That’s about to change, at least to some extent, with a new regulation that takes effect Friday.
An emergency order from the U.S. Transportation Department will require railroads to tell states how many trains carrying highly-volatile Bakken crude are expected to travel through each week, and on which routes.
The order was issued just a week after the latest oil train accident — a derailment in Lynchburg, Virginia — that sent eight-story fireballs into the sky.
A ‘Small Step’; ‘Hardly Where We Need To Be’
“I think it’s a very small step in the right direction,” said Eric de Place, policy director with Seattle’s Sightline Institute, an environmental think tank that has been reporting on what it calls an emerging “pipeline on rails.” He says the new federal rules don’t go far enough.
“Let’s keep in mind, this is not requiring them to use safer tank cars. This is not requiring them to slow down in our neighborhoods. This is not requiring them to inform emergency responders of the dangers,” de Place said. “All they’re having to do is tell us some very rough figures about how many potentially explosive trains are in our states. So, it’s better than nothing, but it’s hardly where we need to be.”
Sightline has been documenting the growth in oil train traffic. DePlace says nationally, it’s increased nearly 60-fold over the past five years.
She says fire departments need to know when mile-long oil trains are passing through. The new rule will help communities better prepare for disasters “in the same way that we have ongoing discussions with geologists and scientists about what’s our earthquake threat, what’s the recurrence rate and that type of thing,” she said.
“This just gives us more information about the kinds of hazardous materials that would be in our community at any given time,” Graf said.
Advocates for more regulation say they’ll keep pushing. They want more specifics on the shipments, as well as tougher standards for tank car safety. They also say it should apply to all shipments of oil by rail, not just the longest trains carrying Bakken crude.
Calgary-based company has waited more than 5 years for the Obama administration to make a decision
CBC News, May 22, 2014
TransCanada is in talks with customers about shipping Canadian crude to the United States by rail as an alternative to its Keystone XL pipeline project that has been mired in political delays, according to company president and CEO Russ Girling.
“We are absolutely considering a rail option,” Girling told Reuters on the sidelines of a conference in New York Wednesday. “Our customers have needed to wait for several years, so we’re in discussions now with them over the rail option.”
The comments are the first to confirm growing speculation that TransCanada might use more costly and controversial railway shipments as a stopgap alternative to the Keystone XL pipeline, whose approval has been delayed by the U.S. government.
Girling said the firm was exploring shipping crude by rail from Hardisty in Canada, the main storage and pipeline hub, to Steele City, Neb., where it would flow into an existing pipeline to the Gulf refining hub.
TransCanada has waited more than five years for the Obama administration to make a decision on the $5.4-billion project, which would carry up to 830,000 barrels per day of crude from the oilsands of northern Alberta to the U.S. Gulf Coast.
While the project has received a mostly favourable environmental report, the State Department last month delayed a decision beyond the mid-term elections in November while a legal dispute over the line’s route in Nebraska is settled.
The pipeline has drawn sharp criticism from environmental groups who say it will fuel more production of Canada’s energy-intensive oilsands.
But the oil-by-rail movement has also come under scrutiny after a series of explosive derailments, including the one in Lac-Megantic, Que., last summer that killed 47.
Opposition fuelling opportunity
“It’s an irony that the adamant opposition of environmental organizations and others against oilsands-derived crude have actually created a phenomenal opportunity for rail to pick up the slack,” said David McColl, an analyst at Morningstar, Inc.
The line has the backing of the Canadian government and conservative Prime Minister Stephen Harper called the project “a no-brainer.” Canada is counting on new export lines to boost discounted oil prices in the country and accommodate rising production from the oilsands.
Demand to ship crude by rail has gathered pace in Canada as producers scramble for alternatives to congested export pipelines.
Canadian crude-by-rail exports jumped to 146,047 bpd in the last quarter of 2013, an 83-per cent year-on-year surge, according to the National Energy Board.
With Keystone XL and a number of other new pipelines projects mired in regulatory delay and environmental opposition, the crude-by-rail boom shows little sign of slowing.
