Category Archives: Oil Industry

Bakken Crude, Crude By Rail, Derailment, DOT-111, Federal Regulation (U.S.), Hazardous cargo transparency, Oil Industry, Public Safety, Rail industry

Washington State: federal emergency order not enough

Repost from Seattle Weekly News

Emergency Order Requires Railroads to Report Bakken Oil, but Is It Enough?

By Jerry Cornfield Thu., May 29 2014

By the end of next week, Washington will learn how often tank cars of oil siphoned from North Dakota’s Bakken Shale are getting shipped by rail through the state.

 A modern tank car. Photo by Harvey Henkelmann

An emergency order from the U.S. Transportation Department requires railroads to tell the state how many trains carrying this highly flammable varietal of black gold are expected to travel through Washington each week, and on which routes.

Railroads are not required to reveal exactly what days and times the trains are coming or how much crude oil is getting transported.

Community leaders, emergency responders and some politicians say that’s the information they really need to be prepared for a derailment, spill or other type of accident.

They’re aware of oil train derailments in Virginia in April, in Alabama in November; and in Quebec last July, where 47 people died.

They know the chances of an accident are increasing as rail shipments of all types of crude oil multiply in Washington. The state Department of Ecology estimates it went from zero barrels in 2011 to nearly 17 million barrels—roughly 714 million gallons—in 2013.

But rather than criticize the order as inadequate, these leaders cite the federal action as a step forward.

“We’re all kind of worried about (Bakken crude) because it is much more flammable than regular crude oil. We have been asking for more information,” said Brad Reading, assistant chief of Snohomish County Fire District 1 and chairman of the countywide Special Operations Policy Board which handles planning for hazardous materials incidents. “This is certainly a step forward.”

Marysville Mayor Jon Nehring said he understood the federal change “wasn’t overwhelming” in its scope when it was announced in early May

“From the perspective of public safety, the greater the detail the better, so any movement in that direction is good,” he said.

The rules, which kick in June 6 and apply to all 50 states, cover only shipments of at least 1 million gallons of Bakken crude. That sounds like a lot, except when you consider that one tank car holds about 30,000 gallons of crude oil, and oil trains commonly have 100 or more cars hitched together.

Railroads must give the State Emergency Response Commission an estimate of how many trains will run through each county each week. The commission will notify the counties.

After railroads provide the information next week, they won’t need to contact the state again unless the number of trains carrying Bakken oil increases or decreases by 25 percent or more.

Refiners and railroads aren’t enamored with the notification directive. They worry it could increase the risk of sabotage and encourage daring activists to try to block trains through protests.

They’d prefer not to see the information publicized. State emergency management officials plan to post it online but on Tuesday were checking to find out if they are barred from doing so.

And the federal rules don’t deal with the safety of the rail cars in which the Bakken is shipped. That’s a separate conversation going on in Washington, D.C. where the Obama Administration and lawmakers on both sides of the aisle are likely to impose tougher standards for rail car construction.

Sen. Doug Ericksen, R-Ferndale, chairman of the Senate Energy, Environment & Telecommunications committee, said the new notification rule is “a piece of the puzzle” but tank car safety is critically important and needs addressing sooner than later.

He’s planning to hold a public hearing on oil trains June 17 in Spokane.

“State lawmakers must continue to pressure the federal government to take stronger action,” he said when the order came out May 7. “It is what communities throughout Washington deserve and what we didn’t get from our federal leaders today.”

Political reporter Jerry Cornfield’s blog, The Petri Dish, runs regularly at www.heraldnet.com .

California oil industry, Fracking, Monterey Shale, Oil Industry, US Dept of Energy, US Energy Information Administration (EIA)

Monterey Shale estimate bungled: background & causes

Repost from the Post Carbon Institute

The Peak Oil Crisis: The Monterey Shale Debacle

May 28, 2014  |  Tom Whipple

Last week the LA Times ran a story saying that the U.S. Energy Information Administration (EIA) is about to reduce “its” estimate of the amount of shale oil that can be recovered from the Monterey Shale under California by 96 percent. This reduction cuts the estimate of producible shale oil in the U.S. by 60 percent.

