Category Archives: Pipeline transport

Bakken Crude, Clean-up costs, Derailment, Explosion, Oil prices, Pipeline infrastructure, Pipeline rupture, Pipeline transport, Tar sands crude

Dangerous energy gamble: Pipelines vs. rail

Repost from the Washington Examiner
[Editor: One significant quote among many: “In the last five years, 423 oil trains have crashed in the U.S. Since 2010, those crashes have cost about $45 million in damages. In just the first six months of 2015, 31 oil train crashes cost almost $30 million in damages…. It’s 5.5 times more likely that oil will be spilled during rail transport than from a pipeline, according to a study by the Fraser Institute, an independent Canadian think tank. The risk of deaths, injuries and spills are higher with rail and trucks since vehicles can hit other vehicles, they travel through population centers and the drivers can err. None of those factors exist for pipelines.” – RS]

Dangerous energy gamble: Pipelines vs. rail

By Kyle Feldscher, 11/2/15 12:01 AM
Fire burns at the scene of a train derailment, near Mount Carbon, W.Va., on Feb. 16. Fires burned for nearly nine hours after the train carrying more than 100 tankers of crude oil derailed in a snowstorm. (AP Photo/WCHS-TV)

Energy companies increasingly have turned to rail to ship crude oil during the fracking boom, but with train crashes becoming more frequent, they are pushing for construction of more pipelines beyond the Keystone XL.

However, that effort is being stymied by the collapse of oil prices and concerns about pipeline safety.

On Wednesday, Shell announced it would stop construction on a site in Alberta, Canada, that potentially holds 418 million barrels of bitumen oil. The company blamed the project’s expense in a time of cheap oil as well as a lack of pipeline infrastructure.

It’s one example of low prices and lack of pipelines prompting companies to reconsider drilling for oil, especially in the Canadian tar sands, where it’s more expensive to drill. Pipeline transportation is typically cheaper than rail, which costs about $30 a barrel more.

Fifty pipelines have been proposed to the Federal Energy Regulatory Commission this year. They would carry the light, sweet crude from shale regions as well as the natural gas that has helped make the U.S. the world’s energy leader. ”

Because of the costs associated with [rail], it’s going to drive up the cost of oil and it’s going to be significantly higher than pipelines on a per barrel basis,” said Dan Kish, senior vice president for policy at the conservative Institute for Energy Research.

Another calculation oil companies must make is the safety of their highly flammable product.

In the last five years, 423 oil trains have crashed in the U.S. Since 2010, those crashes have cost about $45 million in damages. In just the first six months of 2015, 31 oil train crashes cost almost $30 million in damages, mostly due to a major crash in West Virginia.

It’s 5.5 times more likely that oil will be spilled during rail transport than from a pipeline, according to a study by the Fraser Institute, an independent Canadian think tank. The risk of deaths, injuries and spills are higher with rail and trucks since vehicles can hit other vehicles, they travel through population centers and the drivers can err. None of those factors exist for pipelines.

The August study also found oil and natural gas production is rising faster than existing American and Canadian pipelines can handle. Those pipelines would be even busier if production increased in the Canadian tar sands.

Keystone XL, proposed by TransCanada in 2007, would be able to transport 830,000 barrels per day from the tar sands to the Gulf Coast to be refined. Due to the viscous nature of bitumen oil, it’s much easier to transport it by pipeline than by rail, experts say.

When a train carrying oil derails, it’s often catastrophic.

In West Virginia, oil burned for days after 26 oil tanker cars derailed in February. Nineteen of those cars caught on fire and oil spilled into a nearby river. The damages from that crash totaled more than $23 million.

A train derailment in a Quebec community that killed 46 people in July 2013 prompted calls for better rail safety and led some to question whether to transport highly flammable oil at all.

The State Department estimates rail transportation of oil is responsible for 712 injuries and 94 deaths per year, while oil pipelines are responsible for three injuries and two deaths per year.

“For our society, we have to evaluate the value we place on human life and we should make that a priority,” said Diana Furtchgott-Roth, a conservative economist who is the director of the Manhattan Institute’s e21 program.

“The families of those 46 people killed in Lac-Megantic would have been happy to have less oil and having the lives of their family members back.”

Dangerous derailments led the Obama administration to introduce new regulations to make tanker cars safer. The rule, announced in May, requires improvements to braking systems, making tanker cars thicker and more fire resistant and new protocols for transporting flammable liquids.

