Category Archives: Oil industry lobby

Canadian regulation, Crude By Rail, Derailment, Federal Regulation (U.S.), Oil Industry, Oil industry lobby, Train length, Train speed, Train weight

Are Oil Trains Just Too Heavy? No Regulations, No Weigh To Know

Repost from DeSmogBlog
[Editor: Apologies for the ad content. My retired volunteer budget won’t allow the $5 per DeSmog article for no ads.  🙁   – RS]

Are Oil Trains Just Too Heavy? No Regulations, No Weigh To Know

The cause of the most recent bomb train derailment and fire in Mosier, OR has been determined to be lag bolts that had sheared off resulting in the derailment. This once again raises concerns that the unit trains of oil are putting too much stress on the tracks due to their excessive weight and length. There… Continue reading Are Oil Trains Just Too Heavy? No Regulations, No Weigh To Know →

Bakken Crude, Canadian regulation, Crude By Rail, Derailment, Explosion, Federal Regulation (U.S.), Oil Industry, Oil industry lobby, Oil stabilization, Phillips 66, Rail industry, Rail industry lobby, San Luis Obispo County, Santa Maria Refinery

The Crude Oil “Bomb Train” Story: Profits Over Safety

Repost from DeSmogBlog

The Crude Oil “Bomb Train” Story: Profits Over Safety

By Justin Mikulka • Friday, May 20, 2016 – 10:42

“I would agree with the opponents. This is not about saving jobs…This is about profits. But gee, what is wrong with profits?”

Those were the words of San Luis Obispo County Planning Commissioner Jim Irving, explaining why he was voting for a project to build a rail spur to the Phillips 66 Santa Maria Refinery so that the refinery can receive oil by rail.

It is a safe bet that Jim Irving hasn’t been to Lac-Megantic, where almost three years ago a very profitable oil train derailed and exploded in the middle of downtown. The immediate damage was 47 lives lost, a massive oil spill, and the burning and contamination of the town center.

Nearly three years later, the downtown has yet to be rebuilt. And as we reported on DeSmog, there were many reasons the Lac-Megantic accident occurred. Averting any one of them could have prevented the accident. All were the result of corporate cost-cutting that put profits ahead of safety.

Also to blame were government regulators who allowed corporations to not invest in safety.

The locomotive engine fire that was the initial cause of the event? Faulty cost-saving repair.

The fact that regulators allowed full oil trains to be parked on a hill above a town, unmanned? Staffing cost savings for railroads.

The “19th century technology” air brakes that failed? More profits over safety.

Poor or non-existent employee training? More savings.

And how about those government regulators’ role in this? How could all of these moves to put profits over safety be allowed? The Globe and Mail looked at all the evidence and pointed the finger directly at the regulators.

There is one federal body that is ultimately responsible for the oversight of Canada’s railways: Transport Canada. The Lac-Mégantic disaster falls squarely at its feet.

It was recently revealed that the government of Canada contributed $75 million to the fund for the victims of Lac-Megantic to avoid further litigation. If they weren’t at fault, why would they pay up?

If you want to ask why allowing the pursuit of profits above all other concerns is a problem —  Lac-Megantic is your answer.

Profits Over Safety: The Rule, Not the Exception

The old air braking system that was involved in Lac-Megantic is the standard for all oil trains. There are modern braking systems known as electronically controlled pneumatic (ECP) brakes that have been described as “a quantum improvement in rail safety” by Joseph Boardman, the former head of the Federal Railroad Administration. But this quantum improvement has not been implemented.

Cynthia Quarterman was in charge of the Pipeline and Hazardous Materials Safety Administration for the majority of the multi-year process when the new oil-by-rail regulations were developed, and based on that process, she believes ECP brakes are a top priority.

“The more I think about it, the more I think that the ECP brakes may be more important than the tank car itself,” Quarterman told USA Today. “Because it would stop the pileup of the cars when there’s a derailment or when there’s a need to brake in a very quick fashion.”

So why aren’t ECP brakes required on oil trains? As DeSmog reported in March of 2015, the industry explained its opposition to ECP brakes in a presentation to regulators, and the opposition included the argument that safer brakes would be “too costly.”

And of course there is the issue of the tank cars used to move the dangerous oil. When the fracking boom happened in North Dakota and there weren’t pipelines to move the oil, the industry quickly built rail loading facilities.