Jarrett Zielinski, chief executive officer of TORQ Transloading — which is building Canada’s largest unit train terminal in Kerrobert, Sask., said TransCanada would need to load at least roughly nine unit trains per day to rival the takeaway capacity of Keystone XL, if they were to load raw bitumen.
Zielinski said that much extra crude travelling on Canada’s rails, in addition to the new rail loading projects already underway, could strain the system.
“The rail network would need more infrastructure and people,” he said. “It’s my fear that the current rail infrastructure would be insufficient, although it could be scaled up quickly.”
The president of the Canadian Association of Petroleum Producers (CAPP) says using rail is a good stopgap measure until the Keystone XL pipeline is approved.
“We expect to see pipeline growth, but rail is important in the near term,” said Dave Collyer.
He says CAPP will release its production and transportation outlook for the year next month.
“What it will show is rail is an important interim transportation solution to accommodate the growth and production we foresee,” Collyer said.
He says pipelines are still the best in the long term, but until that happens he says rail is a choice that must be considered.
In a new battlefront over energy policy, American Indian rights attorneys argued Wednesday before a Minnesota judge that historic treaties give tribes a say in where to build crude oil pipelines across land ceded by the Chippewa in the 19th century.
“Everybody has kind of forgotten what our rights are, and that is why we are here,” Frank Bibeau, an attorney for the Indian nonprofit group Honor the Earth, told an administrative law judge at a hearing in St. Paul.
Honor the Earth says the proposed $2.6 billion Sandpiper crude oil pipeline across northern Minnesota will produce “inevitable oil spills and environmental degradation” on ceded lands. Spills could endanger Rice Lake near McGregor and Sandy Lake in Aitkin County where Indians gather wild rice, the group says.
For the first time in Minnesota, Indian rights attorneys are arguing that the state Public Utilities Commission (PUC) lacks unilateral authority to approve pipelines. They want the state to reject the proposed route of the Sandpiper pipeline from North Dakota, and have offered an alternative path.
Enbridge Energy’s preferred pipeline route goes southeast from Clearbrook, Minn., passing west of Park Rapids and then heading east to Superior, Wis. It avoids Indian reservations, but passes through ceded lands on which Chippewa bands retain the right to fish, hunt and gather rice.
Attorneys for the company contend that the commission has no business deciding the meaning of federal treaties. Even so, much of the two-hour discussion before Judge Eric Lipman focused on 10 treaties signed between 1825 and 1864 by Minnesota Indian tribes.
“It would represent a dramatic departure from the commission’s precedent and would significantly impact not just pipeline projects but all large energy projects sited in northern Minnesota,” said Christine Brusven, an attorney for the Calgary-based pipeline company that’s proposing to build the 610-mile pipeline to carry North Dakota oil.
Headed for the courts?
Lipman, who is overseeing the regulatory review of the pipeline, is expected to rule on the treaty rights question, but the final decision rests with the Public Utilities Commission. The issue ultimately could land in federal court.
Before the hearing, about 45 Honor the Earth supporters, led by the group’s leader Winona LaDuke, demonstrated outside the PUC’s office.
Some Minnesota tribes have successfully asserted off-reservation rights under 19th century treaties. The U.S. Supreme Court in 1999 affirmed that the Mille Lacs Band of Chippewa and seven other Chippewa bands retained hunting, fishing and gathering rights under an 1837 treaty on lands and lakes ceded by the tribes in central Minnesota, including Lake Mille Lacs.
Similar rights have been recognized under other treaties, and state and tribal governments share responsibility for game management in some ceded areas. This year, the Fond du Lac Band of Chippewa is exercising rights under an 1854 treaty to spear walleyes in several lakes in northeastern Minnesota’s Arrowhead region.
Honor the Earth attorneys contend that the 19th century treaties and early 20th century court rulings about wild rice reserves give the Ojibwe a present-day right to help make decisions affecting treaty-related resources.
“We are not saying we have an absolute veto,” Bibeau said in an interview.
Prof. Peter Erlinder of William Mitchell College of Law, who also represents Honor the Earth, said various treaties “need to be accommodated by state regulatory activities.” He said the state and tribes need to find a way to cooperate on pipeline siting.
