Category Archives: Lac-Mégantic

Rachel Maddow: Canada forcing new U.S. regulations; Obama must act decisively

Repost from MSNBC / The Rachel Maddow Show
[Editor: This is a lengthy video, (sorry about the commercial ad), but well worth your time.  After exploring oil pipeline spills, Maddow digs into the incredible increase in crude oil transport by rail, and the explosions and the need for quick action from the Obama administration.  Near the end, she interviews Wall Street Journal energy reporter Russell Gold, author of The Boom.    – RS]

Public safety at risk by oil train shipments

 Rachel Maddow, 05/02/2014

Russell Gold, senior energy reporter for the Wall Street Journal, talks with Rachel Maddow about the safety shortcomings inherent in shipping oil by rail, particularly the highly flammable Bakken crude.

Benicia Herald: Release date of Valero DEIR, background

Repost from The Benicia Herald
[Editor: Note in the concluding paragraphs: “Million said city staff and refinery employees have been in conversation as the review draft has been prepared….This is typical of any application…’We work with an applicant to get them on board.'”  This should not be news, nor surprising, but it underscores the impression among citizen-opponents of the project that our City is a willing partner with Valero.  It will be interesting to see what mitigations and conditions have been written into the DEIR so as not to stand as “deal breakers” for the “applicant.”  – RS]

Crude-by-Rail plan review to be released June 10

May 1, 2014 by Donna Beth Weilenman

The draft of the Environmental Impact Report (EIR) being prepared for the Valero Crude-by-Rail Project will be released by June 10, Principal Planner Amy Million announced Thursday.

The long-awaited document will be given a 45-day public review, during which people may submit their comments, she said.

That review period ends July 25.

“We have been notified that the City’s independent evaluation and Draft Environmental Impact Review (DEIR) of Valero’s Crude-by-Rail project will be available for public comment by June 10,” Chris Howe, Benicia Valero Refinery director of health, safety, environment and government affairs, said in an email Thursday.

Those interested will be able to read the draft EIR on the city’s website, www.ci.benicia.ca.us, by clicking on the Department of Community Development, Planning and Current Projects links under “City Departments.”

They also will be able to examine paper copies at the Community Development Department desk at City Hall and at Benicia Public Library, Million said.

Should a member of the public request it, she said, the city would make CD copies available as well.

The Planning Commission will accept public comment on the matter during a hearing at its July 12 meeting at City Hall, Million said. However, no vote will be cast that night, she said.

Once the comments are received, the city will prepare its response to those observations.

Those comments and any changes to the environmental review will be incorporated into the draft when the city produces the final version of the EIR. “There could be additional information,” Million said.

Should those comments and responses mean the draft needs to be “substantially modified,” the review would be rewritten and undergo a complete recirculation, she said.

Otherwise, if the comments and modifications aren’t considered substantial, the final version of the review would be sent to the Planning Commission for its review and vote as part of the refinery’s use permit request for its rail project.

The commission’s decision would be final, unless an appeal is filed, Million said. Should that happen, the City Council would hear the appeal and render a decision, she said.

The refinery applied for a use permit early in 2013 to extend Union Pacific Railroad’s tracks into Valero property so crude from North American sources can be brought into the plant.

Refinery officials in their application stated that the crude brought by train would not be in addition to the oil that arrives by tanker ships or pipelines, but would be substitutions. Up to 70,000 barrels would arrive daily by rail car, supplanting the same volume Valero currently receives by other methods.

Valero officials, declining to provide what they called proprietary information to competitors, have been reluctant to say where the crude is being drilled. Unlike some oil companies, Valero drills no wells of its own, but buys its crude.

Various company officials, speaking on multiple occasions, have stressed that the raw product would be similar to what it receives at its own local port.

Some opponents to the project, however, have warned that the rail cars would bring in Canadian tar sands, which is a heavier substance made “sour” by a larger percentage of sulfur. Others have suggested the source would be the North American Bakken oil fields, described as much lighter and sweeter.

