adapt to bring in Bakken crude by rail.

73 degrees Fahrenheit – the flash point of Bakken crude, a lighter oil that contains more volatile organic compounds than other crude oils, as compared with 95 degrees Fahrenheit. “Crude oil being transported from the Bakken region may be more flammable than traditional heavy crude oil,” reported the U.S. Department of Transportation.

Federal Regulation (U.S.), Rail Safety, Rail tanker cars

NTSB: DOT-111 rail tanker cars “unacceptable public risk”

Repost from Associated Press, on Huffington Post

DOT-111 Rail Tank Cars Used To Ship Oil Called ‘Unacceptable’

by JOAN LOWY,  Posted:
Main Entry ImageA DOT-111 rail tanker travels through Council Bluffs, Iowa, Wednesday, Aug. 8, 2012. (AP Photo/Nati Harnik) | ASSOCIATED PRESS

WASHINGTON (AP) — Rail tank cars being used to ship crude oil from North Dakota’s Bakken region are an “unacceptable public risk,” and even cars voluntarily upgraded by the industry may not be sufficient, a member of the National Transportation Safety Board said Wednesday.

The cars, known as DOT-111s, were involved in derailments of oil trains in Casselton, N.D., and Lac-Megantic, Quebec, just across the U.S. border, NTSB member Robert Sumwalt told a House Transportation subcommittee hearing.

Forty-seven people were killed and 30 buildings destroyed in the blaze ignited by the Lac-Megantic accident. The Casselton accident, which occurred half a mile outside the town, created a massive fire that burned for more than 24 hours.

The NTSB has been urging replacing or retrofitting the tank cars since 1991, but the most recent federal effort to write tougher regulations for new cars didn’t get underway until 2011. An initial public comment period closed in December, and regulators are currently at work writing proposed new standards, Cynthia Quarterman, head of the Transportation Department’s Pipeline and Hazardous Materials Safety Administration, told the panel. She said she expects her agency to propose new tank car standards before the end of this year, but refused to be pinned down under questioning by lawmakers on when those rules might become final.

“Right now, there is so much uncertainty that people aren’t going to make investments in safer cars and they’re going to keep running these crummy cars and killing people,” Rep. Peter DeFazio, D-Ore., complained.

Quarterman said she expected her staff to finish writing proposed rules “very soon.” All major regulations go to the White House before they are issued to ensure the safety benefits outweigh the cost to industry. It often takes months to years between when new rules are proposed and when they become final.

Ed Hamberger, president and CEO of the Association of American Railroads, said the industry has strongly urged the government to set new tank car standards.

“We believe there needs to be a safer tank car,” he said.

At least one major freight railroad has given up waiting. Last week, BNSF invited bids from manufacturers for 5,000 new tank cars made to new specifications that the company has developed. The aim is to make these latest tank cars safer than the voluntarily upgraded tank cars that the NTSB has questioned as possibly not safe enough.

The NTSB has said vulnerabilities with the DOT-111s means they are easily ruptured during accidents, releasing crude oil or other hazardous liquids like ethanol that then ignites.

U.S. crude oil production is forecast to reach 8.5 million barrels a day by the end of 2014, up from 5 million barrels a day in 2008. The increase is overwhelmingly due to the fracking boom in the Bakken region, which is mainly in North Dakota, but also extends into parts of Montana and Canada.

U.S. freight railroads transported about 415,000 carloads of crude in 2013, up from just 9,500 in 2008, according to government and industry figures.

The oil trains, some of which are 100 cars long, pass through or near scores of cities and towns.

Sen. Chuck Schumer, D-N.Y, called on the freight rail industry and the Transportation Department to amend a voluntary agreement reached last week to address oil train safety concerns. He said the agreement should be changed to require industry to develop a plan no later than July 1 to phase out or retrofit the DOT-111s.

“Each week seems to come with another freight train derailment, and it is imperative we undertake every measure necessary to ensure the safety of our nation’s communities through which these crude oil tank cars pass,” he said in a statement.

Kevin Thompson, spokesman for the Federal Railroad Administration, said the agreement was just one step in ongoing efforts to improve the safety of crude oil shipments by rail.