This development, of course, came as no surprise to those of us who have been watching the Monterey Shale situation closely. To begin with, anyone with the most rudimentary knowledge of geology knows that California is where great tectonic plates have been banging together for millions of years turning the earth below the surface into an incredible jumble. To produce shale oil one needs nice flat strata of oil bearing rock that run on for miles.

Then of course we have the issue of Chevron, which has been drilling in California since 1879. If one believes there really are 15 billion barrels of shale oil under the state, then why isn’t Chevron pumping it out by the tanker load?

Thus the interesting parts of this story are: who said there were 15.4 billion barrels of shale oil under California in the first place?; and how did the Department of Energy come to accept such an obviously flawed estimate, and trumpet the story far and wide so that many investors and policy makers in California and Washington fell for it?; and then why did it come to such a screeching halt leaving the country’s prospects for “energy independence” a dubious proposition?

Moreover, the government’s retraction of its estimate of shale oil prospects in California raises issues about just how good are its forecasts that North Dakota and Texas will continue producing large amounts of shale oil into the next decade.

The great Monterey Shale oil myth got its start back in July 2011 when the EIA stapled a cover on a contractor-produced “study” that it paid for entitled Review of Emerging Resources: U.S. Shale Gas and Oil Plays. In the fine print of the cover pages, however, the EIA did note that the “views in this report should not be construed as representing those of the Department of Energy.”

The underlying study, which was prepared by a small consulting company, INTEK, Inc., in Arlington, Virginia, purports to have been based on a wide range of sources and methods. However when it came to California the report’s author, Hitesh Mohan, said the California portion was primarily based on technical reports and presentations from oil companies. Presentations from oil companies are prepared to raise money from investors and can be expected to lay out the most optimistic view possible.

The methodology that produced the mythical estimate seems to have been something like this: take the 1,700 square miles of the Monterey Shale, drill 28,000 wells in it at the rate of 16 wells per square mile, wait until each well produces 550,000 barrels of oil, and you have your 15.4 billion barrels. Later research showed that only a handful of California oil wells ever produced 550,000 barrels of oil or anything close.

The California story only gets worse. The California oil industry funded a joint study by the University of California and the industry which concluded that exploiting the supposed 15 billion barrels of shale oil would result in from 512,000 to 2.8 million new jobs in the state; would increase per capita GDP by $11,000 and boost government revenue by up to $24.6 billion per year. All the politicians had to do was get out of the way, stop all this environmental nonsense over fracking and more regulations, and the state would be rich.

The writing on the wall came last year when thorough and independent studies by the Post Carbon Institute pointed out first that very little oil was coming out of California due to fracking of shale deposits as compared to those in North Dakota and Texas. In December of last year, a second and more detailed well-by-well study of what was actually happening in California blew the ridiculous INTEK/EIA conclusion out of the water. Although the Post Carbon Institute studies got little nationwide attention, several California newspapers and TV stations, which are much closer to the state’s well-being, did in-depth stories concluding that the 15 billion number and the ensuing riches were unlikely eventualities.

It is obvious that the new studies brought pressure on the Department on Energy to take a second look at what they were saying about shale oil in California. When it became obvious that were endorsing nothing but industry hype, they did an about face and lowered the estimate to 600 million barrels, which in itself may be high.

The EIA’s reaction to questions about one of the biggest blunders in its history is interesting. EIA Director Adam Sieminski told the Wall Street Journal that the oil bearing rocks are still under California, but the technology to extract the oil has not yet been developed. Industry spokesmen are more upbeat, saying that hundreds of smart engineers are working on the problem of producing California’s shale oil and that someday, if not sooner, they will be successful.

The California shale story raises once again questions about just where America’s shale oil and gas production is going and along with it the future of industrial society. Naturally, none of us want to hear that hard times, lower economic growth, and fewer jobs lie ahead. The Department of Energy clearly is trying to draw a fine line between the gross over-optimism exhibited in the Monterey shale incident and an energy apocalypse. But, do we really have to wait until the evidence of over-optimism is so overwhelming that it has to be admitted? There are several other “Monterey Shales” out there well-understood in the peak oil community where the Department of Energy continues to make overly optimistic estimates which will one day rebound to the detriment of us all.

