Three crude oil stories in today’s North American press:
Site of December 2019 CP oil train accident site, with the derailment looking south. Transportation Safety Board of Canada / CC BY-NC-ND 2.0
Canadian Town Evacuated After Another Oil Train Derails and Burns
From EcoWatch, by Justin Mikulka, DeSmog, Feb. 07, 2020
Early in the morning of Feb. 6, an oil train derailed and caught fire near Guernsey, Saskatchewan, resulting in the Canadian village’s evacuation. This is the second oil train to derail and burn near Guernsey, following one in December that resulted in a fire and oil spill of 400,000 gallons…. [more, including drone footage]
Canada to impose speed limits on trains carrying dangerous goods after crash
Reuters, by David Ljunggren, Rod Nickel, February 6, 2020
OTTAWA/WINNIPEG, Manitoba – Canada said on Thursday it would impose temporary speed limits on trains hauling dangerous goods after a Canadian Pacific Railway Ltd crude oil train derailed and caught fire.
The accident, which happened in the early hours of Thursday near Guernsey, Saskatchewan, was the second derailment in the area in a span of two months.
Federal Transport Minister Marc Garneau said that effective at midnight Friday (0500 GMT), trains hauling more than 20 cars of dangerous goods would be limited to 25 mph across the country for the next 30 days.
The limit in urban areas will be 20 mph, he told reporters…. [more]
Whiting proposes expansion of oil conditioning facility
Whiting Oil and Gas plans to expand an oil conditioning facility in Mountrail County to accommodate climbing production. The expanded facility would handle up to 65,000 barrels per day of oil, a 20,000-barrel increase over its current capacity, according to an application Whiting filed with the PSC. The oil, once conditioned, would then be taken by pipeline to market.
…Oil production statewide has climbed to 1.52 million barrels per day, 140,000 barrels higher than a year ago.
…Oil typically undergoes a conditioning process as soon as it’s extracted from underground, said Katie Haarsager, a spokeswoman for the North Dakota Oil and Gas Division. It’s often sent through a heater-treater, which separates the oil from natural gas and saltwater.
The oil must be processed so that its vapor pressure level does not exceed 13.7 psi before it can be transported by pipeline, train or truck. North Dakota’s limit of 13.7 psi is based on a national standard for stable crude of 14.7 psi and builds in 1 psi as a margin of error. That limit has been the subject of controversy from environmentalists and rail safety advocates following fiery oil train derailments. [more]
Dangerous oil trains moving along Texas gulf coastline – 30,000 barrels per day
Crude Summit: Valero grows Mexico rail flows
By Sergio Meana & Elliot Blackburn, Argus Media, 04 February 2020
Valero increased the volume of refined products sent by rail to Mexico last year to roughly 30,000 b/d, up from about 2,000 b/d just two years ago, chief executive Joe Gorder said today.
The US independent refiner reached into the recently-opened Mexican market through a combination of joint ventures with local partners and building out its own storage infrastructure, Gorder said during the Argus Americas Crude Summit in Houston, Texas. Valero railed gasoline and diesel from its Texas refineries, including four along the coast and its landlocked 200,000 b/d McKee refinery in the Texas Panhandle.
The company has six fuel storage agreements that give the company 5.8mn bl of storage capacity in Mexico, but fuel pipeline capacity is still constrained in the country and mostly only used by state-owned Pemex.
“We invested in some terminal assets,” Gorder said. “We have got joint ventures around several, and we are actually railing a lot of barrels into Mexico rather than waiting for the pipeline infrastructure to be built.”
Franchisees opened the first Valero-branded retail fuel station in Mexico last week, Gorder said, with two more now opened since. Valero in Mexico said it plans to open 15 retail fuel stations in the next three months.
For Gorder the US Gulf coast is the most efficient refined product center as it has an able and affordable workforce, access to feedstocks and multiple transportation options.