“All communities will see a reduced risk of derailments because of increased track and mechanical inspections and the use of enhanced braking technology” under the safety agreement, Thompson said.

Federal Regulation (U.S.), Rail Safety, Rail tanker cars

U.S. Safety Ruling causes Canada company to suspend use of some DOT-111 tank cars

Repost from The Calgary Herald

Crude-by-rail shipper deals with U.S. ruling

Some cars suspended but shipments continuing, says Torq CEO

Crude-by-rail shipper deals with U.S. ruling
Emergency workers examine the aftermath of a train derailment and fire in Lac-Megantic, Que., last July. Photograph by: Ryan Remiorz , AP

By Dan Healing, Calgary Herald February 26, 2014

CALGARY — Some tanker cars in Western Canada have been temporarily suspended from being used to ship oil in the wake of Tuesday’s U.S. rail safety ruling, the chief executive of Calgary-based terminal operator Torq Transloading Inc. said Wednesday.

But service is continuing to be offered, Jarrett Zielinski told the Herald.

“Everything is under regulatory review. The shipments we ship are compliant,” he said in an interview.

“Every precaution is being taken on our end. We are working collaboratively with the regulators, the railroads and the customers to ensure all of our shipments are compliant and there has been no interruption of service.”

A story by Bloomberg earlier in the day had quoted a Torq executive as saying shipments had been halted but Zielinski said that’s not true.

The U.S. Transportation Department on Tuesday ordered energy companies to immediately conduct chemical tests on all crude intended for rail shipment and warned that certain commodities require more robust tank cars for transport.

Zielinski said his private company ships between 40,000 and 45,000 barrels of oil per day but it doesn’t own the cars. He said the “vast majority” of the cars are compliant and any that are questionable have been “temporarily suspended while they are reclassified.”

He said about 95 per cent of the oil his company ships is undiluted heavy oil, which has a much lower risk of igniting than the light crudes shipped from the North Dakota Bakken — such as the cargo aboard the train that exploded in July at Lac-Megantic, Que., killing 47 people.

Most of the oil is bound for the United States. He said Torq frequently tests the product.

Two Calgary-based oilsands shippers said they don’t believe the U.S. ruling will affect their transportation plans.

Producer MEG Energy Corp., which began shipping diluted bitumen in December through the Canexus Corp. rail-loading facility northeast of Edmonton, and moved six unit trains each carrying 60,000 barrels of diluted bitumen in January, is not affected, said spokesman Brad Bellows.

“The cars we have made arrangements to move our products on are very modern cars that meet or exceed all the recent standards and the outlook,” he said.

Spokesman Pius Rolheiser of Imperial Oil Ltd. said the new rules are not expected to affect a project to build a 100,000-barrel-per-day oil loading terminal near Edmonton.

“We’re still in the process of design and manufacture of the cars but I can tell you with certainty they will meet Canadian safety guidelines,” he said. “The tanker cars we use in this project will meet the DOT 111-F specification, which is the American Association of Railroads current specs. That requires thicker shells as well as steel shields to guard both ends of the car.”

Imperial Oil will be the base load customer in the project it is sharing with American transportation partner Kinder Morgan Energy Partners. Startup is set for next December and the terminal is expected to ship diluted bitumen from Imperial’s Kearl oilsands mine.

Federal Regulation (U.S.), Rail tanker cars

Senator Schumer proposes speedier phase-out of DOT-111 tanker cars

Repost from The Buffalo News

Rail cars through Buffalo post risk that Schumer seeks to end

Schumer proposes speedier phase-out

Crews work on some overturned crude oil cars in the CSX yard in Cheektowaga on Dec. 10. The accident did not cause a spill.

Crews work on some overturned crude oil cars in the CSX yard in Cheektowaga on Dec. 10. The accident did not cause a spill. Mark Mulville/Buffalo News

By Jerry Zremski | News Washington Bureau Chief
February 26, 2014 – 8:14 PM, updated February 27, 2014

WASHINGTON – A hundred tanker cars long, one or two crude oil trains from out west roll through Buffalo every day, along with a train carrying 81 tanker cars of ethanol.

