Category Archives: Oil Industry

East Bay Express: Richmond and Berkeley oppose oil by rail

Repost from East Bay Express

Richmond and Berkeley Oppose Fracked Oil and Tar Sands Rail Shipments

Jean Tepperman —  Wed, Mar 26, 2014

The city councils of both Berkeley and Richmond unanimously passed resolutions last night calling for tighter regulation of the shipping of crude oil by rail through the East Bay. The Berkeley resolution went further, committing Berkeley to oppose all shipment of crude oil by rail through the city until tighter regulations are in place.

Information has recently come to light about crude-by-rail activity in both cities. In September, with no public announcement, the Kinder Morgan rail yard in Richmond quietly switched from handling ethanol to crude oil. And a new proposal calls for shipping crude oil to the Phillips 66 refinery in Santa Maria on train tracks that run through the East Bay.

Fracked oil from Bakken shale is highly explosive.
USGS – Fracked oil from Bakken shale is highly explosive.

At the Richmond City Council meeting, oil-industry expert Antonia Juhasz presented evidence from both the BNSF railroad and Kinder Morgan websites showing that the crude oil coming into the Richmond rail yard is fracked from the Bakken shale fields in North Dakota. This Bakken crude has been responsible for several recent disastrous explosions when trains carrying it have derailed, with the worst accident in Lac Megantic, Quebec, where 47 people were killed and the downtown destroyed.

Juhasz added that there were more derailments and accidents involving crude by rail in 2013 than in the previous thirty years combined. More crude is being shipped by rail because of the huge increase in production of crude from North Dakota Bakken shale and Canadian tar sands, both far inland, and the need to get the fossil fuel to the coasts to refine and export.

Juhasz also reported that the National Transportation Safety Board (NTSB) has said that emergency response planning along the rail routes is “practically nonexistent” and that current regulations are “no longer sufficient” — and that it’s not safe to carry crude oil in the type of car currently being used. Because of all this, the NTSB has recommended that trains carrying crude oil be rerouted “away from populated and other sensitive areas.”

Several Richmond council members and community speakers expressed surprise that the switch to crude oil happened with no public notice. Andres Soto of Communities for a Better Environment said the “real culprit” was the staff of the Bay Area Air Quality Management District, which approved Kinder Morgan’s application to make this change without notifying the public or even the air district board members.

City councilmembers wrestled with the fact that the city has no jurisdiction over railroads — only the federal government can regulate them. But Juhasz and McLaughlin said a resolution by the city was important as part of a demand from many cities and organizations for more regulation of crude by rail.

The resolution called on federal legislators to move quickly to regulate the transportation of the new types of crude oil from Bakken shale and Canadian tar sands. Many speakers argued in favor of a moratorium on shipping crude by rail until adequate regulations were in place.

Meanwhile in Berkeley, another oil-industry expert, environmental engineer Phyllis Fox, described the plan to ship crude oil through the East Bay to Santa Maria — probably through Richmond, Berkeley, and Oakland — since these tracks are built to carry heavy trains. She projected a map showing that rail lines in California parallel rivers and go through the most populated areas, so accidents would be “disastrous.”

Information released about the plan doesn’t reveal the source of the crude oil, but Fox said the two main kinds of crude oil being shipped by rail are from Bakken shale — oil that is highly volatile and prone to explosion — and Canadian tar sands — very heavy oil that is especially toxic and difficult to clean up. “One catastrophic event,” Fox said, “could cause irreversible harm.”

Other sources have pointed out that the Phillips 66 refinery in San Luis Obispo County is geared to refining heavy crude oil, so it’s most likely that the crude headed to that plant would come from the Canadian tar sands.

Many speakers in the public comment period supported the resolution, including residents of Crockett/Rodeo and Martinez, who are waging similar battles in their communities. Speakers pointed out a wide range of problems with shipping crude by rail in addition to the immediate danger. In a pre-meeting rally in support of the resolution, Mayor Tom Bates said the issues “go beyond the danger to our community to our whole carbon future. If we don’t get off fossil fuel we’re all doomed.”

The resolution commits Berkeley to file comments opposing crude-by-rail projects in any draft permit-approval process, starting with the Santa Maria project; to file comments opposing new projects in the Phillips 66 refinery in Rodeo and the Valero refinery in Benicia; and to support the federal Department of Transportation in creating strict regulation of rail shipments of crude oil. In presenting the resolution, Maio also said Berkeley should form a coalition with other cities fighting crude-by-rail projects.

