More Fiery Oil Train, Pipeline Accidents Unless Government Acts: Report
September 22, 2014
If the U.S. doesn’t quickly address the safe transportation of oil and gas, Americans could pay the price with more fiery train and pipeline accidents, according to a report released Monday by the Government Accountability Office.
“Without timely action to address safety risks posed by increased transport of oil and gas by pipeline and rail, additional accidents that could have been prevented or mitigated may endanger the public and call into question the readiness of transportation networks in the new oil and gas environment,” found the report.
The GAO report focused on the safety of moving crude oil by train and the growing network of “gathering lines,” largely unregulated natural gas pipelines. Both have been subjects of recent investigations by NBC News. The GAO determined that the Department of Transportation had “not kept pace with the changing oil and gas transportation environment.”
Oil and gas production in the U.S. increased more than fivefold between 2007 and 2012, a boom brought on by technological advances in drilling and hydraulic fracturing, or “fracking.” Vast volumes of oil and gas production soon outstripped the pipeline infrastructure in place to move them.
Crude producers began to load their oil on trains. More than 400,000 carloads of crude ran over North American rails in 2013, up from just 9,500 in 2008. But a series of explosive wrecks have raised concern about the safety of oil trains — the worst, a 2013 derailment outside a small Quebec town, killed nearly 50 people.
A 2013 NBC News investigation found regulators had long known that the tank cars used to ship oil were vulnerable to rupture in an accident.
The DOT has since issued proposed rules to improve the train cars that carry oil. In its report, the GAO applauded the move, but emphasized safety improvements must go beyond the cars, including testing the makeup of the oil, which the DOT has said is particularly flammable.
The GAO also warned better oversight was needed over the growing network of “gathering pipelines” that move natural gas from the well. In August, an investigation by NBC News found that 250,000 miles of these lines are in rural areas and subject to little or no federal or state safety oversight, despite sometimes running beside homes.
by John Light, September 2, 2014
In this July 16, 2013, photo, railroad oil tankers are lined up at the Port of Albany, in Albany, NY. (AP Photo/Mike Groll, File)
If you reside in the US, there’s around an eight percent chance that you live in an oil train’s blast zone. And there’s a fight going on at the state and federal levels, between monied interests and regulatory agencies, over efforts to ensure that these trains — which have shown a tendency to burst into flames — will be relatively safe.
The increased use of hydraulic fracturing — fracking — has made oil that was previously inaccessible available to drillers. The crude then has to make its way to refineries, and while the boom in pipeline projects has received quite a bit of attention, roughly 60 percent of it travels by rail.
On Friday, California legislators passed a bill that would require railroads to tell emergency officials when oil trains filled with explosive Bakken crude — oil from a particularly productive region in western North Dakota — would pass through the state. The law reflects growing concern, across America, about the dangers of these trains moving through dense communities, including Sacramento, California’s capital.
Oil tanker cars move along a web of routes that crisscross the United States. In 2013, about 400,000 cars made the journey, a 4,000 percent increase over the previous five years. The boost in oil cars has been so great that less lucrative industries are having trouble finding rail transport for their products. In March, General Mills announced that it had lost 62 days of production on such favorites as Cheerios because the trains that had shipped agricultural products were being leased by the fossil fuel industry.
Most oil reaches its destination without any problems, but as production has skyrocketed, the railroads have become increasingly taxed. Those who live near railways have noticed the uptick, with trains rumbling through towns much more frequently, and at much higher speeds.
Last July, a tanker train filled with North Dakota crude derailed in the middle of the night in Lac-Mégantic, a small Canadian town near the border with Maine; the resulting inferno killed 47 people. Since then, derailments in Casselton, North Dakota, and Lynchburg, Virginia, have led to evacuations. The Lac-Mégantic disaster spurred protests from fire chiefs and town officials who said that they were ill-equipped to deal with a possible derailment.
In the year since, officials have moved to formalize several safety measures. This July, the Obama administration proposed a plan that involves banning certain older tank cars, using better breaks on car, restricting speeds and possibly rerouting trains.