But Enbridge attorney Randy Thompson, who represented Lake Mille Lacs landowners in the 1999 case, said Honor the Earth overstates the reach of the landmark decision.
“It is a nonexclusive right to hunt and fish,” Thompson said. “It gives bands the ability to self-regulate hunting and fishing by band members. It doesn’t give bands co-management authority. It doesn’t give the bands the ability to regulate nonmembers.”
Legal experts say protection of natural resources under 19th century Indian treaties is an emerging area of law.
“We have very little idea where it is going to go,” said James Coleman, an assistant professor of energy law at the University of Calgary and Haskayne School of Business.
In the state of Washington, a tribe with rights to fish for migrating salmon has successfully argued that the state Transportation Department must repair hundreds of culverts that block the passage of fish. Federal judges, most recently in 2013, have ruled that the barrier culverts violate treaty promises. Another federal judge in that state upheld in 1996 the U.S. Army Corps of Engineers’ right to deny a permit for a fish farm because it conflicted with the Lummi Nation’s treaty fishing rights.
Most treaty cases have been decided in federal court. Honor the Earth’s legal battle is unusual because it’s in a state regulatory proceeding. Bibeau said he reserves the right to take the case to tribal or federal court later.
In two previous Minnesota utility cases, tribes tried unsuccessfully to assert tribal authority over proposed pipelines or power lines. In 2011, the Leech Lake Band of Ojibwe objected to a proposed transmission line that skirted tribal lands, but lost in federal court. The Fond du Lac Band of Lake Superior Chippewa objected to another pipeline in 2007. That project, like the transmission line, eventually won approval of the PUC.
Coleman, who grew up in the Twin Cities, said Indian activists face a difficult legal battle in the pipeline case. Unlike the Washington cases, he said, where judges saw actual harm to treaty-protected resources, the Minnesota concerns are about a potential situation, and depending on how bad the disaster was, maybe at some point it could eliminate those treaty rights.
WASHINGTON (AP) — The Transportation Department issued an emergency order Wednesday requiring that railroads inform state emergency management officials about the movement of large shipments of crude oil through their states and urged shippers not to use older model tanks cars that are easily ruptured in accidents, even at slow speeds.
The emergency order requires that each railroad operating trains containing more than 1 million gallons of crude oil — the equivalent of about 35 tank cars — from the booming Bakken region of North Dakota, Montana and parts of Canada provide information on the trains’ expected movement, including frequency and county-by-county routes, to the states they traverse. The order also requires that railroads disclose the volume of oil being transported and how emergency responders can contact “at least one responsible party” at the railroad.
Much of the oil from the region is being shipped across the U.S. and Canada in trains of 100 cars or more that accident investigators have described as “moving pipelines.” The trains traverse small towns and big cities alike. Local and state officials, fire chiefs and other emergency responders have complained that they often have no information on the contents of the freight trains moving through communities and their schedules. Nor are they able to force railroads to provide that information, they say.
The department also issued a safety advisory urging shippers to use the most protective type of tank car in their fleets when shipping oil from the Bakken region. The order recommended that to the extent possible shippers not use older model tank cars known as DOT-111s. Accident investigators report the cars have ruptured or punctured, spilling their contents, even in accidents that occurred at speeds under 30 mph.
The tank cars are generally owned by or leased to oil companies that ship the crude, not the railroads.
The emergency order follows a warning two weeks ago from outgoing National Transportation Safety Board Chairwoman Deborah Hersman that the department risks a “higher body count” as the result of fiery oil train accidents if it waits for new safety regulations to become final.
Transportation Secretary Anthony Foxx announced the moves at a Senate committee hearing Wednesday, saying the department was moving as fast as possible on new safety regulations for crude oil shipments. He said the department sent a proposal last week to the White House that included new tank-car standards and regulations on train speeds, and the safety classification of oil based on its volatility. He said he anticipated final regulations before the end of the year.