Insurance industry figures on 2013 natural and human-caused disasters

Repost from Business Insurance
[Editor’s note: The text here lumps together losses from natural catastrophes and “man-made” disasters.  But the link at the end of this story downloads a PDF that shows detailed information about oil and rail disasters. – RS]

Catastrophes caused global insured losses of $45B in 2013: Swiss Re

Sarah Veysey
March 26, 2014

Global insured losses from natural catastrophes and man-made disasters totaled about $45 billion in 2013, down from about $81 billion a year earlier, according to a report released Wednesday by Swiss Re Ltd.

Economic losses from natural and man-made disasters were about $140 billion in 2013, down from $196 billion in 2012, according to the Swiss Re sigma report.

The most costly insured event in 2013 was flooding in parts of central and eastern Europe during May that caused insured losses of about $4.1 billion, according to the study.

Hailstorms in France and Germany in July caused insured losses of about $3.8 billion, the report showed, while floods in Canada in June resulted in insured losses of about $1.9 billion.

In the United States, thunderstorms and tornadoes in May caused insured losses of $1.8 billion, while severe thunderstorms, tornadoes and hail later that same month caused insured losses of $1.4 billion. A winter storm bringing ice, tornadoes and heavy rain in April resulted in insured losses of $1.2 billion.

Typhoon Haiyan, which hit the Philippines in November, left about 7,500 people dead or missing, and caused insured losses of about $1.5 billion, according to the report.

Windstorm Christian, which hit parts of northern and central Europe in October, caused insured losses of about $1.5 billion, according to Swiss Re, while Typhoon Fitow in China and Japan in September caused insured losses of about $1.1 billion.

“Risk prevention and mitigation measures have progressed in recent years,” Swiss Re said in a statement.

“For instance, the losses from the floods in central and eastern Europe last year would have been much worse had the flood protection measures not been strengthened after the same region suffered severe flooding in 2002,” it said.

The study can be found here: Natural catastrophes and man-made disasters in 2013 sigma1_2014_en.PDF.

Reuters report on West Coast energy projects mentions Valero, Benicia

Repost from Reuters

New U.S. West Coast energy projects face tough opposition

By Edward McAllister

NEW YORK (Reuters) – The West Coast of the United States, long a battle ground for industrial and environmental interests, is set for another round of disputes as the region attracts key energy projects.

Huge new oil and gas fields have changed the way energy is transported across the United States, opening up the prospect of gas exports to Asia and increasing shipments of oil by rail. As this happens, the West Coast, from California to Washington, has become a major focus for energy developers.

Veresen Inc’s Jordan Cove liquefied natural gas (LNG) project in Coos Bay, Oregon, received approval from the Department of Energy on Monday to export gas to needy importers in Asia. Another project further north, known as Oregon LNG, is expected to receive similar approval within two months.

The two developments, both of which still need construction permits, would be the first of their kind on the West Coast outside of Alaska and represent a potentially new era for the United States, where a drilling boom has pushed output to record highs. The outcome of these projects could also set the standard for other energy developments in the region.

But opposition remains.

“Jordan Cove still needs a slew of federal and state permits to begin construction,” said Zack Malitz of San Francisco-based environmental group Credo, which is opposed to exports because it could lead to more drilling. “We still have time to sound the alarm.”

OIL, COAL

Energy projects have long met opposition in West Coast states where a stronger environmental lobby has made development approvals tougher to obtain than in other more oil industry-friendly states like Texas or Louisiana.

The strength of that opposition is being tested again as coal and oil producers look to the West Coast to broaden their business.

In recent years, mining and shipping industries have tried, and sometimes failed, to gain permission to move coal through ports in the Pacific Northwest to reach Asian markets. The Port of Coos Bay dropped its plans for a coal export terminal last spring after environmental challenges.

Now, three more export terminals remain on the drawing board. Backers of the Morrow Pacific project in Oregon expect to clear regulatory hurdles in the coming months.

Meanwhile, oil producers looking to tap west coast markets have proposed a number of terminals to receive and refine crude oil delivered on trains. Crude by rail has become a major industry in recent years, as new output overwhelms the existing pipeline network. But a number of explosive derailments have given pause to states considering more train traffic, especially loads carrying grades of crude oil from North Dakota considered more volatile than others.