Did the industry also build new safe tank cars to move the oil? No. They began filling the readily available DOT-111 tank cars with oil and started rolling them across North America through big cities and small towns — including Lac-Megantic.

The problem was that the DOT-111s were not designed to move flammable materials like Bakken crude oil, but were made to move things like molasses and corn oil.

But there was money to be made – so it was full-speed ahead with the DOT-111s for Bakken crude.

Shipping Bakken crude oil in DOT-111s has been called “an unacceptable public risk” by a member of the National Transportation Safety Board. But it continues anyway because it is profitable. Gee, what could go wrong with that?

Bomb trains.

The oil could be made safe to transport through a process known as stabilization. But that would require building stabilizing infrastructure in places like North Dakota. That would cut into profits. So it hasn’t been done.

In testimony to the North Dakota Industrial Commission about the proposed regulations to requireoil stabilization,Tony Lucero of oil producer Enerplus explained the reality:

“The flammable characteristics of our product are actually a big piece of why this product is so valuable. That is why we can make these very valuable products like gasoline and jet fuel.”

And so there are no regulations to stabilize the oil because it would be less profitable.

What is wrong with profits? Dangerous oil in unsafe cars with 19th century technology brakes traveling though many North American cities is a good starting point to answer that question.

Profits Buy Plenty of Lobbyists

In January, Sen. Elizabeth Warren (D-MA) released the report “Rigged Justice – How Weak Enforcement Lets Corporate Offenders Off Easy” detailing what is known as regulatory capture — essentially using corporate profits to buy influence over regulators responsible for improving safety. Like the ones who the Globe and Mail said failed the people of Lac-Megantic.

“When it comes to undue industry influence, our rulemaking process is broken from start to finish,” Warrenexplained in March while discussing the report. “At every stage – from the months before a rule is proposed to the final decision of a court hearing a challenge to that rule – the existing process is loaded with opportunities for powerful industry groups to tilt the scales in their favor.”

The math is simple. It is much cheaper to buy lobbyists and influence than it is to invest in safety. And that is what is wrong with an approach that puts the pursuit of profits above all else.

We Can’t Take A Chance That Things Will Be Alright

While the oil and rail industries’ pursuit of profits was championed in California on Monday, a similar discussion was happening on the East Coast in Albany, NY. Albany is the largest oil hub on the East Coast and all of that oil comes by rail.

Now there is a proposal to build a pipeline from Albany to the seaport in Linden, NJ. The pipeline would be fed by oil trains that would arrive in Albany. While it was mostly a symbolic vote — unlike the one in California — the Albany city council voted to oppose the Pilgrim Pipeline this week.

In the public comment period, local Pastor McKinley Johnson, whose church is across the highway from the oil train facility, explained his opposition to the pipeline and more oil trains.

“It is time for us to take a stand,” said Johnson “We can’t take a chance that things will be alright.”

And he is right that this is about taking chances. The oil and rail industries are gambling that an event like Lac-Megantic won’t happen in a big city like Chicago — knowing full well that the proper safety measures are not in place to prevent it.

So far they have been really lucky — and very profitable.

This past weekend, Albany was the site of one of the worldwide Break Free From Fossil Fuels events, and the issue of the oil “bomb trains” was front and center. City council member Vivian Kornegay, who represents the community that lives directly alongside the rail yards where the oil is offloaded, was one of the featured speakers.

She repeatedly made the point that her constituents were taking all of the risk with the trains and getting no reward, saying, “We assume 100% of the risk…and miniscule benefits.”

If you are an oil company in pursuit of profits, that is exactly how you want it.


Vivian Kornegay addresses Break Free rally in Albany, NY   Photo credit: Justin Mikulka

Blog Image Credit: Justin Mikulka

Biofuels, California Air Resources Board (CARB), California Energy Commission, California Regulation, Cap-and-trade, Clean fuel standard, Climate Change, Ethanol, Global warming, Low carbon fuel standard, Oil Industry, Oil industry lobby

Sacramento: Oil firms challenge state over clean fuel

Repost from SFGate

Clean fuels shaping up as fight of the year in Sacramento

New battle lines drawn in fight over low-carbon policy
By Laurel Rosenhall, CALmatters, Mar 5, 2016 Updated: 3/6/16 3:33pm
A pending fight over low-carbon fuel standards could hinge on how they affect the state’s cap-and-trade system for carbon emissions. Photo: Ted S. Warren, AP
A pending fight over low-carbon fuel standards could hinge on how they affect the state’s cap-and-trade system for carbon emissions. Photo: Ted S. Warren, AP

A Harvard economist known globally for his work on climate change policy sat in the Sacramento office of the oil industry’s lobbying firm recently, making the case that California is fighting global warming the wrong way.