Bakken crude also has a lower flash point than many oils, and has been associated with several explosions that have occurred after train car derailments.

The most recent accident happened Wednesday in downtown Lynchburg, Va., after breaches apparently developed on some of the crude-carrying rail cars on a CSX train.

A fireball shot 200 feet into the air, according to some observers. Oil was reported leaking into the James River.

Though no injuries were reported initially, at least 300 people were evacuated and neighboring cities were told to switch to alternate water sources, according to reports describing the incident.

It was the latest in a series of fiery accidents on crude-carrying trains, though none is reported to involve Union Pacific, a company that, along with the Valero refinery, continues to stress its safety record. North American rail delivery of crude has increased dramatically in the last couple of years. In the third quarter of 2013 alone, trains delivered 66 million barrels of crude, much from the Bakken fields of North Dakota.

That amounts to approximately 900 percent of what was delivered during all of 2008.

Last July, 47 people in Lac-Megantic, Quebec, Canada, died when an unmanned parked oil tanker train came loose, derailed and caught fire. People were evacuated in Edmonton, Alberta, last October after another derailment.

Thousands of barrels of oil contaminated an Alabama marshland after an oil train spill last November. A month later, two trains in Casselton, N.D., collided. One carried soybeans; the other, a BNSF train, spilled about 400,000 gallons of crude when 18 tank cars  ruptured and caught fire.

In February, BNSF announced it was seeking vendors to deliver up to 5,000 tanker cars that are stronger than those currently in use. That’s an unusual move for a large carrier, which usually requires clients to buy or lease rail cars. The railroad said it would use the reinforced cars not only for crude but also for carrying ethanol.

At a March public meeting organized by its community advisory panel, Valero officials said the refinery also would use the stronger cars to bring crude to Benicia.

Unlike the U.S. Department of Transportation, Transport Canada announced April 23 that it would remove Department of Transportation-111 unpressurized tank cars from what it called “dangerous service,” saying they didn’t meet standards for carrying dangerous fuel.

In the United States, railroads are federally regulated, a fact that has worried some residents when they learn that state, county and city officials are limited in the controls they can impose on that industry.

The U.S. National Transportation Safety Board has recommended that federal regulators upgrade requirements for oil-carrying cars, most of which are the DOT-111s.

The Association of American Railroads, freight carriers and Amtrak, has endorsed the upgrade. DOT officials have said they have met resistance to that change from those in the oil industry.

In the interim, the AAR and U.S. Transportation Secretary Anthony Foxx have announced a series of voluntary operating practices for crude-by-rail shipments that began last February. By April, rail lines promised increased track inspections and upgraded braking systems on trains with 20 or more carloads of crude oil.

Railroads said by July they would be using the Rail Corridor Risk Management System to determine which routes would be safer for trains with 20 or more crude-carrying cars, reduce those trains’ speeds and install more wheel-bearing detectors, among other measures.

Originally, Valero employees had hoped the Crude-by-Rail Project would be wrapped up within a year of filing the application in February 2013.

But once the project was announced, City Hall received heavy public input.

Opponents that included both residents and parties outside the city expressed concern about hazards associated with rail delivery of crude, the trains’ impact on traffic near Interstate 680 and inside Benicia Industrial Park, dangers to nearby environmentally sensitive wetlands, the threat posed to Benicia’s neighbors from explosions and spills, and the cumulative impact of rail delivery of crude to other Bay Area refineries.

Proponents said the project would create construction jobs while it was being built, add jobs to Valero once it was complete and equip the local refinery to compete with industry rivals.

The project has received support from Valero’s neighbors, including AMPORTS, which operates the Port of Benicia, and members of the board of the Benicia Chamber of Commerce.

Residents and others packed several city meetings on the project, including a July 11, 2013, Planning Commission meeting at which 31 people spoke.

During such hearings, every chair in the Council chamber has been filled; people lined walls and sat on the floor, waiting to speak or to hear what others said.