In Washington State, which has the potential to become a major oil port if all pending projects are approved, opposition to moving more crude by rail is growing.

Public meetings held in October regarding a crude by rail terminal in the Port of Vancouver proposed by Tesoro Corp and Savage Services garnered tens of thousands of comments, many of which centered on concerns about crude train crashes and spills.

The project is in the permitting phase, and the final decision lies with Governor Jay Inslee.

Valero Energy Corp’s plan to build an offloading facility at its San Francisco-area refinery was pushed to the first quarter of 2015 from late 2013 to allow time for an environmental review after opponents voiced concerns to local officials.

The surge in the transport of crude oil by rail into California has caught the attention of lawmakers in Sacramento, who last week held a hearing to examine whether more resources should be dedicated to preventing and responding to accidents.

Currently, less than 1 percent of the state’s crude oil is delivered by rail. But with at least six new crude-by-rail facilities planned or under construction in California, that figure is expected to reach 25 percent by 2016.

“Regardless of whether it takes two years or four years, this is a significant change that represents an emerging threat to California’s natural resources,” Tom Cullen, administrator of the Department of Fish and Wildlife’s Office of Spill Prevention and Response, said at the hearing last week.

(Reporting By Edward McAllister in New York, Rory Carroll in San Francisco, Patrick Rucker in Washington D.C. and Kristen Hays in Houston; Editing by Joseph Radford)

DOT-111 tank cars inadequate, but rolling through our cities today

Repost from PublicSource
[Editor: two significant excerpts: “While federal officials work on new safety requirements for DOT-111 tank cars, these cars are out there carrying crude oil, rolling through Pennsylvania daily…” AND “The Pennsylvania Emergency Management Agency recently struck an agreement with CSX railroad to get real-time information on the tracking of hazardous material shipments, including crude oil, in the state.” – RS]

Rail cars moving crude oil need makeover

By Natasha Khan | PublicSource | March 25, 2014

Train Derailment 2006: Flames continue to burn a day after a Norfolk Southern train derailed on Oct. 21, 2006, in New Brighton. Flames continue to burn a day after a Norfolk Southern train derailed on Oct. 21, 2006, in New Brighton, Pa. (Photo by Lucy Schaly / Beaver County Times)

Walking with his daughter from a Friday night football game in New Brighton, Pa., Fire Chief Jeffrey Bolland heard what sounded like a jet overhead and saw an orange glow in the distance.

Twenty-three rail tank cars of ethanol derailed on a bridge above the Beaver River on that night in 2006, setting off an explosion that burned for 48 hours. Some of the black, torpedo-shaped cars tumbled into the river.

No one was injured, but 150 people were evacuated and a nearly multi-million dollar cleanup ensued in the city about 30 miles Northwest of Pittsburgh.

The rail cars in the accident were DOT-111s, designed in the early 1960s and originally used to haul non-hazardous materials such as corn syrup. Now, they are the worker bees for the glut of crude oil and ethanol being transported across Pennsylvania and the country.

“The same old clunkers are still out there,” said Fred Millar, a Washington, D.C., consultant to the rail industry. “They’re Pepsi cans on wheels.”

For more than 20 years, safety officials have warned about these cars as accidents involving them have multiplied. One of the worst was in Lac-Mégantic, Quebec, in July 2013, when 47 people died after a runaway train carrying Bakken crude oil from North Dakota exploded, decimating the town.

Now, state, federal and industry officials are demanding that regulations be put in place to improve the safety of the cars, which are “subject to damage and catastrophic loss of hazardous materials” when trains derail, according to the National Transportation Safety Board (NTSB).

After two recent derailments in Pennsylvania — one in Westmoreland County, one in Philadelphia — involving the cars and crude oil, U.S. Sen. Bob Casey, D-Pa., sent a letter to U.S. Secretary of Transportation Anthony Foxx.

“Steps must be taken to make rail cars safer and to ensure greater transparency in the transportation of hazardous materials,” Casey wrote.

tankers-growth-print600x340.jpg

A sharp increase in North American crude-oil production — mainly because of fracking — has pushed a high percentage of crude oil onto the tracks.

In 2008, there were 9,500 carloads of crude oil on the tracks in the country. In 2013 that number ballooned to 415,000 carloads, according to the Association of American Railroads (AAR).