The state has a good cap and trade system, Robert Stavins said, but some of its other environmental policies are weakening it. He pointed to a rule known as the low carbon fuel standard, which is supposed to increase production of clean fuels.

Environmental advocates consider it a complement to the cap and trade program that makes industry pay for emitting carbon; Stavins had other words.

“It’s contradictory. It’s counter-productive. It’s perverse,” he said. “I would recommend eliminating it.”

California’s low carbon fuel policy is shaping up as a major fight this year for the state’s oil industry, an influential behemoth that spent more than $10.9 million lobbying Sacramento last year, more than any other interest group.

“There’s a storm coming,” biofuels lobbyist Chris Hessler told a roomful of clean energy advocates at a recent conference on low carbon fuels. “If we don’t meet this attack vigorously, we’re all going to be in a lot of trouble.”

NEW BATTLE LINES

The oil industry was front and center in the biggest fight to hit the state Capitol last year: a proposal to cut California’s petroleum consumption in half over the next 15 years to slow the pace of climate change. The industry won its battle when lawmakers stripped the oil provision from Senate Bill 350.

But California’s larger oil war is far from over, and the newest battle lines are beginning to emerge.

Gov. Jerry Brown is plowing ahead with plans to cut vehicle oil use in half through executive orders and regulations like the low carbon fuel standard. The standard requires producers to cut the carbon intensity of their fuels 10 percent by 2020. To reach the standard, refineries will have to make a blend that uses more alternative fuels — like ethanol — and less oil.

The program was adopted in 2009 but was locked in a court battle for years. California regulators prevailed, and took action last year to resume the program. Now producers must start changing the way they formulate their fuel or buy credits if their product is over the limit.

That’s led to higher costs for fuel makers, which they are passing on to consumers at a rate of about 4 cents per gallon, according to the California Energy Commission. But the price is likely to keep increasing, the oil industry warns, as it gets tougher to meet the standard that increases over time.

Which is where Stavins’ argument comes in. It goes like this: the cleaner fuels required by the low carbon fuel standard will emit less greenhouse gas. That will reduce the need for fuel producers to buy permits in the cap and trade system (which makes industry pay for emitting climate-warming pollution) and create additional emissions by allowing other manufacturers to buy the pollution permits.

Less demand will also depress prices on the cap and trade market.

Stavins is the director of Harvard’s Environmental Economics Program and part of the Intergovernmental Panel on Climate Change, a prestigious group of experts who review research for the United Nations.

He’s also an advisor to the Western States Petroleum Association, which paid him to make the trip to Sacramento, where he talked with reporters before a day of meetings with lawmakers and business leaders.

Environmental advocates and California clean air regulators reject his view. They say the fuel standard works in harmony with other carbon-reducing programs and it’s an important piece of California’s effort to achieve its climate change goals.

“One of the major goals of the low carbon fuel standard… is to drive innovation of new and alternative low carbon fuels,” said Stanley Young, spokesman for the California Air Resources Board. “The cap and trade program on its own cannot do that.”

Alternative fuel producers gathered in a ballroom near the Capitol days after Stavins’ visit to Sacramento. During a presentation on the rising price of low carbon fuel credits, Hessler, the biofuels lobbyist, warned that the program is coming under “political attack.”

He defended the fuel standard by saying the regulation limits the price of the credits, and the cost to consumers will be kept down as some fuel producers make money by selling credits to others. He urged conference participants to share his information with California policymakers to counter opposition to the low carbon fuel standard.

“We’ve got to be ready for this,” Hessler said.

HOW THINGS COULD GO DOWN

A fight last year over a low carbon fuel standard in the state of Washington may provide some clues about how things could go down here.