Unlike the emergency order, the safety advisory on tank cars is voluntary, noted Sen. Maria Cantwell, D-Wash. Pointing out that oil trains move through “every major city it in the Northwest … hitting every urban center in our state,” she pressed Foxx to move even faster on tougher tank-car standards that would have the force of law.
There have been nine oil train derailments in the U.S. and Canada since March of last year, many of them resulting in intense fires and sometimes the evacuation of nearby residents, according to the NTSB. The latest was last week, when a CSX train carrying Bakken crude derailed in downtown Lynchburg, Va., sending three tank cars into the James River and shooting flames and black smoke into the air. No one was injured, but the wreck prompted an evacuation of nearby buildings.
Concern about the safe transport of crude oil was heightened after a runaway oil train derailed and then exploded last July in the small town of Lac-Megantic in Canada, just across the border from Maine. More than 60 tank cars spilled more than 1.3 million gallons of oil. Forty-seven people were killed and 30 buildings destroyed in resulting inferno.
U.S. crude oil production is forecast to reach 8.5 million barrels a day by the end of this year, up from 5 million barrels a day in 2008. The increase is overwhelmingly due to the Bakken fracking boom. Fracking involves the fracturing of rock with pressurized liquid to free oil and natural gas unreachable through conventional drilling.
Railroad and oil industry officials had no immediate comment on the government’s action.
Gov. Jay Inslee, who will have the ultimate say over the construction of what would be the Northwest’s largest oil-by-rail transfer terminal in Vancouver, hasn’t taken a stand on the project. But members of the state’s congressional delegation are weighing in.
U.S. Sen. Maria Cantwell, D-Wash., was in Vancouver on Tuesday and stopped to visit with The Columbian’s editorial board.
Cantwell was asked if she were a Vancouver resident, would she support building the oil-handling facility?
“It wouldn’t be something I would be promoting,” she said.
She said safety is one of her foremost concerns. In a letter to the Senate Appropriations Committee earlier this month, Cantwell, along with other senators, called for more federal dollars going toward addressing safety issues related to transporting crude oil by rail.
“We’re certainly willing to introduce legislation to put requirements on rail car safety because we don’t think it exists now and we’re not waiting for a voluntary system. We’re not waiting for these guys to get their act together,” Cantwell said. “We’re going to push this year.”
Earlier this week, BSNF Railway officials told Vancouver city councilors they would spend millions to prepare first responders in case of an oil spill. City officials have expressed concerns over ensuring the oil travels safely on the rail line, which runs through downtown and by the proposed waterfront development on the old Boise Cascade property.
Although city officials don’t have a say over the $110 million project proposed by Tesoro Corp. and Savage Companies, they could join other cities, such as Seattle and Bellingham, that have called for a moratorium on new oil-transport facilities until safety concerns, ranging from oil spills to explosions, are addressed.
“This industry has grown far greater than our capacity to deal with it and we need to slow down and get this right,” Cantwell said.
The proposed Tesoro-Savage oil terminal could handle as much as 380,000 barrels of crude per day. The facility would act as a transfer point for oil, arriving by rail to the Port of Vancouver and leaving by water.
Cantwell said she recently pressed the U.S. Coast Guard for details on any safety plans in place for an oil spill.
“So we did get the comment on the record at the hearing that, yeah, we don’t really have a plan … We were glad we were able to clarify that point because we want people to understand there is no solution there,” she said.
Cantwell said she wants to hear about “what people here say about the situation.”
“I get the sense that Vancouver is painting a different picture of where they want their economy to go long-term,” she said.
Sen. Patty Murray, D-Wash., the chair of the Senate Appropriations Subcommittee on Transportation, Housing and Urban Development, recently held a hearing to question officials from the Obama administration and city of Seattle about the safety of rail transport of crude oil.
U.S. Rep. Jaime Herrera Beutler, R-Camas, said Wednesday she’s still asking a lot of questions about safety and environmental impacts.
But in the last three years, she’s said, she has heard a lot of talk about wanting more trains, moving more commodities.
“If these folks can demonstrate they will be good community partners and meet environmental hurdles, then we should talk about it,” she said.
