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The Bakken Oil Trains are Coming . . . IS SKAGIT READY?

Skagit Valley Herald, Mount Vernon, Wash.

Bakken crude oil deliveries raise safety questions

By Daniel DeMay | Posted: Sunday, March 2, 2014 11:40 pm

An oil tanker train sits on the rail line that parallels Highway 20 west of Burlington in this photo taken in November 2013. Scott Terrell / Skagit Valley Herald

An oil tanker train sits on the rail line that parallels Highway 20 west of Burlington in this photo taken in November 2013. Scott Terrell / Skagit Valley Herald

OLYMPIA [Wash.] — The issue of shipping oil by rail has gone from the background to the front burner almost overnight.

There are no less than four related bills floating around the Legislature, as well as work on the federal and local level. The state House and the Senate are aimed at studying spill response, increasing disaster and spill preparedness and cashing in on the fastest growing transportation issue in the nation.

Meanwhile, the U.S. Department of Transportation and officials from the rail industry agreed in late February to a series of voluntary improvements in safety and inspection standards, to be implemented by July 1.

Any regulatory changes must be made at the federal level since states have no authority over the railroads. Until studies of oil volatility and rail car safety are complete, there are few options on the table beyond local planning for the worst.

U.S. Rep. Rick Larsen, D-Wash., met last week with several local leaders in Mount Vernon to discuss the agreement and get input from a community with a growing concern about the safety of rail infrastructure and disaster response.

Leaders from Mount Vernon, Burlington and Anacortes all expressed worries over what would happen if a large crude oil train derailed here, such as the disaster in Lac-Megantic, Quebec, last July. In that case, 63 oil tank cars derailed, causing an explosion with a 1-mile blast radius that consumed much of the downtown area and killed 47 people.

Anacortes Mayor Laurie Gere questioned the safety of railroad bridges bearing the weight of more and more tanker traffic.

“It’s the bridges,” Gere said during the Feb. 24 meeting with Larsen. “We need to be assured the infrastructure, long-term, can support this new source of (crude oil).”

This “new source” is oil coming from the Bakken oil fields in North Dakota, a lighter crude oil in growing demand as Alaska’s North Slope production slows.

Despite assurances that Congress and the rail industry are trying to deal with these issues now, Larsen said he expected the increase of oil-by-rail to last 20 to 30 years at least, and initial agreements are far from enough.

Larsen said the U.S. DOT Pipeline and Hazardous Materials Safety Administration is in charge of setting new safety regulations, and the process of determining exactly what those rules will look like is expected to take at least until early next year.

Congress is not drafting any legislation yet, but the possibility could arise, said Larsen’s spokesman, Bryan Thomas.

“Congress is still in its investigatory phase right now,” Thomas said, adding that the matter was discussed among major players Feb. 26 at a hearing in the U.S. House Transportation and Infrastructure Committee. “We’ve opened the possibility that Congress will take action before DOT regulations come out.”

Meantime, the American Association of Railroads (AAR) Tank Car Committee moved ahead with tougher tank car standards. AAR’s tank car committee in March 2011 petitioned DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) to adopt more stringent requirements for new tank cars that require a thicker, more puncture-resistant tank car shell; extra protective “head shields” at both ends of tank cars; and additional protection for the fittings on the top of a car that allow interior access.

In July 2011, the AAR committee adopted what it had proposed to PHMSA as the basis for new industry standards for tank cars used to carry crude oil. The new standards apply to new tank cars ordered after Oct. 1, 2011. To date, some 14,000 tanks cars have been built to this tougher standard.

Tesoro Chief Executive Officer Greg Goff told Reuters news service that 90 percent of his company’s oil tanker fleet meets the new AAR standards. By the middle of this year, the company will replace the remaining 10 percent with cars that meet the standards, he said.

“Tesoro is proactively making these commitments, before expected changes in future federal regulations, because we believe it’s the right thing to do for all of our stakeholders,” Tesoro media relations manager Tina Barbee said in an email.

Though members of Congress are happy to see the industry stepping up to take immediate action on the issue, Thomas said, the federal government should be ahead of this.

“If this really is a safety matter, the government should be leading and setting the high examples — not trying to catch up to what the industry is doing on its own,” Thomas said.

Shell Anacortes refinery general manager Thomas Rizzo said the company is waiting for tank car regulations to solidify before taking immediate action.

“We’re trying to get an understanding as to what are rail car requirements for shipping crude,” Rizzo said. “Then we will make decisions as to whether to retrofit our cars or buy new cars.”

He said Shell would follow whatever regulations are established.

