Category Archives: Tank car design

CSX Railing More Crude, Warns Against Dropping Train Speeds

Repost from Natural Gas Intel’s Shale Daily

CSX Railing More Crude, Warns Against Dropping Train Speeds

Richard Nemec, July 18, 2014
Carloads_Of_Crude-20140717

Florida-based CSX Corp. senior executives on Wednesday underscored the continuing growth in the amount of crude oil being shipped by rail and voiced concerns about proposed federal regulations that would drop average train speeds in response to a series of tank car accidents in the past 18 months (see Shale Daily, Aug. 22, 2013).

Executives offered their comments as part of a 2Q2014 conference call. CSX earned $529 million (53 cents/share) in 2Q2014, compared with year/ago earnings of $521 million (51 cents). Record revenues were $3.2 billion, up 7% from 2Q2013.

CSX CEO Michael Ward and Executive Vice President Clarence Gooden talked about the robust crude oil shipping market. Coal shipments are expected to remain higher, too, as natural gas prices hover at about $3.50/Mcf.

“The biggest part of our surge [in business] on our northern network was driven by crude-by-rail and our coal business,” Gooden said. “Our coal business was much higher than expected primarily as a result of [high] gas prices, a colder winter and utility responses.”

Gooden said he sees future crude shipment expansions along the East Coast. “There are expansions there going on as we speak,” he said. “They are predominantly in the Philadelphia and New Jersey areas; we have two customers that are looking at expanding in the Jersey area.”

Every week, CSX is averaging about 2,014 oil tank cars and 20 trains with crude-by-rail, Gooden said. “We could see some slight increases in that going forward, although there are some finite limits for what the Bakken [Shale] can produce and the refiners can process.”

On the question of proposed new federal rail regulations from the Pipeline and Hazardous Materials Safety Administration (PHMSA), Ward said the industry is concerned about a proposed requirement to slow trains to 30 mph. In the longer term, he expects regulators to heed the industry’s warning about that proposed rule.

“While we have not seen the proposals, we have heard that a 30 mph speed limitation is one of the options being considered, and we think that would severely limit our ability to provide freight service to our customers, and also provide passenger and commuter services,” Ward said. “There are all kinds of corollary impacts of this.

“I would hope as we look at this with the federal government that we can show the modeling of how disastrous that could be for fluidity of the entire U.S. rail system as well as the impact on [long-haul] trucking. We think cooler heads will ultimately prevail” among federal regulators.

Other parts of the proposed federal rulemaking due to recent crude rail car derailments have the full support of the CSX executives, such as the proposed crude rail tank car designs (see Shale Daily,May 7).

“We’re quite excited about the potential for the new car design as well as the retrofits to the existing cars, and that is part of the proposed rulemaking [at PHMSA],” said Ward, adding that CSX has “done a number of things” to improve safety. “We think the next big thing to make things better is a stronger car for newbuilds as well as the retrofit to existing cars.”

Two studies: Bakken crude by rail – safety and volatility

[Editor: The following studies were recommended to me by a neighbor who supports Valero’s crude by rail proposal.  Both are loaded with valuable information, useful to anyone who wants facts to back up an argument for or against Valero’s project.  You can download the document by clicking on the green text.   Thanks, neighbor!  – RS] 

Center for Strategic and International Studies –
Safety of Crude Oil by Rail

By David Pumphrey, Lisa Hyland, and Michelle Melton, March, 2014

Summary

In the last several years, rail has come to play an important role in the transportation of growing U.S. crude oil production. Over the last seven months, a number of serious accidents have resulted in intense review of the safety of shipping large quantities of oil by rail. The focus has been on classification of the oil, the integrity of tank cars, and rail operations. Regulatory processes have been initiated to attempt to deal with these issues in a timely manner. This issue analysis provides facts that illuminate the players, concerns, current status of regulatory action, as well as the potential issues going forward.

Further regulation of crude by rail is a near certainty, but the ultimate scope and pace remains unclear. Whether regulatory action actually slows down what has become a burgeoning transportation option for crude oil producers and refiners is an open question. It is increasingly unlikely that regulatory action—unless truly drastic—will stop shipment of crude by rail. However, moving forward, regulatory action such as phasing out older tank cars, rerouting trains, or imposing stringent requirements for testing, could impact the economics of crude by rail.   [MORE – a 9-page report in PDF format]

Congressional Research Service –
CRS Report – Crude Oil Properties Relevant to Rail Transport Safety

by Anthony Andrews, Specialist in Energy Policy, February 18, 2014

Summary

The dramatic increase in U.S. crude oil production, coupled with the increase in crude oil transport by rail, has raised questions about whether properties (e.g., flammability) of these crude types—particularly Bakken crude oil from North Dakota—differ sufficiently from other crude oils to warrant any additional handling considerations. The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a Safety Alert to notify emergency responders, shippers, carriers, and the public that recent derailments and resulting fires indicate that the type of crude oil transported from the Bakken region of North Dakota may be more flammable than traditional heavy crude oil. The alert reminds emergency responders that light sweet crude oil, such as that coming from the Bakken region, pose significant fire risk if released from the package (tank car) in an accident. PHMSA has expanded the scope of lab testing to include other factors that affect proper characterization and classification of crude oil such as volatility, corrosivity, hydrogen sulfide content and composition/concentration of the entrained gases in the material.