The number of crashes steadily increased during the last five years, as more trains shipped crude and natural gas, rising from nine crashes in 2010 to 144 crashes in 2014. But as the price of oil plummeted, the amount of crude oil being drilled and shipped leveled off in 2015, according to the Energy Information Administration.

If drilling in the Canadian tar sands in Alberta were to pick up in earnest, State Department officials believe rail transport would lead to 49 more injuries and six more deaths per year. If that oil were to be moved by the Keystone XL pipeline, there would be one additional injury and no fatalities.

Environmentalists, who have been fighting the Keystone XL, point to the State Department’s finding that pipeline spills are often bigger than those from trains and trucks.

They also point to declining oil use and the collapse of prices as great excuses to leave it in the ground.

Zach Drennen, legislative associate at the League of Conservation Voters, said with oil prices as low as they are, it’s economic folly for oil companies to drill in the Canadian tar sands. Without high oil prices, companies can’t afford to build pipelines. They also can’t afford to ship by rail.

That is why green groups think oil companies could be willing to leave the oil in the earth.

“If you look right now, a lot of oil companies are just deciding that’s not where they want to put their money at,” Drennen said.

To Kish, environmentalists’ goal is to make it too expensive to drill.

“They’re going to try and fight against every damn pipeline they can,” he said, “because if they can choke off production and delay construction of pipelines, it causes disruptions.”

But Ken Green, senior director of natural resource studies at the Fraser Institute, said environmentalists’ dream of keeping oil in the ground isn’t feasible.

“The oil in the ground has a market value and everyone knows what the market value is,” he said. “It’s not hard to calculate that market value … My assumption is sooner or later, that value will be sought.”

Blast zone, Clean energy, Climate Change, Crude By Rail, Derailment, Explosion, Fossil fuels, Greenhouse gas emissions, Oil spill, Oil trains, Pipeline transport, Renewable energy, Solar energy, Tar sands crude

U.S. Rep. Lois Capps: Oil-by-rail is too risky

Repost from the San Luis Obispo Tribune
[Editor:  See also the follow-up story covering the Cal Poly forum on Oct. 16: “Capps touts clean energy alternatives to Phillips 66 project at Cal Poly forum.”  – RS]

Phillip 66’s oil-by-rail plan is too risky

By Rep. Lois Capps, October 13, 2015
Lois Capps in her office in Washington, D.C.
Lois Capps in her office in Washington, D.C.

The Central Coast was thrust into the national spotlight in May as news broke of an oil pipeline rupture that allowed tens of thousands of gallons of crude oil to spill into the Pacific Ocean.

The ensuing damage devastated wildlife and our sensitive coastline, cost our local economy millions of dollars and put the health of Central Coast residents at risk. Sadly, this is just the most recent reminder of the hazards of drilling for and transporting fossil fuels.

In the months since the spill, I’ve redoubled my efforts to ensure federal agencies update and strengthen pipeline safety standards, prevent new offshore drilling and guarantee that our communities are properly compensated for their losses. And yet, just as the final traces of tar are cleaned from the rocks at Refugio Beach, another serious oil hazard looms on the Central Coast.

As many know, Phillips 66 has applied for a permit through San Luis Obispo County to construct a 1.3-mile rail spur to the Nipomo Mesa refinery. Construction of the new spur would allow the refinery to receive up to five deliveries of crude oil per week, with 2 million gallons aboard each mile-long freight train.

This rail spur proposal comes amidst booming North American oil production and a dramatic expansion across the country in the use of railroads to transport crude oil. Not surprisingly, the increased use of rail to transport oil over the last five years has correlated with a sharp increase in the number of derailments by oil-hauling trains. The increase in oil rail derailments is even more troubling considering the large investments made in recent years to improve rail safety.

The most devastating of these recent accidents occurred in Lac-Mégantic, Quebec, when a 74-car freight train carrying crude oil derailed in a downtown area and several cars exploded, killing 47 people and leveling half of the downtown area with a blast zone radius of more than half a mile.

Approving the Phillips 66 rail spur project would put communities throughout California at risk for a similar tragedy. If approved, communities within 1 mile of the rails would be within the potential blast radius of these crude oil freight trains as they make their way to their final destination in San Luis Obispo County. This is one of the many reasons why I am joining other community leaders, cities and counties throughout the state in opposing this project.

The Plains oil spill near Santa Barbara in May and the Phillips 66 rail spur project debate are both stark reminders of the dangers posed by our continued reliance upon oil and other fossil fuels to meet our energy needs.

We know that this dependence puts our environment, public health and economy at risk due to spills, derailments and the growing impacts of climate change.