Originally posted at Falls Church News Press.
Air Quality, Environmental Impacts, Fracking, Oil Industry

Texas fracking verdict puts industry on notice about toxic air emissions

Repost from The Center For Public Integrity

Texas fracking verdict puts industry on notice about toxic air emissions

A nearly $3 million jury verdict against a Texas oil and gas company highlights regulatory failures and health risks linked to fracking

By David Hasemyer  |  May 28, 2014 
A TCEQ investigator filmed these "heavy plumes" of emissions wafting from the Aruba facility using an infrared camera. Thirty seconds later he reportedly “felt the physical effects of dizziness and a sore throat”. Screenshot from TCEQ video
A TCEQ investigator filmed these “heavy plumes” of emissions wafting from the Aruba facility using an infrared camera. Thirty seconds later he reportedly “felt the physical effects of dizziness and a sore throat”. Screenshot from TCEQ video

Between February 2010 and July 2011, Lisa and Bob Parr filed 13 complaints about air pollution from gas and oil operations near their ranch in Wise County, Texas. Sometimes they had trouble breathing, they told the Texas Commission on Environmental Quality (TCEQ). They also experienced nausea, nosebleeds, ringing ears and rashes.

Other families were also alarmed. Between 2008 and 2011, the TCEQ received 77 complaints from Wise County, in the Barnett Shale drilling area in North Texas. One said the odor was so powerful that the complainant “couldn’t go outside,” according to the TCEQ report.

Frustrated and angry, the Parrs decided to sue. Their attorney warned them that lawsuits against the oil and gas industry rarely, if ever, succeed. But the Parrs persisted and last month won what appears to be the first successful U.S. lawsuit alleging that toxic air emissions from oil and gas production sickened people living nearby. A Dallas County jury found that Aruba Petroleum, a privately owned company based in Plano, Texas, “intentionally created a private nuisance” that affected the family’s health and awarded the Parrs almost $3 million in damages.

“When you don’t have a strong regulatory system, a system to prevent what happened to this family, the only place left to turn for help is the courts,” said Robert Percival, director of the University of Maryland’s Environmental Law Program.

There are no assurances the verdict against Aruba will survive an appeal or lead to regulatory changes in Texas or any of the other states where people complain their health is jeopardized by gas and oil drilling. The issues are so complex that the industry, the public and policy makers may be sorting through them for years.

Aruba has asked Judge Mark Greenberg, who presided over the Parrs’ case, to reverse the jury’s verdict. Greenberg is expected to hear arguments over the verdict in June.

“This case will be looked at very, very closely because it has set the stage in a way that has never been set before,” said attorney Tomas Ramirez. He represents two families in similar lawsuits in the booming Eagle Ford Shale of South Texas, where emissions are raising the same alarms that have been sounding in the heavily developed Barnett Shale region the Parrs call home.

Aruba used two long-standing industry arguments in its defense: That the emissions could have come from one of its competitors’ wells, and that it was in compliance with Texas environmental rules.

The fact that those arguments failed in this case “exposes every company to more possible litigation,” said Thomas McGarity, a University of Texas law school professor who specializes in environmental and administrative law.

“Losing this case was not good for the industry,” McGarity said. “My guess is the industry will coalesce around this case. The industry will want to stop the dam from breaking wide open … This is where they will take a stand.”

Aruba officials declined requests for interviews but released a statement though a public relations firm that said: “We contended the plaintiffs were neither harmed by the presence of our drilling operations nor was the value of their property diminished because of our natural gas development.”

In a motion to overturn the verdict, company lawyers argued “there is no evidence that Aruba engaged in any conduct intended to cause harm … Aruba’s operations complied with best industry practices and met the standard for a reasonable and prudent oil and gas operator.”

Bakken Crude, Derailment, DOT-111, Explosion, Federal Regulation (U.S.), Oil by Rail Week of Action July 6-12 2014, Oil Industry, Risk Assessment

Interactive Map and Report: “Runaway Train: The Reckless Expansion of Crude-by-Rail in North America”

Repost from DESMOGBLOG.COM
[Editor: The map has some errors, but overall this is a great report and an important contribution in understanding the massive scope of the oil train boom.  – RS]

Interactive Map and Report on Oil-By-Rail, “Booming Bomb Train Industry”

2014-05-28  |  Justin Mikulka

A new report and website released today by Oil Change International provides a comprehensive overview of the current oil-by-rail industry in North America and it isn’t a pretty picture.

