[Editor’s note] This SF Chronicle report includes a short video interview with Benicia Mayor Elizabeth Patterson. Unfortunately, the interview is preceded by advertising, and can’t be set to manual play – so I will not embed it here. After reading the text here, click on the link above to see the video on SFGate. The text here very nicely places Valero’s proposal in a wider Bay Area and California context, and then lays out some startling numbers. Worth the read!
Is California prepared for a domestic oil boom?
Published Wednesday, February 26, 2014
The North Dakota oil boom has resulted in more trains going boom. At least 10 trains hauling crude oil from the Bakken Shale across North America have derailed and spilled, often setting off explosions. The deadliest killed 47 people in Lac-Mégantic, Quebec, on July 6, 2013. As California refineries seek to adapt their operations to bring in Bakken crude by rail, Bay Area residents in refinery towns want to know: Will they be safe?
In Solano County, Benicia residents packed a Planning Commission meeting when Valero Refining Co. unveiled a plan to adapt its Benicia refinery to receive crude by rail rather than by ship. In Contra Costa County, Pittsburg residents (as well as state Attorney General Kamala Harris) are concerned about a proposal by West Pac Energy to convert a closed tank farm to an oil storage and transfer facility. Similar worries are voiced in Crockett and Rodeo about a proposed propane and butane project at the Phillips 66 refinery.
Air pollution is the top-line concern for these communities, followed by fear of spills and explosions. Some protests are tied to the larger political debate over importing tar sands oil from Canada.
The refinery operators maintain they are merely trading ship transport for rail transport or upgrading aging facilities.
We do know this: The tangle of laws and agencies that oversee rail transport make it easy to assign blame to someone else and tough to hold any one agency or business accountable. Rail oversight is primarily the federal government’s job, which makes sense for an industry with track in every state. While the state handles pollution, some safety inspections and emergency response, it is unclear how much legal authority it or any other state government has. The Obama administration announced some voluntary safety measures Friday that would slow trains in cities, increase track inspections and beef up emergency response. There’s still work to do be done sorting out who would enforce such rules.
A state Senate committee will meet Monday to begin investigating whether California is prepared to receive hundreds of railcars a day of highly flammable Bakken crude. The legislators are asking: Should we have confidence that the agencies with oversight, the Department of Fish and Wildlife, the California Public Utilities Commission and Caltrans, are up to the job?
We need to know how theses railroads will run safely before more Bakken crude comes in by rail.
More crude riding the rails
85-fold – the increase in the amount of crude oil transported on U.S. railroads since 2006, from 4,700 carloads to 400,000 carloads in 2013, according to a rail industry regulatory filing.
135 times – the increase in the amount of crude transported by rail in California since 2009, from 45,491 barrels in 2009 to 6,169,264 barrels in 2013, according to the California Energy Commission.
1 percent – the portion of crude oil transported into California by rail (most comes by ship). This is projected to increase as more refineries adapt to bring in Bakken crude by rail.
73 degrees Fahrenheit – the flash point of Bakken crude, a lighter oil that contains more volatile organic compounds than other crude oils, as compared with 95 degrees Fahrenheit. “Crude oil being transported from the Bakken region may be more flammable than traditional heavy crude oil,” reported the U.S. Department of Transportation.
State launches “inspection blitz” of rail facilities hauling crude oil
Khurram Saeed, Westchester March 1, 2014
State and federal authorities this week began inspecting facilities used to ship volatile crude oil by rail throughout New York.
The sites include rail yards in Albany and Buffalo, the Port of Albany and its rail yard, as well as tracks and the tank cars that haul the volatile oil.
The inspections are the latest government effort to address growing concerns about increased shipments of crude oil from the Bakken oil fields in North Dakota. The oil travels over approximately 1,000 miles of New York, from Buffalo in the west, down from Quebec to the north and south through the Hudson Valley headed for refineries along the East Coast and Canada.
“We are taking action to safeguard our communities from the potential risk of crude oil shipments by launching more aggressive and enhanced enforcement of rail safety,” said Gov. Andrew Cuomo said Friday. “This inspection blitz has resulted in immediate improvements to some of the state’s busiest rail sites.”
Earlier this week, inspectors from the state Department of Transportation and officials from the Federal Railroad Administration visited the Kenwood Rail Yard in Albany, owned by Canadian Pacific Railway, and the CSX-owned Frontier Rail Yard in Buffalo.
A locomotive hauling a 97-car oil train derailed on Tuesday on CSX’s River Line near Kingston. The 130-mile line, which runs through Rockland, averages about 14 oil trains a week, carrying tens of millions of gallons of Bakken crude.