All crude oils are flammable, to a varying degree. Further, crude oils exhibit other potentially hazardous characteristics as well. The growing perception is that light volatile crude oil, like Bakken crude, is a root cause for catastrophic incidents and thus may be too hazardous to ship by rail. However, equally hazardous and flammable liquids from other sources are routinely transported by rail, tanker truck, barge, and pipeline, though not without accident.

A key question for Congress is whether the characteristics of Bakken crude oil make it particularly hazardous to ship by rail, or are there other causes of transport incidents, such as poor maintenance practices, inadequate safety standards, or human error.  [MORE – a 13-page report in PDF format]

 

Open letter from Davis to Benicia: Stop crude by rail

Repost from The Benicia Herald
[Editor: A year ago, almost to the day, I wrote an Op-Ed for The Benicia Herald titled, “Valero crude-by-rail: ‘Down-wind’ and ‘up-rail’.”  A few months later, I was contacted by Milton Kalish and Lynne Nittler of Davis, and we’ve stayed in touch.  They – and their wonderful group of activist friends in Cool Davis, Yolano Climate Action and 350 Sacramento – have continued their CBR organizing efforts with great energy and creativity.  This open letter by Lynne serves as a detailed primer of all the reasons why CBR must be stopped.  A must-read.  – RS]

Open letter to Benicia: Stop crude by rail

July 10, 2014 by Lynne Nittler

IN RESPONSE TO JIM LESSENGER’S OPED OF JULY 4, “Open letter to the City Council: Support CBR,” I write today urging Benicia to deny the proposed Valero Refinery Crude-by-Rail Project until all safety measures listed below are in place.

I have been carefully following the proposed Benicia project, reading articles from a wide variety of sources including many reports and, most recently, the Draft Environmental Impact Report.

I follow a number of environmental topics closely, particularly those related to climate change. I am on the board of Cool Davis, a nonprofit organization that helps the city of Davis implement its Climate Action and Adaptation Plan.

I have an “uprail” perspective that is important to add to the conversation on the Valero proposal, as the impact of the daily trains would be significant in my community.

I have six reasons Benicia should deny the CBR project. They are as follows:

1. The project is far from contained within Benicia’s 3,000-acre Industrial Park.

Benicia is fortunate to have a buffer area of industries and vacant land around Valero Benicia Refinery. Valero has even promised that the oil trains will not cross city streets during Benicia’s rush hours (though neither Valero nor the city of Benicia can enforce that promise).

Davis and other uprail communities are not so fortunate. The trains will pass through downtown Davis, including residential neighborhoods, the center of downtown, university housing and the entire Mondavi Performing Arts Complex and Conference Center.

Train travel through Davis is made more dangerous because there is a curve with a 10-mph left-handed cross-over between the main tracks several hundred feet east of the Amtrak station, right downtown. All other crossovers on the line are rated for 45 mph. This 10-mph spot in particular is an accident waiting to happen.

While the trains would hopefully avoid rush hour in Benicia, that will surely not be the case for all uprail communities.

2. Valero owns the property but should not be allowed to set profits ahead of public health and safety.

No corporation operates in a vacuum. Valero’s decision to import North American crude has profound effects beyond its own improvement that cannot be ignored.

Valero’s change to crude by rail from crude by ship would allow it to import both Canadian tar sands and Bakken crude, and would add additional dangerous trains to the tracks all the way back to their points of origin, most likely in North Dakota or Alberta, Canada. That means the trains endanger and disrupt towns and cities across our country on their way to Benicia. These tracks are already impacted by oil trains taking precedence over trains transporting grain and other local crops and commuter trains. More importantly, people are endangered by the highly volatile Bakken crude — there have been 12 significant derailments since May 2013, with six explosions — and our precious marshes and waterways are threatened by the possibility of toxic spills of tar sands bitumen, which quickly sinks to the bottom and cannot be removed. The Kalamazoo River, Mich. cleanup of 1 million gallons of leaked tar sands dilbit is still unsuccessful after four years and $1 billion.

In California, the trains would come over the Sierra Nevada Mountains or wind through the Feather River Canyon (rated as a “rail high-hazard area” by the California Governor’s Office of Emergency Services), or possibly even come from Oregon down through Redding and Dunsmuir, site of a 1991 derailment of a fertilizer tank car that killed fish for 40 miles. In any of these routes, major rivers would be crossed where an accident could contaminate much-needed drinking and irrigation water.