Meanwhile, the trains keep coming.

Oil boom, rail boom

The dramatic spike in production at the Bakken oil fields has led to an increase of crude oil shipments by rail that hasn’t been seen in decades — if ever.

The jump in oil-by-rail shipments — more than 400 percent since 2008, according to the Association of American Railroads — has led to more spills and disasters across the country.

The spill numbers themselves are telling: Last year alone, crude oil spills from rail tank cars amounted to more than 1.2 million gallons in the U.S., according to an analysis of data from the U.S. Department of Transportation Pipeline and Hazardous Material Safety Administration. That’s about twice as much oil spilled from rail tank cars as was spilled in the previous 33 years combined.

The boom in production came after technological advances in hydraulic fracturing — or fracking — and horizontal drilling allowed oil companies to begin getting far more oil from wells than was previously thought possible.

Prior to 2008, the amount of oil traveling by rail in the U.S. was negligible compared to the amounts moving by pipeline or marine tanker, according to the Association of American Railroads.

The boom came so suddenly that regulation couldn’t keep up, Larsen said.

“The technological ability has gotten far ahead of our ability to regulate safety,” the congressman said after last week’s meeting.

Among the concerns about Bakken crude oil is that it may be more volatile than other crude, at least according to some sources.

After the Quebec derailment, the Canadian Transportation Safety Board sent investigators to the Bakken fields to test the oil. Their suspicion: The Bakken crude is not only lighter than other crude oil but more volatile and may contain gases that increase explosion risks in a derailment.

Those test results are not in, but the U.S. Transportation Safety Board issued recommendations last month that include ensuring shippers are classifying materials properly, based on volatility and other factors.

Larsen confirmed the volatility issue at the Mount Vernon meeting. The industry consensus, he said, is that Bakken crude oil is more volatile.

“The classification issue comes down to, do you treat it like regular crude oil, or do you treat it like something that’s more volatile than regular crude oil when you transport it?” Larsen said.

Thomas said separate oil industry and federal studies of the volatility of Bakken crude are still six months from completion, but if the oil is found to be more explosive and dangerous to transport, solutions could be costly — though it’s unclear who would bear the expense.

That could be the biggest point of contention, Thomas said.

Mount Vernon Fire Chief Roy Hari said he worries about what’s on any given tank car and wants the rail companies to help cities prepare for disasters.

“These cars didn’t change their markings; they just changed the product they’re carrying,” he said. “Don’t roll your product through town without giving us the tools to protect the people.”

For now, emergency officials can only plan for the worst.

Burlington Northern Sante Fe Railway will participate in a table-top spill response exercise April 9 in Mount Vernon, Mayor Jill Boudreau said.

Though the agreement between rail companies and the U.S. DOT addresses some issues — rail car safety improvements, classification of crude oil, emergency response training and increased inspections of tracks and equipment — state lawmakers are working on their own solutions.

State measures

House Bill 2347 and Senate Bill 6524 are both aimed at studying and implementing increased safety preparations for oil transport in the state, though the House proposal focuses more on marine tankers, a fact the sponsor of the Senate measure says is a mistake.

Marine oil transport safety precautions have undergone several overhauls and strengthenings, said Sen. Doug Ericksen, R-Ferndale, who sponsored SB 6524 and has been outspoken about the need to increase rail disaster preparedness in the wake of the Quebec incident that killed 47 people in the small lakeside town.

SB 6524 includes a grant program for training oil spill first-responders. Another bill, SB 6567, would impose a 5-cent-per-barrel tax (one already imposed on oil transported in the state by marine tanker) on oil shipped by rail through Washington to help pay for the grant program.

Yet another measure, a Senate resolution, would ask the federal government to increase safety standards for tank rail cars.

Of these four bills, the Senate resolution is closest to actual passage, as it already passed the Senate as well as the House Environment Committee and now awaits action in the Rules Committee. HB 2347 passed the House and has yet to be heard in the Senate. SB 6524 is still in the Senate, and the barrel tax measure hasn’t been set for a hearing yet.

Although rail companies pledged to add $5 million for training first responders, without additional funding, local governments may be forced to pay for additional equipment to prepare for a disaster that may never come.

“Who’s going to foot the bill for that?” asked Liz Lovelett, Anacortes City Council member, during last week’s meeting. “Are we really going to put the burden on local governments? How do we keep the oil and rail companies accountable for the level of safety hazard that they’re bringing to our door?”

— Reporter Mark Stayton contributed to this report.

— Reporter Daniel DeMay: ddemay@skagitpublishing.com, Twitter: @Daniel_SVH

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