And it all sounds pretty risky to Sen. Charles E. Schumer, D-N.Y., who proposed Wednesday that in densely populated New York, the rail industry speed up the phase-out of the most dangerous kind of crude oil rail tanker cars: the type involved in a deadly derailment in Quebec last year and a much less disastrous one in Cheektowaga last December.

Schumer’s suggestion won the support of Cheektowaga Town Supervisor Mary Holtz, who said people in the town were shaken up by the Dec. 10 derailment even though it caused no spills or injuries.

“We have a lot of houses that are very close to the railroad tracks, so if anything happens here, we’re going to blow up,” Holtz said.

That’s exactly what happened in the town of Lac-Megantic, Quebec, last July 6, when a train carrying crude oil derailed. Several tanker cars exploded, 47 people died, and half of the town’s downtown area was destroyed.

There are parallels between the tanker cars that blew up in Quebec and those that roll through Buffalo on a daily basis. They all carry oil from North Dakota’s Bakken Shale – the biggest American oil play in decades – to points east. And rail industry sources said most of the oil tanker cars that roll through Buffalo are the DOT-111 model, which is the very same model used on the train that derailed in Quebec.

DOT-111 tanker cars aren’t armored or pressurized, making them much more likely to puncture or explode than newer, more sophisticated models.

And while the Federal Railroad Administration and the Pipeline and Hazardous Materials Safety Administration are drawing up new rules that will either eliminate the use of DOT-111s or require that they be retrofitted to meet new safety standards, Schumer said that private oil car leasing companies should draw up a plan by July 1 to phase out their use in New York.

“Transporting crude oil by rail in outdated tank cars – which have been proven to fail frequently upon derailment – is a ticking time bomb,” Schumer said.

Schumer’s statement follows a voluntary agreement struck last week by the U.S. Department of Transportation and the Association of American Railroads that aims to make the rail transport of crude oil safer.

Part of that voluntary agreement calls for lowering the speed limit for oil trains passing through Buffalo and New York City from 50 mph to 40 mph. But Schumer said that speed limit should be enacted for trains passing through all heavily populated upstate areas.

In statements, CSX Corp. – which operates the trains that pass through Buffalo – and the Association of American Railroads stressed that they are taking steps to ensure that oil is being transported safely.

“The DOT-111 tank cars operating today are designed to meet current federal and regulatory requirements as well as industry standards,” CSX said. “The federal government establishes the minimum construction standards for the type of tank cars in which hazardous materials can be transported.”

Meanwhile, the Association of American Railroads said the industry was trying to assess how lower speed limits would affect railroad delivery times.

“In recognition of the significant growth in crude oil moving by rail, and community concerns such as those raised by Sen. Schumer, freight railroads were willing to quickly come together and identify the voluntary steps announced last week,” the rail industry group said.

“In fact, the agreement with DOT does contain a commitment to work with communities to find ways to address their individual concerns.”

The voluntary safety measures also include increased track inspections, better braking technology and safer routing for crude oil trains.

Those measures follow an astounding increase in the amount of crude oil shipped via rail since the beginning of the North Dakota oil boom.

Schumer noted that trains carried nearly 1,400 carloads of oil daily last year, compared with only 31 in 2009. And while CSX would not confirm the number of oil cars rolling through Buffalo, a source with the Brotherhood of Locomotive and Engineers Trainmen said one or two 100-car crude oil trains pass through the city daily, along with that train carrying ethanol.

The trains pass over the Fort-Erie/Buffalo rail bridge and then proceed eastward over tracks that parallel Broadway into Cheektowaga before moving on through Rochester, Syracuse, Utica and Albany. There, they turn southward through New Jersey.

In addition to the spill-free Cheektowaga derailment last December, federal statistics show three small spills of about a gallon each from trains passing through Buffalo last year.

In addition, a minor ethanol leak occurred from a train passing through the area last July, said Kate Hudson, watershed program director at Riverkeeper Inc., a New York environmental group that has called for an immediate moratorium on rail shipments of crude oil in the state.

Those DOT-111 rail cars just aren’t safe, Hudson said, likening them to “a Pepsi can on wheels.”