Speakers usually were split, with about half speaking passionately in favor of the project and the same number just as determined in their opposition.

The city initially issued a notice of intent to adopt a mitigated negative declaration for the project, which launched a 30-day comment period that ended July 1, 2013. During that time, the city received 34 written comments, some of which were substantial in length. After the closing date, 27 more written comments arrived; comments continue to be sent to City Hall.

The Benicia-based Good Neighbor Steering Committee organized a meeting last year at which a variety of speakers opposed to the project, including Diane Bailey, senior scientist for the Natural Resources Defense Council, described hazards associated with the import of tar sands crude from Canada.

Because of the volume of comments, the city notified the Office of Planning and Research, Sacramento, Aug. 9, 2013, that it would prepare an Environmental Impact Report, a much lengthier examination than the mitigated negative declaration, to comply with California Environmental Protection Act requirements.

Valero officials said they concurred with the decision.

“We consulted with city staff and agreed to work with them to prepare an Environmental Impact Report (EIR) for the Crude-by-Rail Project,” Sue Fisher Jones, Valero Benicia Refinery public affairs manager, said at the time.

Even after the city announced its intent to have the have the EIR written, proponents and opponents continued to have meetings about the project.

Bailey returned to Benicia last March for a meeting organized by the Steering Committee of Benicians for a Safe and Healthy Community. Joining her were Andres Soto, who has organized Communities for a Better Environment that opposes the increased delivery of crude by rail in the Bay Area; Damien Luzzo of Davis, who expressed worries about dangers to cities such rail cars would pass or go through; and, by video, Marilaine Savard, a resident of Lac-Megantic who described how the explosion devastated her home town.

At Valero’s own public meeting in March, speakers included refinery safety officers and environmental managers; Liisa Lawson Stark, director  Union Pacific public affairs; and Phillip Daum, an engineer who has participated in investigations of recent rail explosions, including the one at Lac-Megantic.

Valero Benicia Refinery officials won’t get to see the draft EIR any sooner than anyone else, Million said.

“We will receive the document at the same time it is available to the public,” Howe concurred. “We will have the same opportunity to provide comments as anyone else during the public comment period.”

He said his company anticipates arranging another public meeting once the draft EIR is released, and “the details for the meeting will be determined” then.

Million said city staff and refinery employes have been in conversation as the review draft has been prepared.

“They have been an integral part, because they have in-house expertise to answer technical questions,” she said. “They have a grasp of what the document says.”

This is typical of any application, she said, and Valero isn’t being treated differently from the way another individual or business that applies for a use permit or variance would be treated.

“We work with an applicant to get them on board,” she said of the way her department interacts with anyone filing an application.

Applicants also are given “a head’s up” about an environmental report’s developments, she said, adding that some applicants decide certain conditions are deal breakers.

The mitigations and conditions of approval for permits “are what the city feels is needed,” she said. “Ultimately, the comfort level is with the city.”

The legal quagmire of Lac-Mégantic

Repost from The Montreal Gazette

Plans are finally taking shape for financial compensation of derailment victims

By Monique Beaudin, Gazette environment reporter April 20, 2014
The legal quagmire of Lac-Mégantic
The light fades over the Appalachian Mountains in Lac-Mégantic a couple of weeks after the train derailment in July 2013. Eight months later, plans for compensation are coming together. Photograph by: Allen McInnis , Montreal Gazette

Nine months after a runaway oil train derailed in Lac-Mégantic, killing 47 people and destroying a large chunk of the town, a plan for financially compensating disaster victims is taking shape.

Judges in Quebec and Maine have approved a joint cross-border process for victims of the accident to file claims against Montreal, Maine and Atlantic Railway and its Canadian operations, Montreal, Maine and Atlantic Canada. The two companies have been under bankruptcy protection since August.

Thousands of claims related to the derailment are expected to be filed against MMA. Public information meetings on the financial-claims process are to begin in Lac-Mégantic next week. Claims must be filed by the middle of June.

