Category Archives: State regulation

Crude By Rail, Emergency Readiness & Response, Federal pre-emption, Federal Regulation (U.S.), Local Regulation, Rail Safety, State regulation, Tank car design

League of California Cities: Policy & Advocacy on Oil by Rail

Repost from The League of California Cities


Oil by Rail

Since summer 2014, the League of California Cities has been carefully monitoring transport of crude oil and other hazardous materials by rail. Staff has researched this issue as part of an ongoing effort to educate our members, and to better advocate for improved rail safety.

To that end, the League has taken the following actions on this issue:

  1. September 2014: Hosted a meeting on Oil by Rail, as part of the proceedings of the League’s Annual Conference in Los Angeles, to update members on recent state legislative and budgetary actions geared toward improving rail safety and improving first responder capability to address derailments involving hazardous materials
  2. September 2014: Issued a Comment Letter to the Department of Transportation on the pending federal rulemaking on rail safety improvements. In that letter, the League called for improved information flow to, and improved training for, first responders, as well as requiring improved safety features for tank cars transporting crude oil, which had already been recommended by federal regulatory agencies.
  3. October-November 2014: Held a series of educational webinars for League members (see links below). The goals of these webinars were to enhance members’ understanding of the transport of hazardous materials by rail generally, the extent of federal pre-emption of rail safety regulations, and the narrow remainder in which local governments are allowed to regulate.  Finally, staff shared with League members the League’s draft policy for safety recommendations to help guide local advocacy efforts on this issue with federal agencies and the relevant federal representatives.
  4. February 2015: Featured in Western City, the League’s monthly magazine, a cover article on this issue, entitled “A Growing Risk: Oil Trains Raise Concerns” by Cory Golden.
  5. February 20, 2015: The League Board of Directors approved the draft Recommendations for Improved Rail Safety as the League’s official policy.  These recommendations were based on common themes that arose in multiple state regulatory entities’ comment letters, including the Office of Emergency Services, the California Interagency Rail Safety Working Group, and the California Public Utilities Commission.
  6. March 6, 2015: League of California Cities Executive Director Chris McKenzie issued a letter to U.S. Transportation Secretary Anthony Foxx, submitting ten key recommendations for improving rail safety based on the League’s newly adopted policy, and requested expedited action on their implementation. The letter emphasized that the requested changes be implemented as mandates, rather than recommendations to the relevant industries, that they be accompanied by hard deadlines, and finally, that they be included in the final rule for the Safe Transportation of Crude Oil and Flammable Materials currently under consideration by federal authorities.

Below are links to many of the items referred to above, as well as a sample letter for local jurisdictions to use in advocating to their federal elected officials and to Transportation Secretary Foxx.

Background Materials

Additional Resources

Bakken Crude, Flaring, Oil conditioning, Oil producers, State regulation

North Dakota legislators trying to gut recent new safety regulations

Repost from The Jamestown Sun, Jamestown, ND

Changes to energy taxes would be a blunder

By The Forum of Fargo-Moorhead, Jan 22, 2015

A group of North Dakota legislators have introduced legislation aimed at gutting two of the state’s most significant regulatory decisions involving oil and gas. A bill could nullify requirements to ratchet down the massive wasteful flaring of natural gas and to impose standards to make crude oil less volatile before shipment by rail. It also would risk forfeiting $112 million in revenues during a two-year budget period. The question is why?

House Bill 1187, whose primary sponsor is Rep. Keith Kempenich, R-Bowman, is a naked attempt by a handful of legislators to override the executive function of the North Dakota Industrial Commission, comprised of the governor, attorney general and agriculture commissioner, all elected by voters statewide. Members of the Industrial Commission — after lengthy consideration and input from industry and the public — imposed regulations that will force industry to curb the massive, wasteful flaring of natural gas and to make crude oil less explosive.

Kempenich, in trying to justify his sweeping bid to weaken executive authority, complains that the Legislature was “left out of the loop” in decisions that are squarely before the North Dakota Industrial Commission as ultimate overseers of oil and gas. He glibly dismissed the flaring reduction goals — standards based on lengthy testimony with considerable input from industry — as “arbitrary,” and wants to make them go through a rule-making process that would involve lawmakers.

Where is the public clamor to roll back gas flaring? Halting progress on reducing flaring would cost an estimated $18.8 million per biennium in lost revenues. The state’s top staff regulator has said reaching the next tier of flaring reduction goals will be a “real stretch,” but officials say the Industrial Commission has leeway to grant flexibility in implementing its order, if deemed reasonable.

Where is the public outcry for softening standards to reduce the volatility of explosive Bakken crude oil? Not in Casselton, which last year dodged a massive explosion after an oil train derailment near the town. The order to “condition” oil before shipment carries an estimated cost of just 10 cents per barrel. But failure by the state to make oil safer for shipment could trigger more costly federal regulations that also could deprive the state of $93 million in revenues over a two-year budget cycle.