“We have got all the advantages to be a supplier to the world,” Gorder said. “It is going to be some time before [Mexico] will be able to satisfy their own demands if ever. And so it is a logical, natural market for us.”
Valero exported 343,000 b/d of fuels in 2019 to all markets.
[Today’s news is welcome. Rep. Garamendi doesn’t represent Benicia, but he does represent uprail cities that would have been affected by Valero’s dangerous and dirty proposal to bring oil trains across California. Garamendi’s bill, HR 5553, has 4 co-sponsors, but does not include Benicia’s representative Mike Thompson. Let’s hope Mike will get behind this effort! – R.S.]
John Garamendi introduces crude-by-rail safety bill
Vallejo Times-Herald, by Nick Sestanovich, January 9, 2020
U.S. Rep. John Garamendi, CA 3rd District
Rep. John Garamendi, D-Solano, introduced legislation Wednesday to ensure safer standards for the transport of crude oil and other hazardous materials by train.
House Resolution 5553, also known as the “Crude By Rail Volatility Standards Act,” aims to establish a safety standard for the maximum volatility for crude oils and similar materials transported by rail. It also requires that all crude by rail in America adhere to the New York Mercantile Exchange’s maximum Reid vapor pressure for crude-oil futures contracts of 9.5 pounds per square inch, Garamendi’s office wrote in a news release.
The current industry standard would remain in place until the Pipeline and Hazardous Materials Safety Administration (PHMSA) completes the rule setting a maximum volatility standard that was first announced in 2017 after the attorneys general of six states, including California, petitioned the U.S. Department of Transportation and PHMSA to finalize the regulation nationwide.
“Every day we delay the implementation of a stronger safety standard for the transport of Bakken crude oil-by-rail, lives are at risk,” Garamendi said in a statement. “My bill simply requires oil companies to decrease the volatility to market levels, rather than carrying unstable products through communities. I am committed to enacting this legislation into law this year as part of the surface transportation reauthorization.”
Garamendi, who is a senior member of the House Committee on Transportation and Infrastructure, has been trying to get legislation passed since 2015 to prohibit crude oil from being transported by rail unless it adheres to the New York Mercantile Exchange’s maximum Reid vapor pressure. Garamendi’s office wrote that the actions were influenced by numerous crude-by-rail derailments in previous years, including an accident in Lac-Megantic, Quebec in 2013 which killed 47 people and led to changes in operations for Canadian railways.
The topic of crude by rail became a hot-button issue in Solano County in 2013 when the Valero Benicia Refinery announced plans to extend rail lines to have crude-oil delivered to its plant by train rather than by boat. The project — which would have passed through Dixon, Suisun City and Fairfield — was met with opposition and was subsequently voted down by the Benicia Planning Commission and then the City Council.
Garamendi’s co-sponsors on the bill are Reps. Barbara Lee, D-Oakland; Bill Foster, D-Ill.; Nita Lowey, D-N.Y.; and Jamie Raskin, D-Md.
Chemical safety measure is latest Obama-era rule to be eased
White House says it can protect both public and businesses
Bloomberg News, by Ari Natter and Jennifer A Dlouhy, Nov 22, 2019
The Trump administration’s move to relax an Obama-era chemical safety regulation put in place after an explosion at a fertilizer plant is the latest example of the White House easing rules established in the wake of disasters.
Trump’s professed goal of rolling back “job-killing” regulations has led to weakening mandates proposed or enacted after three of the worst industrial accidents of the last decade: The 2010 Deepwater Horizon oil spill in the Gulf of Mexico, the 2011 Fukushima nuclear plant meltdown in Japan and 2013 derailment and explosion of an oil train in Canada.
Smoke billows from controlled oil burns near the site of the BP Plc Deepwater Horizon oil spill in the Gulf of Mexico, 2010. Photographer: Derick E. HingleBloomberg
“There is a clear pattern of the Trump administration targeting rules that were put in place in response to massive public health, safety, and environmental disasters,” said Amit Narang, a regulatory policy expert with the watchdog group Public Citizen. “The public expects our government to respond to these types of public disasters with regulations that protect them.”