That first point, phasing out old tank cars, is a key area of contention. For the most part, the opposition isn’t coming from the railroads; it’s the oil companies that lease the tank cars that are fighting the new regulations. As Bloomberg Businessweek’s Matthew Philips explained earlier this summer:
It’s helpful to understand the three industries with something at stake here: railroads, energy companies, and tank-car manufacturers. The railroads own the tracks but not the tank cars or the oil that’s inside. The oil often belongs to big energy companies such as refiners or even trading firms that profit from buying it near the source—say, in North Dakota—and selling it elsewhere. These energy companies tend to lease the tank cars from large manufacturing companies or big lenders such as General Electric (GE) and CIT Group (CIT).
Although it is never their oil on board, the railroads usually end up in the headlines when something goes wrong. That’s why they have been eager for a rule to make energy companies use stronger tank cars. Meanwhile, the oil industry has been busy issuing studies trying to prove that the oil coming out of North Dakota is safe enough to travel in the existing tank cars. The energy lobby also thinks railroads need to do a better job of keeping the trains on the tracks. Tank-car manufacturers, meanwhile, simply want some clarity around what kind of cars they need to build.
Canada, following the Lac-Mégantic disaster, announced plans to phase out one older tank car that has been linked to several accidents over the next three years; the Obama administration proposal would do it in two.
But the oil industry doesn’t want that. Leading the charge is the American Petroleum Institute, an organization that, so far in 2014, has spent $4 million lobbying regulators and Congress. They’ve pushed back against labeling Bakken crude as more hazardous than other crude oil, even though many studies have found that it is.
Environmental groups blame this lobbying effort for several weaknesses in the proposed rules. For one, they would only apply to trains that have 20 or more carloads of Bakken crude. “If the rule is approved as drafted, it would still be legal to transport around 570,000 gallons (the equivalent of the fuel carried by seven Boeing 747s) of volatile Bakken crude in a train composed of 19 unsafe, [aging] tank cars—and none of the other aspects of the new rules, including routing, notification, train speed, and more would apply,” wrote Eric de Place of the sustainability think-tank Sightline Institute, who also criticized the proposal for not immediately banning older tankers.
And even if the regulations were to be put in place despite the API’s attempts to weaken them, there’s the distinct possibility that regulators will fall short. The government has often taken a hands-off approach in determining what gets shipped, and how — and in enforcing existing rules requiring that officials in the cities it passes through be informed that potentially hazardous shipments are coming. In These Times reported that government inspections to make sure railroads are properly labeling the product they are shipping (the Bakken crude was improperly labeled in the Lac-Mégantic disaster) are supposed to be unannounced, but are sometimes pre-arranged. Meanwhile, railroads are cutting back on the number of crew members manning trains, a move that some workers feel will lead to less safe travel.
“No one would permit an airliner to fly with just one pilot, even though they can fly themselves,” wrote John Previsich, the president of the Sheet Metal, Air, Rail and Transportation union’s transportation devision. “Trains, which cannot operate themselves, should be no different.”
John Light blogs and works on multimedia projects for Moyers & Company. Before joining the Moyers team, he was a public radio producer. His work has been supported by grants from The Nation Institute Investigative Fund and the Alfred I. duPont-Columbia Awards, among others. A New Jersey native, John studied history and film at Oberlin College and holds a master’s degree in journalism from Columbia University
“The most recent edition of Inspire magazine, March 2014, the online, English-language propaganda publication of [Al-Qaeda in the Arabian Peninsula], presents a full-page collage depicting varied images…in order to construct an explosive device,” reads Carbaugh’s affidavit.
“Among these images are a derailed passenger train and a partly covered note paper listing cities in the [U.S.] as well as the terms ‘Dakota’ and ‘Train crude oil.’”
Carbaugh also cited Osama bin Laden, the late Al-Qaeda international ring-leader, in his affidavit.
“Among the materials seized in the May 1, 2011, raid on Osama bin Laden’s compound in Abbottabad, Pakistan, were notes indicating interest in ‘tipping’ or ‘toppling’ trains — that is causing their derailment,” Carbaugh wrote.