There is, of course, no public outcry to reverse either of these orders and send them through a legislative sideshow. Instead, Kempenich and his legislative accomplices have their ears attuned to the oil industry, which wants to exploit the drop in oil prices as an excuse to roll back sound regulations. The stewardship of North Dakota’s natural resources — and especially the safety of its citizens — shouldn’t be put in jeopardy. Lawmakers should kill Kempenich’s boondoggle.

Federal pre-emption, Federal Regulation (U.S.), State regulation

Are California foie gras, oil train court cases on parallel tracks?

Repost from McClatchyDC News
[Editor: Despite the curious analogy to foie gras, this is a SERIOUS discussion of Federal pre-emption and California’s attempt to regulate crude by rail.  Apologies for the auto-play video.  – RS]

Are California foie gras, oil train court cases on parallel tracks?

By Curtis Tate, January 15, 2015
US NEWS RAIL-SAFETY 1 WA
On April 30, 2014, a CSX train carrying Bakken crude oil derailed in downtown Lynchburg, Va. No one was injured or killed but three tank cars went into the James River, spilling 30,000 gallons of oil and igniting a fire. CURTIS TATE — TNS

WASHINGTON — Perhaps the only imaginable connection between trains and foie gras, the famous French delicacy obtained by force-feeding duck or geese to fatten up their livers, would be as an appetizer in the dining car of the luxury Orient Express.

Ah. Pas vrai.

A California court recently overturned the state law against selling foie gras because poultry regulation is a federal concern. And that’s just what the railroad industry is arguing about a state law enacted last year requiring it to develop oil spill response plans.

The law came about as an expected increase in crude oil transported to California by rail raised concerns about public safety and emergency response.

Like the restaurants that serve foie gras and the industry that supplies it, railroads have decided they won’t be forced to swallow a state law that they think is pre-empted by a federal one.

In the foie gras case, a producer and a restaurant that served it argued that California’s attempt to choke off sales ran afoul of the federal Poultry Products Inspection Act. Last week, a U.S. district judge agreed, citing the Supremacy Clause of the Constitution, which gives Congress the ability to displace state laws.

Similarly, the Association of American Railroads, the rail industry’s principal advocacy organization, and two of California’s major railroads, Union Pacific and BNSF, argue that the Federal Rail Safety Act derails the state’s oil spill response requirements.

According to some attorneys who know the issue well, California’s law is heading to the end of the line.

“I don’t think the court will struggle with this,” said Kevin Sheys, a Washington attorney who advises railroads but has no involvement in the California case. “The law will be struck down.”

Environmental groups, however, argue that other federal laws apply to the railroads. Patti Goldman, a Seattle-based attorney with Earthjustice, an environmental group, said the Clean Water Act and the Oil Pollution Act, the latter passed in response to the Exxon Valdez oil tanker disaster, gave states the power to enact stricter oil spill response requirements than federal ones.

That’s in contrast to the Federal Rail Safety Act, which doesn’t allow states much room to exceed what’s required at the federal level. A court decision that weighs more heavily on the rail safety act would favor the railroads. A reliance on federal water pollution laws would favor the state.

“The structures for pre-emption in there are almost polar opposite,” Goldman said. “The federal government sets a minimum standard, and the states can go further. All of that is a structure that is meant to preserve state authority.”

Sometimes pre-emption works in California’s favor. Opponents of the state’s $68 billion high-speed rail system tried to slow down the project by arguing that it was subject to the California Environmental Quality Act and required extensive impact reviews.

But in a 2-1 ruling last month, the federal Surface Transportation Board said the project was exempt from the state law. Last week, state and federal officials, including Gov. Jerry Brown, broke ground on the project in Fresno.

As a more practical matter, railroads have largely prevailed in pre-emption cases because courts have been sympathetic to the notion that a patchwork of 50 different state laws could unreasonably burden interstate commerce.

In a notable case in Washington, D.C., a decade ago, a federal court struck down a local law that prohibited the shipment of hazardous materials by rail within two miles of the Capitol. A busy CSX freight line runs only blocks away, and the law would have forced lengthy and expensive detours of hazardous cargo.

But a massive increase in the transportation of crude oil by rail in recent years, and with it an increase in high-profile accidents, has exposed gaps in safety and emergency preparedness. California is bracing for a big increase in crude by rail, and last year the legislature extended the state’s oil spill response requirements to cover inland waterways.

That, naturally, affected railroads, which historically followed rivers because of the level terrain for heavy trains, including California’s Feather and Sacramento rivers.