Backers of Trump’s drive to repeal rules say that there is a natural rush to regulate after a high-profile disaster that can go too far.
“Some of these rollbacks come with the wisdom of time to say ‘we went further then we needed to go now that we have more information,’” said Dan Bosch, director of regulatory policy for the American Action Forum, a Republican-aligned think tank.
Representatives of the White House reject the notion the rollbacks risk safety.
“Those trying to connect any health and safety risks across the country” to those efforts “are dangerously wrong — there is no evidence to support such ridiculous claims,” said Chase Jennings, a spokesman for the White House Office of Management and Budget. “The administration is focused on relieving undue burdens and protecting public health and safety.”
Still, the changes have set off alarm bells with public safety advocates.
“They have picked out some of the most important safety regulations,” said Fred Millar, an independent rail consultant. “The Trump deregulation bank has a withdrawal window that’s wide open and industry is taking advantage.”
In 2015, the U.S. Transportation Department imposed regulations meant to address a series of fiery crude-train derailments, most notably the one that killed 47 people in Lac-Megantic, Quebec. Canadian officials determined that a crew member’s failure to appropriately secure the train was one of nearly 20 causes of the derailment.
U.S. regulators mandated, over the objections of the industry, electronically controlled pnuematic brakes to shorten stopping distances. But that measure was rescinded by the Trump administration, which cited a lack of research showing the brakes were better and questions over whether the benefits were justified by the costs.
In some cases, the Obama rules have been left intact while some key provisions have been eased. That opens the administration to complaints it is rolling back safeguards even when it keeps many pieces untouched.
For example, the Environmental Protection Agency’s decision to rescind portions of a risk management law following the 2013 fertilizer explosion that killed 15 people in West, Texas, retained provisions cheered by safety advocates such mandating coordination with first responders and emergency exercise requirements.
But it axed mandates that required more public disclosure about what chemicals are stored at industrial sites, automatic third-party audits after accidents and a rule that companies assess safer technology options as a way of reducing risk.
That was also the case with the White House’s decision to relax some of the mandates imposed by the Obama administration in response to the Deepwater Horizon disaster that killed 11 workers and unleashed the worst oil spill in U.S. history.
In May, the Interior Department rewrote about a fifth of that 2016 Obama rule, easing mandates for real-time monitoring of offshore operations and third-party certifications of emergency equipment.
But the department rebuffed oil industry pressure to lift a specific requirement for how much pressure must be maintained inside wells to keep them in check. Instead, companies now can apply for exceptions to that “safe drilling margin” requirement earlier in the permitting process.
The Nuclear Regulatory Commission, with three of its five members Trump appointees, voted 3-2 in January to strip down a rule requiring nuclear plants to upgrade their protection against flooding and earthquakes that was meant to prevent a Fukushima-style meltdown from occurring in the U.S.
The nuclear industry argues that rather than redesign facilities to address increased flood risks, it’s enough to focus on storing emergency generators, pumps, and other equipment in concrete bunkers.
Edwin Lyman, acting director of the Nuclear Safety Project at the Union of Concerned Scientists, disagrees.
“It’s just bad science and bad policy because of the philosophy that we are not going to impose any new regulations,” Lyman said. “It’s dismissing science, it’s not taking into account the impact of climate change that could lead to more severe flooding events.”
OTTAWA/WINNIPEG, Manitoba – Canada said on Thursday it would impose temporary speed limits on trains hauling dangerous goods after a Canadian Pacific Railway Ltd crude oil train derailed and caught fire.
Whiting Oil and Gas plans to expand an oil conditioning facility in Mountrail County to accommodate climbing production. The expanded facility would handle up to 65,000 barrels per day of oil, a 20,000-barrel increase over its current capacity, according to an application Whiting filed with the PSC. The oil, once conditioned, would then be taken by pipeline to market.
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