There, Democratic Gov. Jay Inslee proposed a low carbon fuel standard but failed to earn enough support for it in the Legislature. The fuel standard became a bargaining chip for Republicans in negotiations about funding for transportation infrastructure.

Here in California, lawmakers and Gov. Brown are also negotiating a plan to pay for a backlog of repairs to state roads and highways. Brown has pitched spending $36 billion over the next decade with a mix of taxes and other revenue sources.

Republican votes are necessary to reach the two-thirds threshold for approving new taxes. So far, Republicans have balked at the plan, with some suggesting that the fuel standard should be included in the negotiations.

“As we’re having the discussions about transportation funding in general in California, and transportation taxes in particular, this ought to be part of the discussion,” said Assemblyman Jay Obernolte, R-Hesperia.

It’s a message echoed by the president of the Western States Petroleum Association, which advocated against the low carbon fuel standard in Washington.

Catherine Reheis-Boyd said she wants California lawmakers to “take a very hard look” at the low carbon fuel standard as they consider the future of climate change policies and the desire to repair the state’s roads.

“All those things interplay,” Reheis-Boyd said. “That’s a big conversation. I think people across the state are willing to have it, and I think we’re at a pivotal point to have it this year.”

CALmatters is a nonprofit journalism venture dedicated to explaining state policies and politics. For more news analysis by Laurel Rosenhall go to https://calmatters.org/newsanalysis/.
Climate Change, Climate change denial, COP21 Climate Conference Paris, Energy stocks, Oil exports, Oil Industry, Oil industry lobby

Top 3 Myths on Oil Export Ban; Meet the Lobbyists; Paris Agreement Should Spook; Climate Denial Scandal; 5 Stocks to Watch

From an E-ALERT by DeSmogBlog
Five excellent reports distributed by email on Dec 17, 2015

Top Three Myths Used to Sell the Lifting of the Crude Oil Export Ban, A Climate and Security Disaster In The Making

It can be difficult to win an argument when you have no viable position. However, when you are the oil industry, you can just buy the win. Which is what the oil industry is poised to do regarding the lifting of the crude oil export ban.

The GOP is currently holding up Congressional action needed to avoid a government shutdown by demanding inclusion of the lifting of the crude oil export ban in the government spending package.

Here are some of the disingenuous arguments the oil industry has paid to have members of Congress make over the past two years. Read more.

Meet the Lobbyists and Big Money Interests Pushing to End the Oil Exports Ban

The ongoing push to lift the ban on exports of U.S.-produced crude oil appears to be coming to a close, with Congress agreeing to a budget deal with a provision to end the decades-old embargo.

Just as the turn from 2014 to 2015 saw the Obama Administration allow oil condensate exports, it appears that history may repeat itself this year for crude oil. Industry lobbyists, a review of lobbying disclosure records by DeSmog reveals, have worked overtime to pressure Washington to end the 40-year export ban — which will create a global warming pollution spree. Read more.

Historic Paris Climate Agreement Should Spook Fossil Fuel Markets and Escalate Clean Tech Investment

World leaders reached an historic agreement in Paris moments ago, capping off the COP21 climate talks with a unanimous deal among 195 countries to curb global warming pollution and hasten the clean energy transition. The gavel just fell on the Paris Agreement, and it’s time to celebrate.

Is it enough to please everyone? No. Will people continue to suffer from climate-charged extreme weather events? Yes. But it is a welcome change from previous summit failures. Read more.

In Midst of ExxonMobil Climate Denial Scandal, Company Hiring Climate Change Researcher

Caught in the crosshairs of an ongoing New York Attorney General investigation exploring its role in studying the damage climate change could cause since the 1970’s and then proceeding to fund climate science denial campaigns, ExxonMobil has announced an interesting job opening.

No, not the new lawyer who will soon send the “private empire” billable hours for his defense work in the New York AG probe, though that’s a story for another day. Exxon is hiring for a climate change researcher to work in its Annandale, New Jersey research park facility. Read more.

Five Energy Stocks to Watch After Paris Climate Agreement

With a new global agreement on climate change gaveled into the history books in Paris tonight, many people including me believe we have just witnessed the end of the fossil fuel era.

So-called “pure play” fossil fuel companies that have not significantly diversified into other areas of energy production will be huddled in boardrooms this week trying to figure out what the Paris Agreement means to their bottom line. Read more.