The report and interactive map of the “booming bomb train industry” capture the alarming scope of this very recent development.  As the report points out, 70 times as much oil was moved by rail in 2014 as there was in 2005. That rapid expansion is continuing, placing more North American communities at risk.

“This analysis shows just how out of control the oil industry is in North America today. Regulators are unable to keep up with the industry’s expansion-at-any-cost mentality, and public safety is playing second fiddle to industry profits,” said Lorne Stockman, Research Director of Oil Change International and author of the report.

According to the report, Runaway Train: The Reckless Expansion of Crude By Rail in North America, approximately one million barrels of oil per day are moved on 135 trains of 100 cars or more each day in America.  If all of the currently planned development of oil-by-rail facilities occurs, the full capacity to move oil would be five times that amount.

“This is what the All of the Above Energy Strategy looks like – a runaway train headed straight for North American communities,” Stockman said.

N.Amer.CrudeByRail(600)

This massive investment by the oil and rail industries to expand their capacity to move oil by rail is one of the main reasons that improving oil-by-rail safety is unlikely when it comes to the unsafe DOT-111 tank cars.  These cars currently make up approximately 70% of the oil-by-rail tank car fleet and there is currently a two to three year waiting list for companies wanting new tank cars.

The planned expansion of the oil-by-rail industry is simply impossible without the existing DOT-111 cars.  In 2013 this point was made by an industry analyst:

“People who want to ship oil can’t get them,” Toby Kolstad, president of the consultant firm Rail Theory Forecasts LLC said. “They’re desperate to get anything to move crude oil.”

Without the oil-by-rail transportation option, the Bakken Shale oil would have no way to get to market.  Despite the fact that the DOT-111 cars are inadequate and the Bakken crude is more explosive, the industry continues to rapidly expand with no new regulations.

The planned expansion of the industry and the current known capacity restraints help explain the recent public relations effort by the oil industry to dismiss any safety concerns.

Last week, the North Dakota Petroleum Council released a new study that said Bakken crude was “comparable in volatility to gas-rich oils from other shale formations in other regions.”

Which is true.  However, in other regions, like the Eagle Ford formation in Texas, the natural gas liquids are stripped from that oil before being shipped by rail which greatly reduces the danger of explosion.

Last week, the American Fuel and Petrochemical Manufacturers also weighed in with their opinion.  AFPM President Charles Drevna stated their position to Railway Age:

“As the standards are today for flammable liquids, Bakken crude fits right in, and the DOT-111 cars should be fine”

These claims are being made despite testimony by Robert Sumwalt of the National Transportation Safety Board calling the DOT-111’s an “unacceptable public risk” when used to transport Bakken crude.

Last week, the White House announced that the Pipeline and Hazardous Materials Safety Administration (PHMSA) will be proposing new oil-by-rail regulations in July.  However, this will just be a proposal and the beginning of a likely contentious political battle about these regulations.  No one expects any new regulations before 2015.  Meanwhile, the industry continues its expansion plans.

In July, at the same time PHMSA is expected to announce its proposed new regulations for the oil-by-rail industry, activists across the country are planning a week of action.  Starting on July 6th, the anniversary of the deadly explosion in Lac-Megantic, Quebec, the “Oil by Rail week of action” will highlight opposition to the shipping of oil by rail through communities and remember the victims of that first Bakken crude oil explosion.

In Lac-Megantic, there is little good news. The town is facing years of clean-up and reconstruction, and billions of dollars of expenses to deal with that disaster.  Recently, Réjean Roy, whose daughter died in that accident, talked about the reality of Lac-Megantic’s current situation and their need to try to revive the town’s tourism industry.

“We need it for my town, because my town is dying. If we do nothing to attract tourists here, the town will die.”

A town will die. But the oil-by-rail industry is booming and regulations are not coming any time soon. It will take a huge public outcry to change that.

Stockman, author of the Oil Change International report, remains hopeful that the tide could turn.

“Communities are already waking up to the dangers of oil trains barreling through their backyards, with spills, explosions and derailments happening all too often. This report and online tool will help provide the critical information that’s been sorely missing in order to shine a light on what’s really going on, and to help stop the runaway train of crude-by-rail in its tracks before more damage is done.”