People who lost family members, homes and businesses have turned to Canadian and American courts for financial compensation, but the process has been slow. The estates of several of the 47 people killed on July 6 have filed wrongful-death lawsuits in the U.S. Lawyers have also begun proceedings to bring a class action in Quebec. Quebec has already ordered six companies to clean up and decontaminate the town, a move that is facing a legal challenge.

The American lawyer overseeing MMA’s U.S. bankruptcy proceedings himself admits figuring out how victims will be compensated is “quite complicated”.

One of the biggest questions is who has the money to pay for the accident — compensating victims and secured creditors, covering cleanup costs and paying damages that several companies are claiming as a result of the derailment.

MMA was sold in January to New York-based Railway Acquisitions Holdings, for $14.25 million, less than what it owes its secured creditors.

That leaves a $25-million insurance policy and the possibility of a settlement fund composed of contributions from several companies targeted by legal action after the accident, said Robert Keach, MMA’s U.S. Chapter 11 trustee.

Another possible source of financial compensation for victims could come from a lawsuit Keach filed against World Fuel Services, Western Petroleum and Petroleum Transport Solutions, the companies that arranged for the shipment of the crude oil on the train. Keach argued they were to blame for the accident since the oil had been mislabelled as being less volatile than it actually was.

New York-based lawyer Luc Despins is counsel to a victims’ committee made up of residents, the town of Lac-Mégantic and the Quebec government. The committee represents victims’ interests in MMA’s American bankruptcy proceedings, offering input on issues like the compensation process, he said.

Despins said the committee’s goal is to get as much money as possible to the Lac-Mégantic victims as quickly as possible. But, he cautioned, not all claims filed may be accepted.

“If someone agrees their house was worth $600,000 and they got the full $600,000 from their insurance company, and that’s their only claim, they should not be recovering twice, this is not a lottery,” he said. “They may have other claims, but as far as the house I gave as an example is concerned, they can’t recover twice.” The courts will decide who has a valid claim, Despins said.

LOGISTICS: WHAT’S NEXT FOR VICTIMS OF THE DISASTER

Victims of the accident have until June 13 at 5 p.m. to file a proof of claim against Montreal, Maine and Atlantic.

Public information meetings on the claims process are to be held in Lac-Mégantic between April 22 and May 5, and assistance will be provided to help people complete the claims forms, according to an order issued by Quebec Superior Court. Victims who do not file a claims form by June 13 will not be permitted to participate in the Canadian or U.S. bankruptcy proceedings or receive any payment made available in those proceedings.

Claims forms and information about the claims process are posted on the website of Montreal-based Richter Advisory Group, the company’s Canadian bankruptcy monitor, at www.richter.ca under “Insolvency Cases” or  http://bit.ly/mmamonitor.

LEGAL ACTIONS INVOLVING VICTIMS OF LAC-MÉGANTIC

A request has been filed to approve a class-action lawsuit in Quebec against MMA, World Fuel services, Irving Oil, Canadian Pacific, the federal government and others. More than 1,550 people have registered with the class action so far.

A committee of three Lac-Mégantic residents, a representative of the Quebec government and the town of Lac-Mégantic represents victims’ interests in MMA’s U.S. bankruptcy proceedings.

The estates of 19 people killed in the Lac-Mégantic train derailment filed wrongful-death lawsuits in Illinois, naming several defendants, including MMA, company chairman Edward Burkhardt, MMA’s parent company Rail World, and World Fuel Services, which arranged for the transportation of the crude oil on the train. All except two of those lawsuits have been withdrawn while American courts decide where they will be heard. A law firm representing the estates says it plans to appeal a recent decision from a U.S. federal judge ordering the cases transferred to Maine, where MMA’s bankruptcy proceedings are being held. One of the issues at play is the amount of money that could be awarded as damages. Illinois has no cap on such payments, while Maine limits them to $500,000 in wrongful-death cases.