Osama Bin Laden Compound Diagram; Image Credit: Wikimedia Commons
Apperson says both lawsuits were redundant because “we reiterated [to both companies] that we would not release the documents under state open records law until the court challenge is resolved.”
MDE filed a response arguing such in July 25 legal motions issued to CSX and Norfolk Southern.
Big Rail has used a similar approach in New Jersey, another state that has not yet publicly-disclosed oil-by-rail route information.
Lee Moore, a New Jersey Department of Law and Public Safety spokesman, explained why to The Record.
“Releasing all of the records, which include the rail lines on which Bakken crude oil is being transported, would pose a homeland security risk,” said Moore.
“Clocks and Windows”
William Larkin Jr., a Republican member of the New York Senate, believes the argument put forward in both Maryland and New Jersey is flawed on its face.
Photo Credit: Office of NY Sen. William J. Larkin, Jr. (R)
“I feel that both the U.S. Department of Transportation and a number of critics seemed to have missed the point, at least the larger point,” Larkin Jr. told the Poughkeepsie Journal on July 20. “[People] already know which rail lines oil companies are utilizing. Clocks and windows provide this information.”
Despite holes in its narrative about national security risks associated with disclosure of oil-by-rail routes, one measure some companies have taken is to create citizen volunteer security groups.
Norfolk Southern has a website called “Protect the Line,” in which they ask citizens to “Join the Force.” And BNSF has “Citizens for Rail Security,” which declares, “Communities play a key role in ensuring America’s rail network remains safe from terrorism and criminal activity.”
Photo Credit: “Citizens for Rail Security” Website Screenshot
The contradiction is readily apparent: communities can volunteer to keep the railroads safe, but they are not allowed to get information from the railroads about what they are keeping their communities safe from in the first place.
TSA: Asleep at the Wheel
The Transportation Safety Administration (TSA) oversees and implements rail safety as it pertains to preventing terrorist threats and attacks.
However, records obtained via a recent Freedom of Information request by EnergyWire reveal TSA is asleep at the wheel in this sphere. Worse, it has been for years.
“[A] Freedom of Information Act request from EnergyWire revealed that the agency never followed through with regulations despite an August 2008 deadline,” explains the story. “That means TSA neither keeps railroads’ security plans on file nor reviews them in any standardized fashion.”
It all comes down to priorities. According to EnergyWire’s investigation, a major funding gap exists between security for surface transportation (like rail) and aviation security.
“TSA’s budget for fiscal 2012 set aside $5.25 billion for aviation security, while devoting $135 million to surface transportation security across all modes,” wrote EnergyWire.
When looked at on the whole, a sober reality arises.
That is, while Big Rail trumpets terrorism threat risks in the legal arena to skirt transparency, the industry has concurrently done little to halt the very terrorism threats it claims a desire to stop.
Posted Aug 11, 2014 by Richard Heinberg
Confidential image via shutterstock.
Here’s The Script, in four despicable acts:
Act 1. Fracking boom goes bust as production from shale gas and tight oil wells stalls out and lurches into decline.
Act 2. Oil and gas industry loudly blames anti-fracking environmentalists and restrictive regulations.
Act 3. Congress rolls back environmental laws.
Act 4. Loosened regulations do little to boost actual oil and gas production, which continues to tank, but the industry wins the right to exploit marginal resources a little more cheaply than would otherwise have been the case.
You can bet The Script is being written in operational detail right now at corporate headquarters in Oklahoma City and Houston, and in the offices of PR firms in New York and Boston. Each of its elements has the inevitability of events in a Shakespearean tragedy.
It’s fairly clear that the fracking bubble will burst soon—almost certainly within the decade. Our ongoing analysis at Post Carbon Institute documents the high per-well decline rates (a typical well’s production drops 70% during the first year), the high variability of production potential within geological formations being tapped, and the dwindling number of remaining drilling sites in the few “sweet spots” that offer vaguely profitable drilling potential. Meanwhile, as the Energy Information Administration (EIA) has recently documented, the balance sheets of fracking companies are loaded with debt while surprisingly short on profits from sales of product—with real profits coming mostly from sales of assets (drilling leases).