The state said it inspected 198 DOT-111 type tank cars and three locomotives at the CSX yard. Two of the tank cars had wheel defects, and a few others were found with brake shoe defects. The DOT-111 cars are known to rupture in accidents, and many have called on them to be retrofitted or replaced.
At Kenwood Rail Yard, the joint team found three defective wheels and three defective brake shoes on the DOT-111s. Those defects must be addressed before the cars can leave the yard, the state said.
On Friday, the state Department of Environmental Conservation also began inspecting Global Partners’ major oil storage facility at the Port of Albany. The process is expected to last several weeks.
The inspections of other rail facilities will continue over the coming months.
While the state has sought to improve preparedness and oversight, the federal government is most responsible for railroad and tank car safety.
Rail tanker cars roll through Albany on their way to the port.
Credit: Stewart Cairns for The New York Times
ALBANY — On a clear December morning two years ago, a 600-foot oceangoing oil tanker called the Stena Primorsk left the Port of Albany on its maiden voyage down the Hudson River laden with 279,000 barrels of crude oil. It quickly ran aground on a sandbar.
The incident attracted little attention at the time. The ship’s outer hull was breached, but a second hull prevented a spill. Still, the interrupted voyage just 12 miles south of the port signaled a remarkable turnaround for the state’s capital.
With little fanfare, this sleepy port has been quietly transformed into a major hub for oil shipments by trains from North Dakota and a key supplier to refiners on the East Coast.
Hidden in plain sight, Albany’s oil boom has taken local officials and residents by surprise. Many became aware of the dangers of oil trains after a recent series of derailments and explosions, including one that killed 47 people in Quebec last July, which have generated concerns about growing rail traffic into the city. Trains rumble through the heart of Albany every day and often idle along the busy Interstate 787 highway while waiting to get into the port’s rail yards.
“This has caught everyone off guard,” said Roger Downs, a conservation director at the Sierra Club in Albany.
About 75 percent of Bakken oil production travels by rail and as much as 400,000 barrels a day heads to the East Coast, said Trisha Curtis, an analyst at the Energy Policy Research Foundation. Albany gets 20 to 25 percent of the Bakken’s rail exports, according to various analyst estimates.
“Albany has become a big hub,” Ms. Curtis said.
But opposition is starting to form over new plans by one energy company to expand operations here and, possibly, ship crude extracted from the oil sands of Canada into Albany. The company, Global Partners, which pioneered the use of Albany as a crude-oil hub, is also looking at shipping oil from a terminal in New Windsor, just north of West Point.
The rapid growth in the oil-by-rail business is raising alarms. Railroads carried more than 400,000 carloads of crude oil last year, up from 9,500 in 2008, according to the Association of American Railroads. Federal regulators have been under pressure to address the industry’s safety and recently outlined a series of voluntary steps, including slowing oil trains in some major urban areas.
These steps are not enough to protect many communities along the rail lines, Senator Charles E. Schumer, Democrat of New York, said this week. This includes many places in upstate New York, like Buffalo, Rochester, Utica, Syracuse and Albany, that have seen higher rail traffic. He compared the industry’s use of outdated tank cars to “a ticking time bomb” and urged federal regulators to quickly retire these older cars, known as DOT-111s, in favor of models built after 2011 that have better protections.
“The safety regime has to catch up with the reality that there are now hundreds of cars everyone admits could be dangerous if there is a derailment that are hurtling through heavily populated areas of New York State,” he said in a telephone interview Thursday.
Albany’s newfound role did not happen by chance. It has long served as a regional distribution center for heating oil and gasoline to Vermont. It is linked to the Midwest by rail and is close to many of the East Coast’s major refineries. This coincidence of geography and logistics has made it an ideal trans-shipping point for oil produced in the Bakken region, now about 950,000 barrels a day.
“Early on we saw an opportunity to supply East Coast refiners with cost-effective North American crude oil,” said Eric Slifka, the chief executive of Global Partners, which first brought oil by rail to Albany around the end of 2011. The company doubled its oil-handling capacity to 1.8 billion gallons a year, the equivalent of 118,000 barrels a day, in 2012.
Another energy company, Houston-based Buckeye Partners, made a similar calculation and also expanded its capacity for crude oil in Albany in 2012 to one billion gallons a year, up from 400 million gallons. At the time, state regulators at the Department of Environmental Conservation received no public comment.
“The D.E.C. has done all its studies and analyses, but my guess is just that the community doesn’t like the answer,” Mr. Slifka said in an interview. “I think it’s hard to turn back the clock. At the end of the day, the D.E.C. and government agencies have gone into this with their eyes wide open.”