POSSIBLE SOURCES OF FINANCIAL COMPENSATION

A $25-million insurance policy MMA has with XL Insurance. Many people and companies are interested in the insurance policy. They include:

– Victims of the Lac-Mégantic derailment, such as the families of people killed in the accident, those who were injured or those who suffered losses to their businesses or homes.

– CIT Group, a company that owned some of the locomotives and tank cars involved in the accident. CIT has said it plans to settle any claims against it from wrongful-death lawsuits tied to the derailment with the XL insurance policy.

– MMA chairman Edward Burkhardt, who has been named in several legal actions linked to the derailment, argued in U.S. bankruptcy court that he is covered by the policy.

Settlements from legal action taken by MMA’s bankruptcy trustee against World Fuel Services.

The creation of a settlement fund made up of financial contributions from companies that may be liable for the accident.

TIMELINE OF THE LEGAL FALLOUT

July 6, 2013: A 72-car oil train pulled by five locomotives unexpectedly rolls down railway tracks into the town of Lac-Mégantic. Most of the cars derail, leading to explosions and a fire that kills 47 people and destroys much of the downtown core. Nearly 6 million litres of crude oil spill in the accident.

July 15, 2013: Lac-Mégantic lawyer Daniel Larochelle and two other law firms file a request in Quebec Court to begin class action proceedings against MMA and 14 other companies and individuals.

July 22, 2013: Annick Roy files a wrongful-death lawsuit in Illinois court on behalf of the estate of Jean-Guy Veilleux and their daughter. Veilleux was killed July 6.

Aug. 7, 2013: MMA files for bankruptcy protection in Canada and the U.S.

Aug. 14, 2013: A total of 19 wrongful-death cases have been filed in Illinois court.

Aug. 22, 2013: The Quebec government announces the creation of a victims’ committee to represent Lac-Mégantic residents, the government and the town in the U.S. bankruptcy proceedings.

Jan 23, 2014: Bankruptcy judges in Canada and the U.S. approve the sale of MMA to Railway Acquisitions Holdings of New York for $14.25 million U.S.

Feb. 12, 2014: Lawyers for the proposed Quebec class action add Transport Canada to the list of more than 50 organizations and people it plans to sue.

Feb. 26, 2014: A joint Canada-U.S. bankruptcy meeting between creditors tries to speed up the pace of the claims process.

April 2014: The MMA sale to RAH is expected to be finalized.

June 13, 2014: This is the proposed deadline for victims and creditors to file claims against MMA in the Canadian and U.S. bankruptcy proceedings.

WHAT’S HAPPENING WITH MONTREAL, MAINE AND ATLANTIC

The railway company whose runaway oil train derailed in Lac-Mégantic on July 6, 2013. It is in the process of being sold to Railway Acquisition Holdings, a New York City -based company, for $14.25 million U.S. RAH plans to change the name of the company to Central Maine and Quebec Railway, and offer rail service on MMA’s 800 kilometres of tracks in the two countries.

RAH is acquiring two companies:

Montreal, Maine and Atlantic Railway

  • Parent company of Montreal, Maine and Atlantic Canada.
  • Operates a shortline railroad in Vermont and Maine.
  • Under Chapter 11 bankruptcy protection since August.

Montreal, Maine and Atlantic Canada

  • Railway operating in Quebec.
  • Under bankruptcy protection since August.

All about Bakken Crude, by Guy Cooper, Martinez Gazette

Repost from The Martinez Gazette

Martinez Environmental Group: The oil, pick your poison

By Guy Cooper | April 20, 2014

Two types of North American crude will roll through our towns. There’s the Bakken crude fractured from the shale beds of North Dakota and the oil/tar sand derivatives rent from the wilds of Alberta, Canada. The former has the potential to vaporize you and your neighborhood.  The latter can slowly render your land and water and body uninhabitable.

It was Bakken crude that blew up the town of Lac-Mégantic, Quebec, last July, exploded and poisoned the wetlands of Aliceville, Ala., in November, and just missed annihilating the town of Casselton, N.D., in December. That’s just a sample.