The industry continues to claim that tight oil and shale gas are “game changers” and that these resources will last many decades if not centuries. Though the CEOs of companies engaged in shale gas and tight oil drilling are undoubtedly aware of what’s going on in their own balance sheets, hype is an essential part of their business model—which can be summarized as follows:
Step 1. Borrow money and use it to lease thousands of acres for drilling.
Step 2. Borrow more money and drill as many wells as you can, as quickly as you can.
Step 3. Tell everyone within shouting distance that this is just the beginning of a production boom that will continue for the remainder of our lives and the lives of our children, and that everyone who invests will get rich.
Step 4. Sell drilling leases to other (gullible) companies at a profit, raise funds through Initial Public Offerings or bond sales, and use the proceeds to hide financial losses from your drilling and production operations.
In the financial industry this would be recognized as a variation on the old “pump and dump” scam, yet the US government’s own EIA has just quietly confirmed that this is standard practice in the companies responsible for the “miraculous” US oil and gas renaissance that other departments of government are relying on for job creation projections, future tax revenues, and (reputed) energy export clout in the new cold war against Russia.
The bursting of the fracking bubble will have almost nothing to do with environmentalists, but they have deliberately and courageously put themselves in harm’s way. Fracking has terrible impacts on water, air, soil, human health, the welfare of livestock and wildlife, and the climate.
Hundreds of local anti-fracking groups have sprung up across the country in recent years, often started by ordinary citizens who suddenly found their wells fouled, their livestock sickened, or their children suffering from headaches and nosebleeds as a result of nearby fracking operations. Yet it has often been difficult for environmental scientists to document such impacts, due to deliberate efforts on the part of industry to impede studies and publications (for example, requiring non-disclosure agreements where complaints are met with cash settlements); indeed, industry spokespeople continue to deny that fracking is responsible for any environmental or human health problems. The industry despises environmentalists. But the real motivation for The Script is not petulance or revenge.
No, this is all business. Environmentalists will merely be handy scapegoats. Blaming environmentalists for the bursting of the fracking bubble will divert public attention from the industry’s own bad business practices. But even more usefully, telling receptive members of Congress that falling oil and gas production rates are due to anti-fracking, fear-mongering, business-hating enviros will set the stage for new and powerful calls to roll back local, state, and national regulations. Congress’s likely response: “Poor you! What can we do to help? How about some further exemptions to the Clean Air and Clean Water acts? Maybe a preemption of local fracking ordinances with a new industry-friendly national rule? Would you care for some drilling leases on millions of acres of federal land as an appetizer, while you’re waiting? They’re on the house.”
The industry has a lot to gain by portraying itself as the victim of powerful environmental interests. But will this gambit actually initiate a new round of oil and gas production growth? That’s remotely possible, since there are still billions of tons of low-grade hydrocarbon resources trapped beneath American soil. But don’t count on it. It takes money to drill, even if it’s other people’s money. As the quality of available resources declines, the amount of money needed to yield each new increment of energy from those resources grows. The industry will have to find and persuade a new flock of investors, which is likely to be difficult once shale gas and tight oil production is clearly headed south with an accelerating trend. Carrying loads of debt has been relatively easy due to ultra-low interest rates; if the Federal Reserve decides to let rates drift back upward, this alone could be a stake through the industry’s heart.
One way or another, the current fracking bubble is likely to constitute the last gasp of production growth for US oil and gas. The Script can’t solve all the industry’s problems. But it might yield a few consolation prizes.
What could keep The Script from succeeding? The industry’s PR offensive will be much less effective if mainstream media prominently and repeatedly publish good analyses of what’s going on in the geology of the fracking fields and the balance sheets of the drilling companies; and if public officials understand and talk about the real reasons for the coming stall and drop in US oil and gas production.
Both of these developments could in turn be facilitated by EIA doing its job. The Agency’s recent report was an excellent first step. The EIA works for the American people, not the oil and gas industry. Where the interests of the people and those of the industry diverge, it’s clear where the Agency’s loyalties should lie. Here’s an open plea to Agency officials: Please follow the evidence and tell public officials and the American people the real story of what’s happening as the national fracking boom turns to bust. You’re the authority everyone looks to.