3. The project will clearly affect the environment.

A wider view of “environment” raises serious concerns. California considers the cradle-to-grave lifecycle of products. Extracting, refining and burning heavy, sour crude is a nasty job, start to finish.  That’s why tar sands is called a “dirty” fossil fuel, noted for its energy-intensive carbon footprint. This deserves a full discussion which is beyond the scope of this letter. The recently completed Valero Improvement Project was intended to allow the refinery to handle refining the heavy, sour crude as efficiently as possible, which is laudable, but that is not to say it is a clean process. Setting aside the forests destroyed and the unlined toxic tailing ponds leaking into the waterways in Canada at the point of extraction, we must note that processing tar sands bitumen will produce more of the byproduct petcoke that is so polluting it cannot be burned in the U.S. (It can be sold abroad and burned for energy there. Ironically, when it is burned in China, some of the smog blows back across the ocean to Southern California.)

The heavy crude is high in sulfur and toxic metals, which corrode refinery pipes. The Richmond refinery fire in 2010 was traced partly to corrosion from refining tar sands. Emissions must be carefully monitored to ensure toxic fumes do not escape to neighborhoods or endanger workers.

The 2003 “improvement” project enabling Valero to refine heavy crude opened the door for California to refine more of the world’s dirtiest bitumen, running contrary to our state goals under AB 32 to conserve energy and reduce our greenhouse gas emissions by moving to renewable energy sources. In fact, according to California Energy Commission figures, California reduced its total consumption of oil from 700 million to 600 million barrels in the last year, primarily through conservation — i.e., adopting lower-emissions vehicles and Energy Star appliances, changing transportation habits to walk-bike-public transport, and making our buildings more energy efficient. We are moving away from our dependence on oil by reducing our consumption of it.

4. The project will be safer, but not safe.

The outgoing chair of the National Transportation Safety Board (NTSB) has some strong words for the rail industry and the way certain hazardous liquid is transported.

Deborah Hersman’s strong remarks are tied to older-model rail tank cars known as DOT-111s, which carry crude oil and ethanol through cities across the U.S. and Canada. Hersman told an audience that DOT-111 tank cars are not safe enough to carry hazardous liquids — in fact, she said her agency issued recommendations several years ago. “We said they either need to remove or retrofit these cars if they’re going to continue to carry hazardous liquids,” Hersman said on April 22, 2014.

Right now, four California legislators are urging the Department of Transportation to take action on critical safety measures. After a hearing of the joint houses of the Legislature on June 19 chaired by Sen. Fran Pavley, D-Agoura Hills, Congressmembers John Garamendi, D-Davis, Doris Matsui, D-Sacramento, Mike Thompson, D-Napa, and George Miller, D-Martinez, sent a letter to Anthony Foxx, secretary of the U.S. Department of Transportation, stating that “we cannot allow communities to be in danger when viable solutions are available.”

The summary of their requests, dated July 1, 2014, is as follows:

• Provide a report on the level of compliance by the railroad and petroleum industry to the May 7 Emergency Order.

• Issue rulemaking that requires stripping out the most volatile elements from Bakken crude before it is loaded onto rail cars.

• Expedite the issuance of a final rulemaking to require the full implementation of the Positive Train Control (PTC) technology for all railroads transporting lighter crude, and provide a status report on the progress of PTC implementation to date.

• Expedite the issuance of rulemaking that requires phasing out old rail cars for newer, retrofitted cars.

The Benicia decision comes at a critical moment. Benicia’s approval of the Valero proposal before DOT takes action would undercut what our legislators are trying to do to protect not just Benicia citizens, but all uprail citizens all across the U.S. Regulating that the volatility of crude be reduced will force the industry to build small processing towers — aptly called stabilizers — that remove natural gas liquids (a product that can be saved and sold) from the crude before it is loaded, as they do in other parts of the country (Eagle Ford shale reserves in Texas, for example).

Obviously, creating this necessary infrastructure will increase the cost of Bakken crude. The industry will no doubt balk at the additional expense, as will the refineries. On the other hand, it’s immoral to expose many millions to explosive trains of Bakken crude when there is a remedy! One Lac-Mégantic tragedy is enough.

The trains rumbling into Benicia are the first trains to pass daily through our region to the Bay Area, but others will follow. The approval of this project cannot be viewed in isolation. This fall the DEIR will be available for review for the Phillips 66 Santa Maria Refinery Rail Spur Project that would bring another daily train through my community in Davis, through yours in Benicia, across the aging Benicia rail bridge, along the beautiful Carquinez Strait, through the East Bay and on down the Capitol Corridor to San Luis Obispo County. Based on California Energy Commission data, the Sacramento Bee says we can expect five to six trains daily in the next few years as California receives 25 percent of its crude by rail.