With each extreme storm, severe wildfire and persistent drought, we’re reminded of the very real consequences of our continued dependence on fossil fuels.

The truth is that an economy that continues to rely upon fossil fuels is not prepared to succeed in the 21st century.

That is why I have spent my career in Congress advocating for efforts to transition to clean, renewable energy sources that produce the energy we need while also minimizing the greenhouse gas emissions that are driving climate change.

I am proud to say that the Central Coast is leading this transition. With our cuttingedge research universities, two of the largest solar fields in the world and some of the most innovative entrepreneurs and energy companies in the country, I am excited to see what the future holds.

Now, more than ever, we are presented with a wonderful opportunity to pivot away from our reliance on dirty fossil fuels and toward a more sustainable energy future.

That is why I am convening a panel of industry leaders and academic experts for a public forum at Cal Poly’s Performing Arts Center on Friday to discuss how we can continue to expand our clean-energy economy on the Central Coast and across the country.

During the forum, I look forward to discussing the multitude of threats posed by our continued fossil fuel dependence, the progress made toward developing renewable energy sources, and how we can overcome the remaining barriers to fully transition to a cleanenergy future. Please join us this Friday at 1 p.m. as we come together to build a safer, cleaner energy economy suitable to meet the demands of the 21st century.

 

Bernie Sanders, Crude By Rail, Hillary Clinton, Keystone XL, Pipeline infrastructure, Pipeline transport

Hillary Clinton finally says she opposes Keystone pipeline, implies support for oil trains

Repost from the New York Times
[Editor:  Playing both “sides” and giving in to the supposed inevitability of crude by rail, this quote from the article: “Anticipating criticism from backers of the project that her opposition would cost construction jobs, she pledged to soon detail a clean energy policy that would put thousands of Americans to work repairing leaky existing pipelines and improving train tracks that carry oil by rail.”  See Sen. Bernie Sanders’ unequivocal view on Keystone XL.  – RS]

Hillary Clinton Says She Opposes Keystone Pipeline

By Trip Gabriel, September 22, 2015 5:35 pm ET
Clinton described some drug companies as “bad actors making a fortune off of people’s misfortune.” Photo: Gareth Patterson, Associated Press
Hillary Clinton | Photo: Gareth Patterson, Associated Press

Hillary Rodham Clinton said on Tuesday that she opposed building the Keystone XL oil pipeline, revealing her position on an issue that divides two Democratic constituencies, organized labor and environmentalists, and that she has long declined to address.

In announcing her opposition to the project, a litmus test for grass-roots environmentalists and which her rivals for the Democratic nomination had already opposed, Mrs. Clinton said that the pipeline was “a distraction from the important work we have to do to combat climate change.”

She declared her position during a campaign appearance in Iowa and on the day Pope Francis, who has challenged the world to act decisively on climate change, arrived in Washington amid a burst of attention. An aide to Mrs. Clinton said that the campaign had briefed the White House ahead of her announcement.

Mrs. Clinton said that building the nearly 1,200-mile pipeline, which would carry heavily polluting oil from Canada to refineries on the Gulf Coast, was not “in the best interest of what we need to do to combat climate change.”

Anticipating criticism from backers of the project that her opposition would cost construction jobs, she pledged to soon detail a clean energy policy that would put thousands of Americans to work repairing leaky existing pipelines and improving train tracks that carry oil by rail.

There are “a lot more jobs from my perspective on a North American clean energy agenda than you would ever get from one pipeline crossing the border,” she said.

Energy and policy experts have long said that the battle over Keystone XL is chiefly political, because the pipeline would have little effect on either climate change or the United States job market. A State Department analysis last year found the pipeline would not significantly add to carbon pollution, because the oil was already reaching refineries by other pipelines and by rail.

Asked repeatedly about the pipeline since she declared her candidacy this spring, Mrs. Clinton has said that because she initiated a review of the project while secretary of state, it was inappropriate for her to weigh in while the Obama administration studied the issue. While a member of the administration in 2010, she said she was inclined to approve it.

She declined to address the issue even when she rolled out the first phase of a plan in July to produce a third of the nation’s electricity from renewable sources like wind and solar by 2027.

“If it is undecided when I become president, I will answer your question,” Mrs. Clinton told a New Hampshire voter at the time who pressed her on the Keystone question.

She was criticized by Senator Bernie Sanders of Vermont, a staunch pipeline opponent, who said, “I have a hard time understanding that response.”