The governor is waiting to receive a recommendation from the state’s Energy Facility Site Evaluation Council before making a decision.
On February 27, Oglala Lakota and American Indian Movement activists joined in a four-directions walk to commemorate Liberation Day, an event to mark the 1890 massacre at Wounded Knee. As they do each year, four groups gather to the north, south, east and west and then walk eight miles until converging on top of Wounded Knee, where they honor the fallen warriors and the tribe’s rich history of resistance.
“It is an acknowledgement of the resiliency of who we are as a people,” explains Andrew Iron Shell, an organizer and activist of the Sicangu Lakota Nation. “It gives permission and courage for our up-and-coming generations to face the challenges of their time.”
The history of the occupation began with a massacre more than 100 years ago. On a cold day in December 1890, the United States army killed 300 Lakota men, women and children in a massive shoot out after a member of the First Nations refused to give up his arms. It marked the first bloodshed on Wounded Knee – although there had been many massacres of First Nations people by the colonialists before it. The event was also considered the end of the Indian Wars.
Eighty-threeyears later, on Feb. 27, 1973, about 200 Lakota members took siege of the town of Wounded Knee. Reclaiming a location that was written in the history books as a place of defeat, the Lakota stood their ground. They were there in protest of a failed attempt at impeaching the tribal president at the time, Richard Wilson, who was known to be corrupt and abusive. Initially a protest against the tribal government, the occupation took a turn when U.S. police forces arrived. The protestors switched the occupation’s focus to the United States’ frequent violation of treaties.
The armed warriors maintained control over the town for 71 days while the FBI encircled them. At the final standoff, two warriors were killed, about 12 people were wounded and over 400 were arrested. The Oglala were able to harness national attention through their occupation, using the spotlight to question the United States’ treatment of First Nations people.
As history passed, later generations rarely heard about the occupation of Wounded Knee — or about first nation people at all. This skewed national memory should be unsurprising: When you have a society and a nation built upon the subjugation of people of color, you can expect nothing more than the constant erasing of certain histories.
I recently visited Prisoner of War Camp 344, also known as the Pine Ridge Indian Reservation. It wasn’t my first time in the sovereign Oglala Sioux Nation, but it was my first time joining in the ceremonies celebrating the 41st annual Liberation Day to remember the 1890 reoccupation of Wounded Knee.
The vibrant American Indian Movement flags waving in the harsh South Dakota winter wind reminded me of the old black and white photos I used to see in my history books. The Lakota would not disappear without a fight, regardless of what the United States’ intentions were. Children walked alongside elders who had taken part in the occupation, showing clearly the group’s intergenerational wisdom. These are children who are stripped of learning their people’s history in schools, but instead learn it through stories and dances. They are children who live in a sovereign nation that contains two of the poorest counties in the United States and who recognize the threats their families face every day.
One of these threats come from the so-called town of White Clay, Neb., where visitors can witness the way violence against the First Nations people has changed — but not disappeared — over the generations. Consisting of only 12 people and four liquor stores, White Clay was once part of a 50-square-mile buffer that prevented alcohol from entering the reservation. In 1904, President Roosevelt signed an executive order that removed 49 of those square miles. Since then, the town’s economy has been driven by the $4 million in alcohol sales to the people of the Pine Ridge Indian Reservation. There is no legal place to drink in or around White Clay: Alcohol containers can’t be opened on the property of the distributor, it’s prohibited to drink in the street, and the reservation is dry territory. Yet, somehow, the town of 12 people manages to keep four liquor stores open. Barely two miles from the reservation’s epicenter, and less than 200 feet from the dry reservation line, the town perpetrates a type of violence that is, on the reservation, known as liquid genocide.
The reason for this name becomes apparent when one examines the teenage suicide rate on the reservation, which is 150 percent higher than the U.S. national average for this age group. Many attribute this death rate to the sale of alcohol to minors, which White Clay store owners are known to do. The liquor stores also break the law by selling to intoxicated people, and by trading alcohol for pornography, sexual favors — including from minors — and welfare checks. The effects of free-flowing alcohol are devastating: On the reservation, 90 percent of all court cases are related to alcohol use.