The Association of American Railroads declined to comment on the California case, but spokesman Ed Greenberg noted that railroads “have extensive emergency plans in place, which include procedures in working with local first responders” and have “stepped-up emergency response capability planning and training.”

David Beltran, a spokesman for California Attorney General Kamala Harris, who’s defending the law, wouldn’t comment on the case beyond what’s in court filings.

State Sen. Jerry Hill, a San Mateo Democrat, said the attorney general’s office had assured him that the law wouldn’t be pre-empted when it came before his committee last year.

“We feel comfortable based on the legal opinions we have,” Hill said.

He thinks it’s premature to predict that the law will be invalidated. But Hill said that he and others who supported it should be prepared for that outcome.

“Everyone would regroup and try to find a way to meet the goals that we’re trying to achieve,” he said.

Harris, who’s said she’ll run next year for the U.S. Senate seat of retiring Democrat Barbara Boxer, also defended the foie gras ban. She tried to have that suit dismissed by arguing that she had no present intent on enforcing the law while reserving the right to do so.

That prompted a quip from Judge Stephen Wilson in his 15-page ruling striking it down: “Defendant seeks to have her paté and eat it, too.”

Harris made a similar argument in the rail case.

“I think it’s going to be decided the same way,” said Mike Mills, an oil and gas attorney in Sacramento. “I don’t see a different outcome.”

Mills said the California case might put a federal solution on a faster track.

The U.S. Department of Transportation issued an Advance Notice of Proposed Rulemaking in August for a new regulation that would require railroads hauling crude oil to have comprehensive oil spill response plans. The rule would apply uniformly across all states, and it would achieve what California tried to do on its own.

“Oftentimes, litigation will produce a decision that forms the basis for new legislation,” Mills said. “Potentially, it could happen.”

Crude By Rail, Emergency Readiness & Response, Funding for emergency response, State regulation, Washington State

Washington State: two competing bills to strengthen oil train safety

Repost from Crosscut.com / Under The Dome, Seattle WA

Oil train safety draws quick attention in Olympia

A Republican proposal has already gotten a hearing, and a Democratic one is ready to roll.

By John Stang, January 15, 2015
Tank cars hours after they derailed under the Magnolia Bridge in Interbay.
Tank cars hours after they derailed under the Magnolia Bridge in Interbay. Bill Lucia

Two competing oil-train safety bills have come into quick play in the Washington Senate.

A Republican measure, proposed by Sen. Doug Ericksen of Ferndale, received a hearing on Thursday before the Senate Environment, Energy & Telecommunications Committee, which he chairs. Also on Thursday, Democratic Sens. Christine Rolfes of Bainbridge Island and Kevin Ranker of Orcas Island introduced a bill to cover what Gov. Jay Inslee wants to do.

A preliminary Washington Department of Ecology study, released late last year, said that rapid increases in the amount of oil moving by rail in the state require new measures to protect the public and the environment.

Both bills increase per-barrel oil taxes to cover emergency response and planning expenses. Rolfes’ bill would impose charges on both crude and refined oil, while Ericksen’s addresses solely crude oil. Rolfes’ bill requires advance notice to the state of crude and refined oil going by rail, pipe or ship. Ericksen’s bill does not have those provisions.

Ericksen’s bill pays considerable attention to mapping out oil-emergency response plans by region across the state. And the Ericksen measure has more detailed provisions about providing state grants to emergency-service responders.

Thursday’s hearing had railroad, port and oil representatives supporting Ericksen’s bill, while environmental groups contended it did not go far enough.

Bruce Swisher of the Sierra Club argued that the bills must make information about upcoming oil train shipments available to the public as well as emergency departments. “The communities, not just the first responders, need transparency about what goes through their communities,” Swisher said.

Johan Hellman, representing the BNSF Railroad, said the company spent $125 million on track and crossing upgrades in Washington in 2013 and another $235 million in 2014. The railroad has also trained roughly 4,000 first responders in Washington on dealing with train derailments, he said.

In a statement, Ericksen said, “We’re trying to identify the gaps in existing programs and fill them.”

In 2013 and 2014, the United States had four oil train accidents that produced fires — one in North Dakota, one in West Virginia and two in New England. Closer to home, three 29,200-gallon oil cars on a slow-moving train derailed without any spills or fire beneath Seattle’s Magnolia Bridge last July. Looming over this entire issue is a July 2013 oil train explosion in Quebec that killed 47 people.

The report by experts hired by the state Ecology Department mapped out the oil transportation situation in Washington and the United States. Nationally, the number of rail cars transporting crude oil grew from 9,500 in 2008 to 415,000 carloads in 2013. In 2013, 8.4 percent of oil arriving at Washington’s five refineries came by rail, although the report indicates that the volume of oil shipped by rail to the refineries here was insignificant until 2011.