Trains now come into Albany on average twice a day after completing a four-day journey from North Dakota, either through the Canadian Pacific network, via Montreal, or on the CSX rail lines that pass through Buffalo and Syracuse. These mile-long trains, each up to 120 tank cars long, can carry roughly 85,000 barrels of oil.
Once in Albany, the oil goes into giant storage tanks before being loaded onto barges that make daily trips to refineries down the Hudson. Some trains go to Pennsylvania. Every eight days, a bigger tanker, a Bahamas-flagged ship called the Afrodite, which replaced the Stena Primorsk after its accident, picks up oil destined for Irving Oil’s refinery in Saint John, New Brunswick, which produces gasoline for the American market.
“Bakken crude has been a lifeline for the East Coast refineries,” said Lawrence Goldstein, an energy economist.
Richard J. Hendrick, the Port of Albany’s general manager, said the new traffic had been a boon for the port and the longshoremen who work there. Ships still haul scrap metal to Turkey or large electrical components destined for a power plant in Algeria. But the port’s business has been increased by the oil traffic.
“We can do things faster and more safely here,” Mr. Hendrick said.
But hauling oil on rails comes with unanticipated dangers. After an oil train derailed and exploded near Casselton, N.D., late last year, federal regulators warned that Bakken crude oil was extremely volatile. On Tuesday, they ordered shippers to properly test and classify Bakken crude before loading it onto freight trains.
“Albany is getting a lot of the risk and almost no economic benefits or jobs from this,” said Susan Christopherson, a professor at Cornell University’s Department of City and Regional Planning.
There is not much New York’s officials can do to reduce the flow of oil trains, despite the state’s commitment to low-emission fuels and its opposition to natural gas drilling and hydraulic fracturing. Officials acknowledge that they are powerless since railroad commerce is regulated by the federal government.
Gov. Andrew M. Cuomo nevertheless directed state agencies in late January to review their emergency and spill response plans and report back to him by the end of April. The state’s top environmental and transportation officials met with their federal counterparts last week to discuss the issue.
But there remains considerable uncertainty about how authorities would respond to an accident or a spill in the Hudson River. The Coast Guard conducted a drill in New Windsor last November. The mock event involved the derailment of four train cars and a 50,000-gallon spill in the Hudson from a storage tank.
“We continue to look for ways to improve coordination and response with our federal and local partners and, as directed by Governor Cuomo in his recent executive order, are evaluating the state’s spill prevention, response and inspection program for rail, ship and barge transportation of crude oil and other petroleum products,” said Emily DeSantis, the Department of Environmental Conservation’s spokeswoman.
That is little comfort for a broad coalition of environmental groups, elected city officials and residents, who said state regulators should have better anticipated these risks and are demanding a full review.
Chris Amato, who worked at the D.E.C. from 2007 to 2011 and is now a lawyer at the advocacy group Earthjustice, which is challenging the oil projects, said regulators should have performed a detailed environmental impact study two years ago. “A lot of people are upset that the D.E.C. is still dillydallying,” he said.
Vivian Kornegay, a City Council member, whose district is across from the rail yards and the port, said, “We want a do-over.”
Hundreds of residents attended a public meeting at an elementary school last month, and voiced their concerns over the expansion plans of Global Partners. The meeting focused on a recent application by the company that includes building seven heating units at its rail yard. Some say they believe the company intends to import heavier, dirtier crude from Canada’s oil sands in addition to Bakken crude.
Mr. Slifka, Global’s chief executive, said the heating units were needed to accommodate “any types of U.S. and Canadian crudes that would require heat to be put to them because of the viscosity.”
He added: “Where the crude comes from isn’t necessarily the focus. It’s making sure there is flexibility in the system to take various types of crude.”
Given the new opposition, state officials recently extended the public comment period on Global’s plans until April. They also said they would require the company to be more transparent about its plans, even if it has followed all regulations. The Department of Environmental Conservation is also conducting a review of “all matters pertaining to Global’s operations in New York State,” Ms. DeSantis, the agency’s spokeswoman, said.
“There’s been some clear indications that D.E.C. needs to be a better cop on the beat when it comes to this industry,” said Peter Iwanowicz, the executive director of Environmental Advocates of New York, and a former state official in charge of environmental issues. “But we can’t look back in the windshield. The reality is that Albany is now part of the oil patch.”
A version of this article appears in print on February 28, 2014, on page B1 of the New York edition with the headline: Bakken Crude, Rolling Through Albany.