The amount of crude oil spilled last year was more than the total amount spilled  in the 37 previous years, according to an analysis of federal data by McClatchy Newspapers.

“Most times, people don’t want regulations, [but] in this case, everybody wants them,” said Anthony Hatch, a rail transportation analyst and consultant.

Rolling through PA

Pennsylvanians usually associate fracking with natural gas, but much of the crude oil being fracked in the North Dakota Bakken Shale formation goes to refineries in and around Philadelphia, which include Philadelphia Energy Solutions, the largest refiner of Bakken crude.

Railway officials don’t reveal their routes for hazardous materials for security reasons, and aren’t required to by law. However, a state official said Bakken crude does come through Pittsburgh on the way to Philly.

And the number of trains carrying crude oil through Pennsylvania are set to spike with the opening of a new crude oil terminal in Eddystone in Delaware County at the end of April. Trains carrying more than 80,000 barrels of North Dakota crude oil are expected to arrive daily.

Virtually no one in the rail and oil industries anticipated that railroads would be a primary mode of transporting the massive amounts of newly fracked crude oil in North America, said Hatch, the rail industry analyst.

“Nobody saw it coming,” he said.

Now, federal regulations need to play “catch up” with this reality, said Deborah A.P. Hersman, former chairwoman of the NTSB, in a statement.

“The large-scale shipment of crude oil by rail simply didn’t exist 10 years ago,” she said.

Now the NTSB — which investigates accidents, but doesn’t regulate railroads — and others are insisting that regulations be written covering the DOT-111s and other rail cars.

“Right now, there is so much uncertainty that people aren’t going to make investments in safer cars and they’re going to keep running these crummy cars and killing people,” said Rep. Peter DeFazio, D-Ore., at a U.S. House subcommittee hearing focused on rail safety in February.

The job of writing the regulations falls to the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA).

In September, PHMSA put out a notice asking for comments from citizens, environmental and industry groups, and railroad companies on proposed rules to improve the design of the DOT-111 tank car, as well as other safety rules.

PHMSA officials said they’ve been busy since the comment period ended in December analyzing numerous comments on the rules. But changes aren’t pegged to come until early 2015, according to the agency’s timeline.

This month, a Senate panel grilled regulators on taking too long to pass regulations improving the tank cars used to haul crude.

The panel’s chairman, Sen. Richard Blumenthal, D-Conn., said he was “disappointed and disturbed by some of the delays and failures in rulemaking and scrutiny.”

PHMSA head Cynthia L. Quarterman told the panel that her agency is working as fast as possible.

A PHMSA spokesman, Joe Delcambre, told PublicSource in an email that “it was crucial to get input from a wide variety of stakeholders, including shippers and carriers, state and local officials and concerned citizens.”

The AAR estimates there are 92,000 DOT-111 tank cars used to transport hazardous chemicals and that more than 75,000 of those would need to be retrofitted or possibly to be phased out. These tank cars are not usually owned by railroads but by chemical or oil producers and leasing agencies.

Inspection blitzes 

While federal officials work on new safety requirements for DOT-111 tank cars, these cars are out there carrying crude oil, rolling through Pennsylvania daily, said Christina Simeone, director of PennFuture’s energy center, an environmental advocacy group in Pennsylvania.

Simeone said that during the year or so it may take for federal rules to pass, state and local officials should do inspection blitzes of tank cars and rail lines carrying hazardous materials.

The Pennsylvania Public Utility Commission, which works with the Federal Railroad Administration (FRA) to inspect rail operations, is now focused on inspecting tracks and rail equipment that carries crude oil shipments, a spokeswoman wrote in an email.

Railroad officials seem to be willing to communicate information about their shipments to state officials.

The Pennsylvania Emergency Management Agency recently struck an agreement with CSX railroad to get real-time information on the tracking of hazardous material shipments, including crude oil, in the state.

“It will better prepare [state emergency workers] to respond to any incidents that may occur,” said Cory Angell, a spokesman with the agency, who added that his agency is also reaching out to the Norfolk Southern line for a similar agreement.

And officials at both major PA railroads have said they’ve helped train local emergency responders across the state.

Reach Natasha Khan at 412-315-0261 or at nkhan@publicsource.org.

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PublicSource is an investigative news group in Western Pennsylvania. Learn more at publicsource.org.