We put ourselves at grave risk to proceed with any rail projects now until we firmly lock in place the safety measures requested by our U.S. congressmembers. In this country, protection for the public must come first.

5. The CBR proposal makes no economic sense for Benicia and for the nation.

We live in a WORLD economy. Rather than destined for domestic purposes, the refined oil from all five Bay Area refineries is sold on the world market for greatest profit. That’s why gasoline rates at the pumps have not decreased during this oil boom.

Considered from the perspective of the weather of our planet, which will become a pivotal concern in the coming years, it makes no sense, financial or otherwise, to extract another drop of fossil fuel from the Earth. We need to put all our attention on renewables and conservation, and cut back drastically on our oil consumption. Realistically, this means refineries will need to produce far fewer products, and the oil extraction frenzy will die down.

6. The Valero refinery cannot befriend Benicia and then turn around and foul the air, risking the health and safety of our children.

Valero may mean well when it makes charitable contributions, but its intentions mean little if it then creates unsafe conditions for those who are in receipt of its generosity. It is not surprising that salaried employees, wage earners and grant recipients would stand up in favor of most anything proposed by the “friendly giant.” But it is incumbent on us all to look at the big picture — and a big picture that contains oil trains is not a pretty one.

In summary, I recommend a “no” vote on the Valero Crude-by-Rail Project until all safety measures requested by our four local congressmembers in Washington are firmly in place, and enough new tank cars are designed and produced to safely convey the crude oil from its source to Benicia, ensuring that no communities or waterways are in danger.

This “no” vote would send a strong message to DOT that their work is urgent, and that the regulations they make will be closely monitored. A “yes” vote, however, would undercut the important work our legislators are doing on our behalf.

Lynne Nittler lives uprail from Benicia in Davis. She devotes much of her time to Cool Davis, a nonprofit that focuses on helping Davis reduce its greenhouse gas emissions, adapt to a changing climate and improve the quality of life for all. She has followed the oil train issue closely since last September.

Canada Announces Rules for Transporting Dangerous Goods by Rail

Repost from The Wall Street Journal

New Measures Mandate Tank Cars That Carry Crude Oil to Be Built with Thicker Steel Walls

By David George-Cosh, June 27, 2014

TORONTO—Canadian Transport Minister Lisa Raitt announced new rules Friday aimed at bolstering safety measures for transporting dangerous goods, such as crude oil, over the country’s railway networks.

The new measures include updating safety-reporting requirements for rail companies operating in Canada, mandating tank cars that carry volatile crude be built with thicker steel walls, and improving data-reporting requirements for railways.

Canadian and U.S. regulators have urged the rail industry to improve safety measures after several recent accidents involving trains carrying crude, including last year’s derailment of a crude-carrying train in rural Quebec in July, which killed 47 people.

“Our government is committed to railway safety and the safe movement of dangerous goods,” Ms. Raitt said in a statement. “The upcoming regulations will further strengthen safety in Canada’s already robust transportation system.”

A spokesman for Canadian Pacific Railway Ltd.  said the company was reviewing the announcement and that it has a “strong” set of existing safety measures it discloses to the federal government.

Jim Feeny, a spokesman from Canadian National Railway Co. said that its position on safety disclosure “largely aligns” with the federal government’s proposals, but it was also reviewing the announced measures.

The new rules announced Friday will include amendments to legislation to require DOT-111 tank cars to abide by new standards such as thicker steel walls and better top protection to reduce spills in a derailment.

The ministry will also require the country’s short-line railroads to upgrade their safety-management disclosure by providing Transport Canada with the same reports on safety risks that the country’s major rails provide. The proposal affects 35 railways in Canada, Transport Canada said.

Transport Canada is also requesting that Canada-based railroads provide measurable data such as maintenance and repair records to the federal government that could better address safety risks before they occur.

Friday’s measures follow a series of steps Ms. Raitt announced in April to improve rail transport in response to recommendations made by the Transportation Safety Board of Canada after its investigation of last year’s Lac-Mégantic tragedy.

The federal government also ordered older DOT-111 tank cars to be phased out or retrofitted in three years, and added a requirement that all crude oil shipments include emergency response plans.

It is unclear how many DOT-111 cars operate in Canada, but the Association of American Railroads and the American Short Line and Regional Railroad Association says that there are 228,000 general-purpose tank cars in service in the U.S. known as DOT-111s.

The U.S. has adopted tougher classification standards for shipping crude-by-rail that but hasn’t curbed the use of older DOT-111 tank cars on the country’s tracks despite last year’s deadly accident in Quebec and more recently, a fiery derailment in Lynchberg, Va.