Data Show Oil From North Dakota, Mostly Carried by Rail, Is More Combustible Than Other Types
By Russell Gold Feb. 24, 2014 12:15 p.m. ET
Crude oil from North Dakota’s Bakken Shale formation contains several times the combustible gases as oil from elsewhere, a Wall Street Journal analysis found, raising new questions about the safety of shipping such crude by rail across the U.S. –
Federal investigators are trying to determine whether such vapors are responsible for recent extraordinary explosions of oil-filled railcars, including one that killed several dozen people in Canada last summer.The rapid growth of North Dakota crude-oil production—most of it carried by rail—has been at the heart of the U.S. energy boom. The volatility of the crude, however, raises concerns that more dangerous cargo is moving through the U.S. than previously believed.Neither regulators nor the industry fully has come to terms with what needs to be done to improve safety. But debate still rages over whether railcars need to be strengthened, something the energy industry has resisted.”Given the recent derailments and subsequent reaction of the Bakken crude in those incidents, not enough is known about this crude,” said Sarah Feinberg, chief of staff at the U.S. Transportation Department. “That is why it is imperative that the petroleum industry and other stakeholders work with DOT to share data so we can quickly and accurately assess the risks.”The Journal analyzed data that had been collected by the Capline Pipeline in Louisiana, which tested crude from 86 locations world-wide for what is known as vapor pressure. Light, sweet oil from the Bakken Shale had a far higher vapor pressure—making it much more likely to throw off combustible gases—than crude from dozens of other locations.Neither federal law nor industry guidelines require that crude be tested for vapor pressure. Marathon Petroleum Corp., which operates Capline, declined to elaborate on its operations except to say that crude quality is tested to make sure customers receive what they pay for.
According to the data, oil from North Dakota and the Eagle Ford Shale in Texas had vapor-pressure readings of over 8 pounds per square inch, although Bakken readings reached as high as 9.7 PSI. U.S. refiner Tesoro Corp., a major transporter of Bakken crude to the West Coast, said it regularly has received oil from North Dakota with even more volatile pressure readings—up to 12 PSI.
By comparison, Louisiana Light Sweet from the Gulf of Mexico, had vapor pressure of 3.33 PSI, according to the Capline data.
Federal regulators, who have sought information about vapor pressure and other measures of the flammability and stability of Bakken crude, have said the industry hasn’t provided the data despite pledges to do so.
The industry’s chief lobbying group said it was committed to working with the government but that historically it hadn’t collected the information. The energy industry has resisted the idea that Bakken Shale oil’s high gas level is contributing to oil train explosions, but the American Petroleum Institute is revisiting the question.
David Miller, head of the institute’s standards program, said a panel of experts would develop guidelines for testing crude to ensure it is loaded into railcars with appropriate safety features.
The rapid growth in transporting oil by rail was rocked by several accidents last year. Last summer a train loaded with 72 cars of crude exploded, leveling downtown Lac-Mégantic, Quebec, and killing 47 people. Later in the year, derailed trains exploded in Alabama and North Dakota, sending giant fireballs into the sky.
Most oil moving by rail comes from the Bakken Shale, where crude production has soared to nearly a million barrels daily at the end of last year from about 300,000 barrels a day in 2010.
The rapid growth in Bakken production has far outpaced the installation of pipelines, which traditionally had been relied on to move oil from wells to refineries. Most shale oil from Texas moves through pipelines, but about 70% of Bakken crude travels by train.
Bakken crude actually is a mixture of oil, ethane, propane and other gaseous liquids, which are commingled far more than in conventional crude. Unlike conventional oil, which sometimes looks like black syrup, Bakken crude tends to be very light.
“You can put it in your gas tank and run it,” said Jason Nick, a product manager at testing-instruments company Ametek Inc. “It smells like gasoline.”
Equipment to remove gases from crude before shipping it can be hard to find in the Bakken. Some Bakken wells are flowing so quickly that companies might not be able to separate the gas from the oil, said Lynn Helms, director of North Dakota’s Department of Mineral Resources. “At a really high flow rate, it is just much more difficult to get complete gas separation,” he said.
There also is a financial benefit to leaving gaseous liquids in the oil, because it gives companies more petroleum to sell, according to Harry Giles, the retired head of quality for the U.S. Energy Department’s Strategic Petroleum Reserve.
The federal government doesn’t spell out who should test crude or how often. Federal regulations simply say that oil must be placed in appropriate railcars.
There are three “packaging groups” for oil, based on the temperatures at which it boils and ignites. But these tests don’t look at how many volatile gases are in the oil, and that is the industry’s challenge, according to Don Ross, senior investigator with the Transportation Safety Board of Canada.
Without clear guidance, some oil producers simply test their crude once and generate a “material safety data sheet” that includes some broad parameters and characteristics.
Much of the oil industry remains resistant to upgrading the 50,000 railcars that are used to carry crude oil, saying it would be too time consuming and expensive. The problem, they argue, isn’t the cargo but a lack of railroad safety.
—Laura Stevens and Tom McGinty contributed to this article.
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