Lac-Mégantic was the eye opener. An improperly equipped and under-staffed 70-car tanker train heading east from the oil fields of Dakota was left parked on the main line above the town with an incorrectly set brake. In the early morning hours, the train broke free and careened down the hill, derailing in the center of town. OK. A train derailment due to human error.  An unfortunate accident. One would expect a nasty oil spill and big clean up to follow.

That’s not what happened. The train exploded in concussive fireballs that flattened the downtown and instantly killed 47 people. Aerial images show an area the size of downtown Martinez reduced to rubble. Flaming oil flows poured like lava from the burning train into the nearby river and lake, cooling into an intractable underwater toxic waste deposit. It took four days just to extinguish the fires. Who knows how long it will take to clean up the mess. And, of course, 47 lives lost.  The town will never be the same.

That tragic episode got people’s attention. Crude oil is not supposed to explode. It was first thought an anomaly. Maybe the train crashed into tanks of propane. That was disproved. Then there were the pools of carcinogenic benzene fire crews found themselves slogging through. Not normal.

Well, it won’t happen again. Then it did, at Aliceville and Casselton.

What was this stuff that reacted in such an uncharacteristic way? People living beside the tracks wanted to know. Emergency responders wanted to know. Local officials and the Canadian and U.S. government agencies responsible for public safety, train regulation and hazardous materials handling sought answers. Investigations and regulatory hearings commenced. About the only people not publicly showing a lot of interest, besides issues of liability, were the companies responsible for the oil production, movement and refining. Accidents happen. Normal precautions were taken. Regulations were followed. We know what we’re doing. Let’s get the PR, lawyers and lobbyist guys on this.

In response, Grant Robertson of the Toronto Globe and Mail visited the Bakken oil fields. An oil worker invited him in and produced a mason jar of fresh-out-of-the-ground Bakken crude.  “Smells like gasoline, doesn’t it? Some guys around here pour it directly in their trucks.”  The local joke is if most crude looks like a pint of Guinness, Bakken looks like Miller Lite.

The Chemical Engineer, an industry source, reported the results of chemical analysis by Canada’s Transportation Safety Board (TSB) that largely corroborated Mr. Robertson’s hands-on experience. Flashpoint refers to the temperature at which the crude gives off enough vapor to ignite. The lower the flashpoint, the more explosive the crude. The TSB results indicated a flashpoint from Lac-Mégantic samples so low that the measuring machine could only show that it was less than -35 C. The report concluded that “It is apparent that the occurrence crude oil’s flashpoint is similar to that of unleaded gasoline.”

High vapor pressure was also found, another explosive indicator. As I understand it, vapor pressure suggests the combustible gas content of an oil. The refiner Tesoro reported in early 2013 a reading of 12 psi for Bakken. Marathon Oil reported readings of 9.7 and 8.75 between 2010 and 2013, then in 2014 (after the explosions of 2013, just saying …), reported a 5.94 result.  Analysts consider that low reading an aberration, but even that number is about twice the average of most crude oils.

This is the problem. The Lac-Mégantic train cargo was assigned a packing group III classification by the largely self-regulated oil producers based on an either missed or deliberately misleading evaluation of the real volatility. Fact is, the higher the classification number, the lower the cost of transport. Class III is considered low risk. A more realistic classification I or II would have required more train staffing, beefier cars, enhanced disaster planning and other safeguards.  In other words, there would have been someone else to double check on the brake and the train could not have been left unattended on the main line while the sole engineer went five miles away to a hotel for the night. A spot check of trucks transporting Bakken from the well-heads to rail-loading facilities found a similarly pervasive cargo mis-classification. The fact is, that left to their own devices, without adequate independent regulatory oversight, oil producers, transporters and refiners are invariably going to pick the lowest-cost strategy to bring their product to market. This is the current state of the surrounding industry we are entrusting with our safety. Not a good idea.