Kate, a Tokala warrior, believes that alcoholism is part of a larger problem of the disappearance of indigenous culture. For her, the only way to live in the geographical region of Pine Ridge is the indigenous way. “We are the ones on the back roads, still chopping wood. We are living the way we used to live,” she said. “It’s not hardship; it’s the way it’s supposed to be.”
Kate and many others know that alcohol was introduced to her people as a means to steal from them. Living deeply connected to the history of their nation, they believe that if they shake free of the colonized mindset, alcohol wouldn’t even be an issue.
Threats to the land
In addition to trying to close down White Clay, the Oglala Lakota Nation is actively fighting the construction of the Keystone XL pipeline. This 1,700-mile pipeline, which would carry 830,000 barrels of crude oil each day from western Canada through South Dakota en route to Texas. At two points it would even intersect with a pipeline that serves as a main water source for the Sioux Nation, affecting all of the Pine Ridge reservation as well as the nearby Rosebud reservation.
Advocates for the pipeline argue the pipeline is the safest way to transport crude oil. TransCanada, the company in charge of the pipeline, predicted that the first Keystone pipeline, which runs from Alberta to Illinois, would spill once every seven years. During its first year in operation, it spilled 12 times. The Lakota, along with other First Nations, have vowed to use direct action to stop construction of the pipeline.
For a nation whose land and sovereignty has been threatened for hundreds of years by U.S. politics, the Keystone XL pipeline is part of a long history of threats to the Lakota Nation – and to the earth itself.
“They want to get rid of the Lakota, the protectors of the earth,” said Olowan Martinez, an organizer in the Lakota community. “But what they don’t know is when they get rid of the Lakota, the earth isn’t too far behind. Our people believe the Lakota is the earth.”
President Obama is scheduled to be make a final decision on the pipeline by the middle of 2014. While the Lakota are hoping he will not approve the project, they are also getting ready to stand up and fight. During the Liberation Day celebrations, the Lakota’s dances and stories relayed messages about sacred water and Mother Earth. The tribe has also united with other First Nations to organize a three-day direct action training called Moccasins on the Ground, which was designed to prepare people to act if the pipeline is approved.
“Dead or in prison before we allow the Keystone XL pipeline to pass,” the Lakota warriors, many mounted atop horses, repeated during the Liberation Day celebration. Their words carried the weight of 521 years, and counting, of lived resistance.
The U.S. Department of Transportation has issued an emergency order requiring crude oil from North Dakota and Montana to be tested before being transported by railroads.
Tuesday’s order follows several fiery derailments involving shipments of crude oil. It is intended to ensure greater safety when the highly flammable liquid is being shipped.
Federal regulators also said Tuesday they are prohibiting shipping oil using the least-protective packing requirements.
The order is a response to derailments of trains carrying oil from the Bakken region in North Dakota that resulted in explosions and fire, including a train that exploded in Lac-Megantic, Quebec, near the U.S. border, in July, killing 47 people.
Jerry Vest, Vice President for Government & Industry Affairs at Genesee & Wyoming railroad, called the order a fundamental step to ensure safety. Genesee & Wyoming owns the Portland & Western rail line carrying Bakken crude to a terminal at Port Westward near Clatskanie, Ore. Last year, 110 unit trains carried Bakken crude to Port Westward, each one carrying about 70,000 barrels.
Vest clarified that the commodity would be tested not by the railroads but by companies using the railroads to ship the oil.
Sen. Ron Wyden, D-Ore., said the new rules will help, but won’t eliminate the risks posed by oil-by-rail shipments.
There is far more work to be done on securing the safety of oil trains, but this is one step of many that can be part of a solution,” Wyden said in a written statement.
Shippers already had to classify oil shipments based on their risk for explosion or fire, but federal investigators found that many shipments were being misclassified as less dangerous. The order requires testing for classification before shipment.
Jay Tappan, Chief of Columbia River Fire and Rescue, said his department has been waiting for stricter federal rules to help his responders know how to handle an oil train fire.