Last week, Mrs. Clinton moved away from her careful neutrality, telling voters that she was “putting the White House on notice” that she would announce her position shortly, “because I can’t wait.”

In a statement on Tuesday, Mr. Sanders said he was glad Mrs. Clinton “finally has made a decision, and I welcome her opposition to the pipeline.”

Environmental groups also applauded Mrs. Clinton. “Secretary Clinton’s recent clean energy proposal, coupled with her opposition to drilling in the Arctic Ocean and now to Keystone XL, is both inspiring and exciting,” the League of Conservation Voters said in a statement.

Jeb Bush, the former Florida governor seeking the Republican nomination, said on Twitter that Mrs. Clinton’s pipeline opposition means she “favors environmental extremists over U.S. jobs.”

 

Bakken Crude, Crude By Rail, Derailment, Explosion, Federal Regulation (U.S.), Oil prices, Pipeline transport, Rail Safety

Bakken crude: Could pipelines replace the need for oil-by-rail?

Repost from Marcellus.com
[Editor: Significant quote by Rusty Braziel, analyst with RBN Energy: “By 2017 there should be enough pipelines to carry all North Dakota’s crude to market.”  See also “ND shipping only 47% of Bakken crude by train in June” – RS]

Bakken crude: Could pipelines replace the need for oil-by-rail?

By Zach Koppang, August 14, 2015
Image: Mary Schimke / Shale Plays Media
Image: Mary Schimke / Shale Plays Media

The transportation of Bakken crude is beginning to shift away from the railways and into pipelines as production levels off in the wake of last year’s price collapse and more oil and gas pipelines are brought online.

Rusty Braziel, analyst with RBN Energy, explained, “Since 2012 a combination of rail and pipeline has given Bakken producers ample crude takeaway capacity, but pipelines alone have not had sufficient capacity on their own.” Though, as production maintains a consistent rate, pipeline capacity is beginning to catch up. Braziel added, “By 2017 there should be enough pipelines to carry all North Dakota’s crude to market.”

Last week Continental Resources reported that it now ships over two-thirds of its Bakken crude by pipeline, reports Reuters. In the second quarter 2015, the company, North Dakota’s second-largest producer, pushed approximately 160,000 barrels of crude per day through Kinder Morgan owned pipelines. For comparison, it shipped nearly all of its oil by train in 2014. During a conference call, Continental CFO John Hart said, “Approximately 70 percent of our Bakken production is now delivered to market via pipeline.”

Director of RBN Energy Analytics Sandy Fielden said, “As soon as price differentials – especially between domestic benchmark West Texas Intermediate (WTI) and international benchmark Brent – narrowed, then barrels shifted back to pipelines to take advantage of their cheaper tariff rates. Yet significant crude volumes continued to be transported to market from North Dakota by rail because pipeline capacity could not handle the demand.” Recently, however, the planning and construction of new pipelines throughout the region has substantially increased overall shipping capacity, threatening the once booming business of BNSF Railway and others.

The trend is becoming more common as oil producing states, North Dakota included, begin to rely more heavily on pipelines rather than rail transport, which is vulnerable to weather, construction delays and bottlenecks. Transporting oil-by-rail has also become heavily scrutinized following a series of explosive, and sometimes deadly, oil train derailments. The most notable incident occurred in Lac-Megantic, Quebec, where a runaway oil train derailed and killed 47 people. The frequency and severity of derailments has led to increased scrutiny and regulation, much to the dismay of the rail industry.

As reported by Reuters, oil-by-rail shipments have decreased throughout the country by 13 percent in the past year, according to the latest American Association of Railroads data. Also indicative of the decreased interest in crude-by-rail shipments, and the far-reaching effects of the oil price decline, are the recent job cuts at one of the state’s largest rail transloading facilities.

However, Fielden explains, “Just because pipeline capacity is available doesn’t necessarily mean producers will prefer to use that capacity instead of rail.” Over 1 million barrels of oil per day continue to ride U.S. railways en route to refineries on the east and west coasts. Tesoro and BP, for example, opt to receive oil via rail due to the flexibility of the supply contracts when compared to pipeline shipments.

The RBN analysis reports that in theory, as new pipeline projects come online, all Bakken crude could be shipped to market via pipeline. Projects due to begin operating by the end of 2016 and throughout 2017 will expand takeaway capacity by 680,000 barrels per day. Fielden said, “The planning and buildout of a series of new pipelines out of North Dakota that (if they are all built) should increase capacity enough to provide space for all the barrels currently traveling to market from North Dakota by rail.”