Repost from The Oregonian
[Editor – Significant quote: “a majority of Vancouver City Council members recently announced they opposed the $110 million terminal, citing not its potential environmental impacts, but their concern that the project may endanger the city’s 165,000 residents.”  – RS]

Fiery oil train accidents heighten scrutiny of major Vancouver, WA rail terminal

 

Building the largest oil-by-rail terminal in the Pacific Northwest was never going to escape controversy, not in a region with a robust environmental lobby.

But for a planned terminal in Vancouver, Wash., a series of fiery oil train explosions has expanded opposition and heightened scrutiny of a project promising to be a bellwether for a growing number of facilities in development along the West Coast.

Tesoro Corp., a major oil refiner, and Savage Cos., a supply chain logistics manager, are proposing to bring four loaded oil trains a day through the Columbia River Gorge into Vancouver, where crude would be loaded on barges bound for West Coast refineries. The terminal could process 131 million barrels of oil annually, seven times more than trains hauled through Washington last year.

Trains and trade are an indelible part of Vancouver’s identity. Roughly 75 trains move daily through the city, which traces its history to being a hub of the Pacific Northwest’s 19th century fur trade.

But a majority of Vancouver City Council members recently announced they opposed the $110 million terminal, citing not its potential environmental impacts, but their concern that the project may endanger the city’s 165,000 residents.

“We’re pushing a margin of safety that we’re not ready to deal with,” Councilman Larry J. Smith, a retired Army infantryman, said at a recent meeting. “The accidents sort of prove that. We have a ways to go to prove that we’re safe and secure and taking care of our citizens.”

Oil trains today aren’t as safe as they could be. Most tank cars moving oil are outdated models. While the federal government is tightening safety standards, new rules aren’t expected before late 2014. Upgrading the country’s rail fleet could take as long as a decade.

Meanwhile, the characteristics of the North Dakota oil moving by rail remain poorly understood. Before oil trains exploded, crude wasn’t thought to be especially flammable. But samples show that oil moving through Vancouver into Oregon is saturated with more propane and other flammable gases than comparable types of crude.

Those uncertainties led the Port of Portland to reject crude-by-rail terminals until safety gaps are addressed. But in Vancouver, the port has pushed ahead, with top leaders saying they believe stronger safety standards will be place by the time the project – worth $45 million over 10 years in lease revenue to the port – finishes a state permitting process expected to take a year or longer.

The port had a warning that the project would be more controversial than it expected. The agency approved its lease with Tesoro-Savage less than three weeks after the first oil train accident, which killed 47 people in Quebec last July.

After that accident, port and company representatives said something similar couldn’t happen in Vancouver. The Quebec accident, they said, happened on a short-line railroad with different standards than the main-line track that the BNSF Railway Co. operates in Vancouver. That was reinforced when a second accident happened on a short-line operator’s track in Alabama in November.

Then came a third oil train explosion in December – on a main line BNSF operates in North Dakota.

A string of train accidents involving crude oil from North Dakota have created massive fireballs, including this one outside Casselton, N.D., in December 2013. Bruce Crummy/The Associated Press

Todd Coleman, the Port of Vancouver’s executive director, said his agency may have approached the project differently and gotten safety questions answered up front if it had known more accidents would follow. But Coleman said he is still confident that the project’s state permitting process will make it as safe as it can be.

In the meantime, Coleman has traveled to Washington, D.C., advocating for regulators, railroads and Tesoro-Savage to improve oil train safety.

The port recently commissioned a safety study that concluded the risks of an oil train derailment on its track are very low and recommended $500,000 in rail improvements the agency pledged to make. The study didn’t examine the chances of human-caused errors, the leading cause of rail accidents.

And the port has yet to approve a separate Tesoro-Savage safety plan, which Coleman said could “conceivably” allow the port to require tighter safeguards if federal regulations don’t catch up.

“It’s unfortunate incidents that have happened, absolutely,” Coleman said. “But it will make it safer in the future.”

That hasn’t assuaged fears among people Jack Burkman talks to. The three-term Vancouver city councilman and other elected officials say they’ve been barraged by questions from worried residents.

“I’m stopped everywhere in town by people I never would’ve expected to be concerned about this,” said Burkman, a retired engineer. “There’s too much lack of understanding. While the likelihood of an accident may be really, really low, the problems we’ve seen have been horrific. That’s what people are having a hard time wrapping their arms around.”

The project, which could employ 120, is clearly important to Tesoro. After City Council members announced last month that they would oppose the project, Tesoro executives immediately flew into town to meet with business leaders and the local newspaper to press their case.

Loading oil on barges in Vancouver would allow the company to move North Dakota crude to its California refineries for less than the full rail journey would cost. It could export Canadian crude or move U.S.-produced crude if the oil industry successfully lobbies to lift a ban on exporting domestic supplies.

A Wall Street analyst who follows Tesoro said the terminal faces a tougher permitting process amid rising opposition to crude-by-rail terminals.

“It’s a bit ahead of other projects and it’s a bit bigger, so it’s a bit more of an indicator relative to these smaller projects about whether they get approved,” said Allen Good, a Morningstar analyst. “If it does get stopped, it will give a lot of momentum to groups opposing other crude-by-rail facilities.”

One of the project’s most prominent opponents is Barry Cain, a developer working on a $1 billion waterfront redevelopment of a former Boise Cascade paper mill. He’s an unlikely opponent: A businessman who praises the domestic crude boom for helping the United States reduce its dependency on foreign oil.

A rendering of the waterfront redevelopment project that developer Barry Cain is working on in Vancouver, Wash.Rob Davis/The Oregonian

Three oil trains a day already move past Cain’s development site, on the key BNSF line that connects to refineries in northern Washington. But the terminal would bring four more. Cain said he worries that fear about exploding oil trains will damage property values, make financing or insurance harder to find and dissuade potential development partners.

“We don’t want to lead any fight,” Cain said of his development partners. “We’re all businesspeople, we’re not the type who’d normally be opposed to this. It’s good to reduce our dependency on foreign oil. But this affects the project we’re working on.”

Ultimately, Washington Gov. Jay Inslee will have to approve or reject the project if it clears a quasi-judicial process being led by Washington’s Energy Facility Site Evaluation Council. Inslee has not taken any position on it.