“I think we’re all finally starting to understand that the Bakken crude is a little bit more volatile, little more flammable than we had thought before so it’s good that they’re getting a handle on the exact classification of that commodity,” Tappan said.
Tappan’s is one of many fire departments in the Pacific Northwest preparing for the risk of an oil train derailment. A port in Oregon and five refineries in Washington currently accept rail shipments of crude oil. Several other shipping terminals have been proposed in the region.
Powerful members of the Washington state Senate are on board with a plan to tax crude oil shipped into the state by rail.
The money raised would pay for oil spill response and clean up.
The proposed legislation would expand an existing barrel tax paid only by seaborne oil tankers.
Republican Sen. Doug Ericksen says extending the tax is fair.
“Every tanker coming into our refinery today pays a 5-cents-per-barrel tax that goes into oil spill prevention and response,” Ericksen says. “We believe we should apply that to rail cars coming in and we have a bi partisan bill that would apply the barrel tax to the rail cars also.”
Oil train traffic across the Northwest has rapidly increased since 2012. Trains are carrying crude oil from wells on the northern plains to refineries in Northwest Washington and a marine terminal in Clatskanie, Ore.
At least half a dozen more crude oil receiving terminals are on the drawing boards in Western Oregon and Washington.
PORTLAND — A national fuel storage company has plans to turn an asphalt plant near the Willamette River into a rail and marine terminal for crude oil.
The former Paramount Petroleum plant in Northwest Portland has become part of Arc Logistics Partners LP, which operates four crude oil plants in Alabama and methanol, ethanol and other fuel plants throughout the East Coast and Midwestern United States. Arc Logistics entered into a lease in January with CorEnergy, an infrastructure investment company that purchased the plant for $40 million, according to the company’s financial reports.
The project is the latest of several potential crude oil terminals in the Pacific Northwest, a region receiving unprecedented amounts of oil by rail shipments because of a surge North American oil production. Currently, Port Westward on the Columbia River near Clatskanie is the only crude oil terminal in Oregon. In Washington, terminals have been proposed in Grays Harbor, Vancouver and Tacoma, and expansions to accommodate more Bakken crude shipments have been proposed at refineries in Anacortes and near Bellingham.
Arc Logistics, funded by the investment group Lightfoot Capital, became a public company in November. It describes itself as “principally engaged in the terminalling, storage, throughput and transloading of crude oil and petroleum products,” listing production of both U.S. and Canadian crude as factors affecting its business.
The Portland site spans 39 acres and has 84 tanks for a total capacity of 46 million gallons — nearly six times that of Port Westward. At one time, the plant also had a refining operation of nearly 380,000 gallons. That portion of the plant ceased operation in 2006.
Arc Logistics did not return calls for comment. In a release on the company’s website, CEO Vince Cubbage called the portland terminal an important addition to the company’s asset base, supported by a long-term contract with a major oil company: “We expect the Portland Terminal to provide the opportunity for significant incremental growth as additional customers or terminal capabilities are developed,” he said.
“It’s a big threat to our communities and to water quality,” Brett VandenHeuvel, executive director of the Columbia Riverkeeper, said. “We’ve seen that these trains carrying Bakken crude have regularly been exploding. A federal safety board said that this Bakken crude should route around urban areas and the thought of putting one in the heart of Portland is a big problem.”
Another environmental consideration raised in the company’s financial report is the Portland Harbor, designated as an Environmental Protection Agency superfund site in 2002 to cleanup uncontrolled hazardous waste. The boundaries of the superfund site are not yet finalized, but if they were to include the facility, its new owner would become a responsible party.
Matt McClincy, the state’s project manager for the Portland Harbor cleanup, said the EPA occasionally includes upland facilities that do not sit directly on the river, but that state evaluations haven’t indicated it will be included.
“The hope would be that short of unforeseen accidents they wouldn’t be a concern for the river,” McClincy said.
Arc Terminals, the operating subsidiary of Arc Logistics, runs 17 facilities throughout the country. Federal data show one third of those facilities have been found out of compliance with EPA regulations in the past three years, ranging from minor violations to a $101,500 fine in Alabama in 2012. Arc Terminals facilities have been involved in only a handful of small spills, none larger than 200 gallons, according to National Response Center reports.
Scott Smith, spill contingency planner for the Oregon Department of Environmental Quality, said the agency typically doesn’t judge a facility based on its company’s performance in other states. The individual plant’s past performance, even under a different owner, is much more telling.
The facility opened in 1947, and since then “numerous releases have occurred, resulting in localized impacts to soil and groundwater at the site by petroleum hydrocarbons, volatile organic compounds (“ VOCs ”), polycyclic aromatic hydrocarbons (“ PAHs ”), and metals,” according to the Arc Logistics report. One of the plant’s largest spills was in 2011, when corrosion caused a spill of nearly 16,000 gallons of Naphtha, a liquid hydrocarbon that petroleum plants use as a solvent and diluent. Paramount Petroleum, which has owned the facility since 2005, had it in limited operation at the time of the purchase, according to DEQ.
“‘It looks like a fixer-upper to me,” Smith said of the plant. “A lot of those terminals are very old, and this is one of them. I’ll be looking forward to any infrastructure investment that Arc makes in it.”
The lease agreement between Arc Logistics and CorEnergy includes $10 million worth of additional investments to clean, inspect and upgrade the facility’s storage and to enhance the terminal’s infrastructure.
WASHINGTON — More crude oil was spilled in U.S. rail incidents last year than was spilled in the nearly four decades since the federal government began collecting data on such spills, an analysis of the data shows.
Including major derailments in Alabama and North Dakota, more than 1.15 million gallons of crude oil was spilled from rail cars in 2013, according to data from the Pipeline and Hazardous Materials Safety Administration.
By comparison, from 1975 to 2012, U.S. railroads spilled a combined 800,000 gallons of crude oil. The spike underscores new concerns about the safety of such shipments as rail has become the preferred mode for oil producers amid a North American energy boom.
The federal data does not include incidents in Canada where oil spilled from trains. Canadian authorities estimate that more than 1.5 million gallons of crude oil spilled in Lac-Megantic, Quebec, on July 6, when a runaway train derailed and exploded, killing 47 people. The cargo originated in North Dakota.
Nearly 750,000 gallons of crude oil spilled from a train on Nov. 8 near Aliceville, Ala. The train also originated in North Dakota and caught fire after it derailed in a swampy area. No one was injured or killed.
The Pipeline and Hazardous Materials Safety Administration doesn’t yet have spill data from a Dec. 30 derailment near Casselton, N.D. But the National Transportation Safety Board, which is the lead investigator in that incident, estimates that more than 400,000 gallons of crude oil were spilled there. Though no one was injured or killed, the intense fire forced most of Casselton’s 2,400 residents to evacuate in subzero temperatures.
The Association of American Railroads, an industry group, estimates that railroads shipped 400,000 carloads of crude oil last year. That’s more than 11.5 billion gallons, with one tank car holding roughly 28,800 gallons.
Last year’s total spills of 1.15 million gallons means that 99.99 percent of shipments arrived without incident, close to the safety record the industry and its regulators claim about hazardous materials shipments by rail.
But until just a few years ago, railroads weren’t carrying crude oil in 80- to 100-car trains. In eight of the years between 1975 and 2009, railroads reported no spills of crude oil. In five of those years, they reported spills of one gallon or less.
In 2010, railroads reported spilling about 5,000 gallons of crude oil, according to federal data. They spilled fewer than 4,000 gallons each year in 2011 and 2012. But excluding the Alabama and North Dakota derailments, more than 11,000 gallons of crude oil spilled from trains last year.
Last week, the principal Washington regulators of crude oil shipments by rail met with railroad and oil industry representatives to discuss making changes to how crude is shipped by rail, from tank car design to operating speed to appropriate routing. Transportation Secretary Anthony Foxx called the meeting productive and said the group would take a comprehensive approach to improving the safety of crude-oil trains.
Foxx said the changes would be announced within the next 30 days.